Manulife Investment Management showcases positive impact of timber and agriculture in new sustainability report
Hancock Natural Resource Group, a company of Manulife Investment Management, has released its 2020 Report on Sustainability and Responsible Investing in Timber and Agriculture.
The report details performance measurement and monitoring across five key environmental, social, and governance (ESG) areas that are material to the business: climate stability, ecosystem resiliency, watershed protection, people empowerment and community prosperity. Despite the challenges faced during the Covid-19 pandemic, 2020 served to further demonstrate the resilience of the team and the opportunity and privilege it is to work in these highly integrated ecosystems to manage clients’ investments sustainably.
“Timber and agriculture demonstrate that economic, environmental, and social well-being all depend on the same natural systems: the interdependence of plants, pollinators, precipitation, predators, and even people,” says Brian Kernohan, chief sustainability officer, private markets, Manulife Investment Management. “We are happy to share the most recent results from our Sustainability and Responsible Investing program and our foundational approach that ‘good stewardship is good business’ for our colleagues, clients and communities.”
The report highlights key sustainability performance metrics. Both timber and agriculture teams made significant progress on the respective metrics last year. Manulife Investment Management is actively working to develop and continuously improve these measurements in tandem with other like-minded companies and nonprofit organizations. In 2022, Manulife Investment Management intends to offer fund-level sustainability reporting to provide investors additional insight into the assets owned.
2020 was pivotal for the agriculture investment platform as the diversified 70,000-acre directly operated US agriculture portfolio became the first farmland to be third-party certified under the new standard established by Leading Harvest, an outcome-based sustainability standard designed to optimise sustainable farmland management as part of a comprehensive assurance program for all types of farms. Manulife Investment Management worked collaboratively with sector peers and nonprofit organisations to develop the standard while completing its inaugural examination in 2019. As of 17 May, 2021, 100 per cent of its US agriculture platform, more than 300,000 acres, has been third-party certified to the Leading Harvest Farmland Management Standard.
The investment team also adopted a deliberate and systematic focus on regenerative agricultural practices that can improve soil health and biodiversity, as well as increase carbon sequestration, in recognition of agriculture’s role as a natural climate solution.
“We made tremendous progress against our sustainability initiatives in 2020 and have demonstrated our on-going commitment to sustainable agriculture in 2021 by certifying 100 per cent of our US agriculture platform to the Leading Harvest Standard. I could not be prouder of the team,” said Oliver Williams, global head of agricultural investments, Manulife Investment Management. “We believe that our economies of scale and the deployment of advanced agricultural technologies – such as remote sensing and precision irrigation/fertilisation – will prove to be increasingly important as we continue to expand our sustainability practices.”
Timberland’s significance grew as pandemic stress increased demand for forest products, from pulp and paper used in hygiene and personal protective equipment, to saw timber used for housing and renovations. Foresters and contractors worked diligently to meet increased demand. In parallel with the supply-demand dynamics introduced in the pandemic, corporate and investor net-zero commitments grew exponentially last year, as did awareness of the critical role forests play in removing carbon dioxide from the atmosphere.
Manulife Investment Management’s timberland portfolio already removes more CO2 than its operations produce and is managing the assets for positive climate impact. Over the past five years, the timberland portfolio has removed 1.9 million tons of CO2 from the atmosphere annually. In addition, 100 per cent of the global portfolio is certified as sustainably managed in accordance with credible third-party certification programs, including the Sustainable Forestry Initiative® and other PEFC-endorsed standards and the Forest Stewardship Council®.
“Through the dedication of the team, we finished the year in a very positive position, with increased opportunities for our forests to both deliver value to clients and have climate-positive and nature-positive impact,” says Tom Sarno, global head of timberland investments, Manulife Investment Management. “We are also scaling up to be able to offer our investors opportunities for even greater impact in the future.”
“We believe taking care of the forests, farms, ecosystems, and communities entrusted to us is essential for achieving competitive long-term returns,” Kernohan says. “And as the demand for ‘pure-play’ impact-first investing grows, we feel we are well-positioned to help investors address their carbon footprint, climate or net-zero pledges, and other positive environmental and social objectives.”