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Manulife Launches $500 Million Forest Fund Focused on Carbon Credits

Manulife Financial's global wealth and asset management subsidiary Manulife Investment Management announced today the introduction of the Manulife Forest Climate Fund, which aims to give investors the chance to engage in environment and climate change mitigation while earning returns via carbon credits.

The fund will invest in a globally diverse portfolio of sustainably managed forestland assets, with a focus on carbon sequestration over timber extraction, according to Manulife.

According to the company, the fund is being launched as investors seek to combat biodiversity and nature loss through the long-term protection and restoration of sensitive habitats, with sustainable investing practices and nature-positive outcomes aimed at exceeding net neutral strategies to meet client needs.

The new fund would prioritize the acquisition of forests with high carbon potential and high conservation value, as well as the implementation of sustainable forest management plans, in order to provide investors with long-term supplies of high-quality carbon credits by sequestering carbon. Utilizing carbon credits, conservation easements, value-added initiatives, and restricted wood harvests, the fund intends to produce returns for investors.

Tom Sarno, Manulife Investment Management's global head of timberland investments, stated:

We anticipate that high-integrity, verifiable carbon credits will continue to be regarded as superior decarbonization tools and that carbon markets will eventually resemble those of more conventional commodities.

At first, qualified U.S. investors will be able to invest in the Manulife Forest Climate Fund. The company has said that professional investors in other places, such as the European Union, may be able to invest in the strategy in the future. Manulife said that the fund will follow Article 9 of the SFDR in this way.

Eric Cooperstrom, who is the Managing Director of Impact Investing and Natural Capital Solutions at Manulife Investment Management, said:

"We are thrilled to offer investors a product that we have developed by leveraging our decades of experience in sustainable timberland management and our knowledge of the carbon market."

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