TIDMFSF
RNS Number : 5112I
Foresight Sustain. Forestry Co PLC
05 December 2022
5 December 2022
Foresight Sustainable Forestry Company Plc
("the Company")
FSF becomes the first company to receive LSE Voluntary Carbon
Market designation
Foresight Sustainable Forestry Company Plc, an investment
company that invests in UK forestry and afforestation assets, is
pleased to announce that the Company has today become the first
company to officially receive the London Stock Exchange's Voluntary
Carbon Market ("VCM") designation.
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The VCM was launched by the London Stock Exchange on 10 October
2022 and has been created to facilitate financing at scale into
projects that mitigate climate change. The VCM designation will be
applied to funds or operating companies that are admitted to the
London Stock Exchange's Main Market or AIM and which are intent on
investing into climate change mitigation projects that are expected
to yield voluntary carbon credits. The VCM aims to leverage the
power of capital markets to channel capital from corporates and
institutions with net zero pledges, into listed companies that are
creating high integrity voluntary carbon credits. A video
explaining the VCM can be found here:
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Richard Davidson, Chairman of Foresight Sustainable Forestry
Company, commented:
"To be the first ever company to receive LSE Voluntary Carbon
Market designation is a hugely proud and significant moment for
Foresight Sustainable Forestry. By connecting investors with net
zero ambitions to entities such as FSF that generate voluntary
carbon credits, the launch of the VCM is a major milestone in the
UK's fight against climate change. VCM designation means that the
ever-growing number of climate-minded investors can easily and
confidently identify sustainable solutions - investors know that,
through FSF, they are investing in climate mitigation projects that
make a real difference. We have a strong UK afforestation pipeline
and the potential of our current capital base alone is expected to
create up to 5 million carbon credits by 2050, equivalent to
offsetting the entire annual carbon footprint of Glasgow."
Julia Hoggett, CEO, the London Stock Exchange plc, said:
"We congratulate Foresight Sustainable Forestry on becoming the
first London-listed issuer to obtain our new Voluntary Carbon
Market designation. The public markets are uniquely positioned to
help scale the voluntary carbon market, whilst driving greater
transparency and providing access to a wider range of investors. We
continue to see a strong pipeline and hope to see more new issuers
receiving the VCM designation and raising new capital for
investment in climate mitigation projects in 2023."
Eligible issuers, such as the Company, will be seeking to
finance projects directly or indirectly and may issue carbon
credits as a distribution "in kind", retire or sell the carbon
credits. This will provide a new solution for corporate investors
seeking access to a long-term supply of carbon credits to augment
their decarbonisation strategies.
The overall objective of the Company in obtaining VCM
designation is to attract new investment from a large and growing
pool of companies which have made net zero pledges. For these
companies, the Company's "in-kind" carbon credit distribution
investment proposition will enable them to:
-- secure a supply of voluntary carbon credits for their
net zero commitments (to be used for their unabatable
emissions) and/or trading purposes;
-- hedge against rapidly rising voluntary carbon credit
prices; and
-- generate an attractive risk adjusted return from
otherwise uninvested balance sheet cash, with
flexibility to adjust carbon credit yield
requirements in a daily traded manner.
The Company's current portfolio consists of approximately 9,700
hectares of UK standing forestry and afforestation assets. The
carbon sequestered by the Company's 27 afforestation sites is
expected to equate to approximately 800,000 voluntary carbon
credits accredited by the Woodland Carbon Code. Once FSF's current
total available capital is deployed, it is anticipated that the
Company will create approximately 1,000,000 voluntary carbon
credits in its first wave of afforestation deployment. The
Company's strategy with afforestation assets is to successfully
develop afforestation assets, exit these young established forests
and recycle the capital into new waves of afforestation
development. 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, 5,000,000 voluntary carbon credits,
and they acknowledge that this is a long-term ambition and is
subject to ongoing market conditions and factors outside of the
Company's control.
Carbon credits created in relation to the Company's
afforestation projects will mature over time, turning from Pending
Issuance Units ("PIUs") into verified Woodland Carbon Units
("WCUs") that can be retired for offsetting purposes. The majority
of the 1,000,000 PIUs that are expected to be created from the
Company's first wave of afforestation deployment, are expected to
mature into WCUs between 2030 and 2050, enabling shareholders to
pursue their net zero ambitions. It is not currently the intention
to commence the sale or distribution of any voluntary carbon
credits in advance of 2030. It is expected that all voluntary
carbon credits created from FSF's first wave of afforestation
deployment will be sold or distributed "in kind" by 2050.
Save where the sale of carbon credits is required to meet the
working capital needs of the group, the Company intends to realise
the value of carbon credits for the direct benefit of shareholders.
Generally, the Company intends, when appropriate, to sell carbon
credits and make aperiodic distributions to shareholders of the net
proceeds of such sales. As an alternative to receiving a cash
distribution, the Company intends, where practicable, to offer
shareholders the option to elect to receive distributions "in kind"
of carbon credits. The method and process for the distribution of
any carbon credits "in kind" will be determined by the Board from
time to time.
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"). The Designation Circular produced by the
Company, which sets out these additional mandatory disclosures in
compliance with the VCM requirements is available for inspection on
the Company's website at fsfc.foresightgroup.eu .
To ensure that funds or operating companies are having a net
positive impact on the environment, the VCM eligibility
requirements require that all other activity and investments must
be mapped to FTSE Russell's Green Revenues Classification System
(Tier 1 and Tier 2 sectors), which recognises the sectors
contributing to the green economy.
The London Stock Exchange has granted the VCM designation to the
Company on the basis that it will make changes to its existing
investment policy to ensure the Company complies with the
eligibility requirements of the VCM, specifically; to confirm (i)
that the group will operate with a view to generating carbon
credits where commercially available; (ii) what will be done with
carbon credits generated by the Company's assets in particular
clarifying that there will be an ability to receive distributions
"in kind" of carbon credits; and, (iii) that the Company will
invest its cash and cash equivalents in a manner that is compatible
with the principle of climate change mitigation.
The Company announces that it will today publish and post (or
otherwise make available) to shareholders a Notice of General
Meeting with related explanatory circular (together the "GM Notice
and Circular") and form of proxy. The GM Notice and Circular
contains resolutions to: (i) amend the Company's existing
investment policy to implement the changes required for the
purposes of the VCM designation (as summarised above), and (ii)
make certain technical amendments to the Company's existing
articles of association to facilitate the process for the future
distribution of carbon credits "in kind" to electing
shareholders.
Copies of the proposed new articles of association and the
proposed amended investment policy (the "Amended Investment
Policy") are available on the Company's website,
www.fsfc.foresightgroup.eu, and will be made available for
inspection at the Company's registered office, The Shard, 32 London
Bridge Street, London SE1 9SG during normal business hours until
the conclusion of the General Meeting.
The General Meeting will be held at the offices of Foresight
Group, The Shard, 32 London Bridge Street, London, SE1 9SG at 12.30
p.m. on 21 December 2022. Please refer to the GM Notice and
Circular for details on how to vote by proxy.
The Directors consider the resolutions to be proposed at the
General Meeting to be in the best interests of the Company and the
shareholders as a whole. Consequently, the Directors unanimously
recommend that shareholders vote in favour of the resolutions, as
they intend to do in respect of their own beneficial interests
amounting, in aggregate, to 168,000 Ordinary Shares representing
0.10 per cent. of the Ordinary Shares.
In accordance with Listing Rule 9.6.1, a copy of the GM Notice
and Circular has been submitted to the National Storage Mechanism
and will shortly be available to view at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the
Company's website at fsfc.foresightgroup.eu .
In the event that the Amended Investment Policy is not approved
by shareholders, the Company's continued eligibility for the VCM
designation will be subject to review by the London Stock Exchange
and, in such circumstance, there can be no assurance that such
designation will not be revoked.
About the Company
Foresight Sustainable Forestry Company Plc ("the Company") is an
externally managed investment company investing in a diversified
portfolio of UK forestry and afforestation assets. Targeting a net
total return of more than CPI +5%, the Company provides investors
with the opportunity for real returns and capital appreciation
driven by the prevailing global imbalance between supply and demand
for timber; the inflation-protection qualities of UK land
freeholds; and biological tree growth of 3% to 4% not correlated to
financial markets. It also offers outstanding sustainability and
ESG attributes and access to carbon units related to carbon
sequestration from new afforestation planting. The Company targets
value creation as the afforestation projects successfully achieve
development milestones in the process of converting open ground
into established commercial forest and woodland areas. The Company
is seeking to make a direct contribution in the fight against
climate change through forestry and afforestation carbon
sequestration initiatives and to preserve and proactively enhance
natural capital and biodiversity across its portfolio. It is
managed by Foresight Group LLP, the leading listed infrastructure
and private equity investment manager listed on the Main Market of
the London Stock Exchange (www.fsg-investors.com)
For further information, please contact:
Foresight Sustainable Forestry Company Plc
Robert Guest
Richard Kelly
Email: fsfc@foresightgroup.eu +44 20 3667 8100
Website: https://fsfc.foresightgroup.eu/
Jefferies International Limited
Neil Winward
Will Soutar +44 20 7029 8000
Citigate Dewe Rogerson
Toby Moore ( toby.moore@citigatedewerogerson.com
)
Michael Mpofu (michael.mpofu@citigatedewerogerson.com) +44 7768 981763
Important Information
This announcement does not constitute or form part of, and
should not be construed as, any offer or invitation or inducement
for sale, transfer or subscription of, or any solicitation of any
offer or invitation to buy or subscribe for any share in the
Company or to engage in investment activity (as defined by the
Financial Services and Markets Act 2000) in any jurisdiction nor
shall it, or any part of it, or the fact of its distribution form
the basis of, or be relied on in connection with, any contract or
investment decision whatsoever, in any jurisdiction. This
announcement does not constitute a recommendation regarding any
securities.
The information and opinions contained in this announcement are
provided as at the date of this announcement and are subject to
change and no representation or warranty, express or implied, is or
will be made in relation to the accuracy or completeness of the
information contained herein and no responsibility, obligation or
liability or duty (whether direct or indirect, in contract, tort or
otherwise) is or will be accepted by the Company, Foresight Group
LLP or any of their affiliates or by any of their respective
officers, employees or agents in relation to it. No reliance may be
placed for any purpose whatsoever on the information or opinions
contained in this announcement or on its completeness, accuracy or
fairness.
The information in this announcement may include forward-looking
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"continue", "target", "believe" (or the negatives thereon) or other
variations thereon or comparable terminology. These forward-looking
statements, as well as those included in any related materials, are
subject to risks, uncertainties and assumptions about the Company,
including, among other things, the development of its business,
trends in its operating industry, and future capital expenditures
and acquisitions. In light of these risks, uncertainties and
assumptions, the events in the forward-looking statements may not
occur.
No representation or warranty is given to the achievement or
reasonableness of future projections, management targets,
estimates, prospects or returns, if any. Any views contained herein
are based on financial, economic, market and other conditions
prevailing as at the date of this announcement. The information
contained in this announcement will not be updated.
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