The Investment Funds team at Gowling WLG has advised Foresight Sustainable Forestry Company Plc (FSF), a London-listed investment trust that invests in UK forestry and afforestation assets, in becoming the first issuer to receive the London Stock Exchange's new Voluntary Carbon Market (VCM) designation.
The London Stock Exchange is the first exchange in the world to apply a public equity market framework to facilitate financing in climate change mitigation projects that generate carbon credits. It also provides access for investors and corporates seeking exposure to carbon credits which may be issued in the form of a dividend in specie.
FSF provides direct and liquid access to the attractive investment characteristics of UK forestry and afforestation projects, with future exposure to voluntary carbon markets. FSF is investing in its first wave of planting new woodlands that will result in the removal of more than one million tonnes of carbon from the atmosphere. By 2050, the Company and Foresight Group LLP (as the Company's investment manager) estimate that the current capital base will have been recycled five times with the anticipation that this will yield, in aggregate, five million voluntary carbon credits.
The VCM designation requires issuers to produce additional disclosures relating to the projects they are directly or indirectly financing, including but not limited to; the qualifying bodies whose standards will be applied to the projects, project types, expected carbon credit yield and the extent to which they are expecting to meet the United Nations Sustainable Development Goals ("UN SDGs").
John Reed, partner in the Investment Funds team at Gowling WLG who advised FSF in the designation process, commented: "I am delighted to have supported Foresight Sustainable Forestry Company Plc on the first Voluntary Carbon Market designation. The VCM designation will help to drive the sustainability agenda in the UK and give investors greater access to climate mitigation projects. Congratulations to Foresight Sustainable Forestry Company Plc on this milestone."
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