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Principles for achieving sustainability

The fund’s unlimited duration is at the core of a long-term sustainability strategy that contributes to the goal of preserving nature. We strive to manage assets in keeping with ESG and sustainable management practices, creating value for our investors and society.

We seek to become one of the European Union’s leading and most trusted funds working with sustainable alternative investments while creating long-term benefits for nature and enabling investors to contribute to protecting nature for future generations.

More specific and detailed information related to environmental or social characteristics promoted by the Fund is available here.

Global sustainable management practices

Both forests and arable land are managed in accordance with global sustainable management practices. The aim is to have a positive environmental, social and governance (ESG) impact on the countries we work in.

Following the objectives of the European Green Deal

By investing in forest and agricultural land and applying sustainable management practices, the fund contributes to the EU-wide objectives of reducing carbon dioxide (CO2) emissions and achieving carbon neutrality.

Conservation of nature

The unlimited duration of the fund shapes a long-term sustainability strategy that contributes to the objective of preserving the Earth for future generations. One of the fund’s very specific goals is to preserve green islands of mosaic landscape and natural habitats for flora and fauna that may be designated or acquired along with other assets.

International standards

The INVL Sustainable Timberland and Farmland Fund II, by implementing the principles of sustainability in its activities, contributes to the  United Nations Sustainable Development Goals (SDGs).

Essential principles of sustainability we apply in our investments:

  • Protect the environment, be socially responsible and practice transparent corporate governance.
  • Follow best market practices and the recommendations of international organisations for long-term management of forests and land.
  • Maintain a healthy and thriving local ecosystem, enabling sustainable long-term value creation.

Sustainable forest management

Forests owned by the INVL Sustainable Timberland and Farmland Fund II are managed sustainably. Portfolio companies undertake to operate according to the FSC® principles and criteria. In Lithuania, the entire forest management is administered by UAB Šalnupis, which has been granted an FSC® Group Forest Management Certificate (certificate code NC-FM/COC-067275, trademark license code FSC-C177006). Sustainable Forest Management Policy of the INVL Sustainable Timberland and Farmland Fund II can be found here.

The Forest Stewardship Council® (FSC®) is an international nongovernmental organization that promotes environmentally appropriate, socially beneficial, and economically viable management of the world’s forests. To learn more, visit their website.

Examples of sustainable forest management

  • The fund’s sustainably managed forests:
    • contribute to climate change mitigation and other ESG objectives;
    • contribute to the development of the local economy;
    • provide shelter and habitats for flora and fauna to thrive;
    • allow local residents and tourists to enjoy nature trails for leisure and help improve people’s well-being.
  • The sustainable management of forests:
    • is in accordance with standards of sustainably managed forests, international and national agreements and legislation;
    • ensures the social and economic well-being of employees;
    • is done in cooperation with local residents and in a way which can contribute to the strengthening of local communities;
    • is carried out in a way which would allow forests to thrive for centuries and simultaneously provide people and the environment with a wide range of benefits:
      • we have defined a maximum annual rate of harvesting to incremental growth, which does not exceed the level of sustainable forest use;
      • we ensure that the ratio of the sum of areas of mature and near-mature forest stands to the total managed forest area would be at least 20%;
      • we look after and protect the prosperity of landscape, environment and culture;
      • we are committed to leave at least 10% of owned forests for natural dynamics except for the cases when it is necessary to be done in order to maintain biodiversity or deal with the effects of a natural disaster;
      • we protect trees with breeding caves, nests, loose bark and other microhabitats, champion trees, veteran trees and multi-stem trees;
      • we do not carry out felling near water bodies.

Why do we need to manage forests sustainably?

The climate benefit is greater if a forest is sustainably managed and the wood that is harvested is used for products that replace fossil fuels and other pollutants (oil, cement, metals, etc.) than if the forest is left to grow and the timber resources are not used (Holmen, 2019).

A sustainably managed forest, which is regularly planted, cleared, thinned, and is harvested every ~70 years, builds up a stock of wood that can be used to replace other materials and energy sources. This has a positive impact on climate due to the substitution effect.

In a forest managed based on an unsustainable model, trees are allowed to grow freely for up to 300 years, so a stock of timber accumulates once and changes only slightly over time. Even though trees absorb and store carbon dioxide, the substitution effect is not exploited in such a forest at all.

Sustainable farmland management

  • The fund’s land is worked by farmers who provide the community with good-quality, safe, wholesome agricultural and food products:
    • we rent land to farmers and agriculture companies whose main activity is food production;
    • we aim to use some of the land owned for ecological farming;
    • we avoid leaving highly productive land that is suitable for food production unused unless there are plans for afforestation or other ecological objectives;
    • we invest in meadows and pastures that are suitable for livestock. We ensure that the land use is not changed.
  • Prosperous farms provide people in rural areas with the income to live with dignity and preserve a way of life that is valued and loved:
    • we maintain a balance between small and large businesses. Land is rented both to agricultural companies and to small farmers, usually on the basis of who worked the land before the sale;
    • we rent land to farms that are viable and have a good reputation;
    • we seek to work with farms that use advanced technologies or management practices;
    • we work with family farms and are in favour of small acquisitions to ensure the growth and competitiveness of family farms;
    • we invest in land suitable for mixed farming and encourage collaboration among the family farms that combine ecological and recreational activities in our region.
  • Responsible land management keeps the environment clean and safe, preserves the landscape and biodiversity, and helps ensure the quality of the soil:
    • we work with farmers that conduct planned crop rotation;
    • we work with farmers that practice precision fertilisation;
    • we work with farmers that participate in agri-environment schemes;
    • we invest in mixed-use land and protect mosaic landscape elements.