Category: Insight

Catalyzing the Next Generation of Climate-Smart Forestry

Posted on | by Colette Smith | Leave a Comment on Catalyzing the Next Generation of Climate-Smart Forestry

How the Olympic Rainforest Is Demonstrating a Scalable, Multi-benefit Model for Forest Management 

Working forests have provided products like timber and paper to the global economy for centuries. Today, their value is broader and more urgent than ever. Forests offer a vital opportunity to address climate change, conserve biodiversity, expand recreational access, and protect critical ecosystems, all while continuing to produce commercial forest products. 

That’s the promise of climate-smart forestry: an approach to forest management that seeks to generate financial returns while maximizing long-term ecological and social value. EFM—a forest investment and management firm with a two-decade track record—has been at the forefront of this shift since 2005. 

With its recent acquisition of the 68,000-acre Olympic Rainforest in Washington State, EFM is demonstrating how climate-smart forestry can scale: combining sustainable timber production with carbon sequestration, biodiversity conservation, recreation, and community partnerships. It’s a model for what the future of forest management—and forest-based climate solutions—can and must become. Capitalizing this expansion, however, requires collaboration and creativity in financing.   

A Landscape of Global Significance  

EFM’s newest acquisition—the Olympic Rainforest—is a coastal temperate rainforest located adjacent to Olympic National Park, a UNESCO World Heritage Site. Previously managed for industrial timber production for nearly a century, this 68,000-acre property is uniquely positioned to showcase how FSC-certified, climate-smart forestry can deliver meaningful climate, conservation, and community outcomes. 

The Olympic Rainforest contains more than 10 million tonnes of stored carbon and is home to six species listed under the Endangered Species Act, including critical habitat for wild salmon. By transitioning the property to a more sustainable forest management model, EFM plans to nearly double timber stocks over 15 years, while also sequestering a projected one million additional tonnes of CO₂ over the next decade through an Improved Forest Management (IFM) carbon project—one of the largest in the Pacific Northwest. 

But the benefits go far beyond carbon. EFM is also seeking to enhance biodiversity, protect watersheds, support tribal cultural values, improve flood resilience, and expand public access for recreation. The acquisition of this land allows for landscape-scale conservation in a globally significant area with one of the largest old-growth forests in the continental U.S. It offers the opportunity to influence conservation and restoration on 5 million acres and create a 150-mile conservation corridor—from Hood Canal to the Olympic Marine Sanctuary on the Pacific Coast. 

Unlocking Carbon Finance with Meta and Microsoft  

Forest carbon projects are typically developed only after land is secured. A major barrier to their success is the risk project developers like EFM take on before knowing the buyer, the demand and the price of the credits.  

EFM flipped the script by securing long-term carbon offtake agreements during the acquisition process. Meta and Microsoft committed early to purchase high-quality carbon removal credits from the Olympic Rainforest project, providing critical revenue certainty that helped de-risk the acquisition for investors and affirmed EFM’s climate-smart approach as a credible, long-term strategy. 

Meta’s agreement for 676,000 credits through 2035 catalyzed the transaction, while Microsoft followed with an agreement for up to 700,000 credits. These are among the first known contracts of this kind—structured in parallel with a property acquisition—marking the growing sophistication of carbon finance in the forestry sector. 

Meta and Microsoft are exactly the kind of counterparties EFM values when developing a carbon project. Both entities have deep commitments to climate action and use carbon credits as a tool alongside broader decarbonization strategies. 

Investing in Scale: Microsoft’s Support for EFM Fund IV  

In Microsoft’s case, the partnership with EFM was two-fold. The Olympic Rainforest property was purchased by a consortium of buyers that included EFM Fund IV. Microsoft’s Climate Innovation Fund made an early investment in Fund IV, marking its first forestry investment in the U.S. This support provides a cornerstone for the Fund’s goal of raising $300 million to scale climate-smart forestry across more properties like the Olympic Rainforest. 

One of the attractive aspects of the Fund for Microsoft was the ability to source more high-quality IFM carbon credits from future Fund IV assets. This dual investment approach—at both the project and platform levels—unlocks access to an estimated 2.3 million additional credits through the acquisition of other priority landscapes. It also sends a powerful market signal that forest-based carbon credits are essential and investable climate solutions. 

EFM Fund IV: Scaling Climate-Smart Forestry Across the U.S.  

EFM Fund IV is designed to deploy up to $300 million into the acquisition and management of working forests that can generate financial returns while delivering measurable climate and ecological benefits. The fund focuses on properties in the Western United States – and elsewhere in the country – that are suitable for climate-smart forest management, with the goal of maximizing carbon sequestration, enhancing biodiversity, and improving long-term forest resilience. 

By integrating revenue from timber, carbon, conservation easements, and recreation, Fund IV seeks to demonstrate how forests can serve as diversified, high-performing natural assets. The fund’s first investment—the Olympic Rainforest property—sets the standard for how this strategy can be executed at scale. Fund IV will seek to replicate this model across priority geographies where climate-smart forest management can provide a competitive advantage for investors and long-term benefits for local communities. 

Climate-Smart Forestry in Action  

EFM’s approach to climate-smart forestry is rooted in long-term stewardship, blending financial performance with ecological resilience. The firm implements forest management practices that extend harvest rotations, restore degraded stands, protect high-value conservation areas, and maintain continuous forest cover. All EFM properties are FSC-certified, ensuring that timber is harvested responsibly and sustainably. 

On the carbon front, EFM is also raising the bar on integrity in Improved Forest Management (IFM), using dynamic baselines, conservative harvest assumptions, and a rigorous, transparent approach to project design. These innovations ensure that carbon credits represent durable, measurable, and additional climate benefits. See the press release here.

A New Model for Nature-Based Climate Solutions  

Together, the Olympic Rainforest acquisition, carbon offtake agreements, and platform investments represent a transformative new model for how nature-based solutions can be financed at scale. They demonstrate how aligned capital, climate-smart management, and collaboration can unlock the full potential of forests to deliver value across a broad front. 

EFM is proving that climate-smart forestry is not only viable—it’s scalable. The Olympic Rainforest is just the beginning. 

U.S. Rejoins Paris Climate Agreement

Posted on | by Carla Hudson | Leave a Comment on U.S. Rejoins Paris Climate Agreement

In one of his very first acts after taking the presidential oath, President Biden signed an executive order for the U.S. to rejoin the Paris Climate Agreement, following Trump’s announced withdrawal in 2017.  This landmark international accord has been adopted by almost every nation (with the sole exception of war-torn Syria) and it aims to substantially reduce greenhouse emissions to limit global temperature increase to 2 degrees centigrade.  Despite limited participation by the federal government as a result of the U.S. withdrawal, U.S. cities, states, and the private sector have participated extensively, leading to significant local and regional efforts and corporate pledges.  In addition, existing regional initiatives, such as the California Climate and the Regional Greenhouse Gas Initiatives, have continued to expand their activities over the last four years.  Nevertheless, the U.S.’s planned withdrawal resulted in some countries failing to act on their climate commitments, citing the futility of making sacrifices to reduce global emissions while the world’s second largest polluter (after China) was not doing its part.

 

Forests play a very important role in the Paris Agreement.  Article five of the Agreement references the need to “implement and support…policy approaches and positive incentives to reducing emissions from deforestation and forest degradation, and the role of conservation and sustainable management of forests…” and includes mechanisms for payments from one country to another based on proven sequestration of additional carbon beyond that country’s commitments.  The emphasis on forests in the Accord is underpinned by substantial research indicating that over one third of cost-effective strategies to reduce emissions in the next ten years can be found in the conservation and improved management of forests.

 

Under the Paris Agreement the U.S. has committed to reduce its emissions by 26-28% by 2025 and 80% by 2050 relative to emissions in 2005.  To meet those long-term targets, the U.S. will need to invest in forests and other natural climate solutions, and President Biden’s Plan for Climate Change and Environmental Justice has set a goal of leveraging natural climate solutions by conserving 30% of America’s lands and waters by 2030 as well as devoting significant resources to reducing the incidence and severity of forest fires.

 

How do these goals translate into specific incentives and mechanisms for climate-smart forestry?  The Biden Plan does not have details yet.  However, we can be confident that there will be a large investment in enhancing climate data and applied science, leading to efficiencies in estimating and monitoring forest carbon.  This will expand participation by landowners currently shut out of private carbon market by high entry costs and will help value the important role of public forests as carbon sinks.  There may be tax incentives and policies to encourage reforestation, and there will certainly be funding to reduce forest fires, including activities such as thinning, fire breaks, and controlled burns, and conservation easement funding to limit housing development in intact forests.  Funding is likely to expand for the acquisition of forests by public entities, including the U.S. Forest Service, community forests, water districts and other owners engaged in carbon-enhancing forest management, as well as payments to private landowners for improving carbon stocks.

 

 

At EFM we have implemented a carbon-forward style of forest management since inception, including longer rotations, forest reserves and retention during harvests. We have already captured some of this increased carbon value through sales of carbon credits to General Motors and Nike and through conservation easements which protect forest carbon stores over the long term.  Whether federal participation in the Paris Accord comes through enhanced cap and trade markets, direct incentives, or other mechanisms, we believe investors in EFM forest funds stand to benefit, as do forested landscapes, rural communities, and the climate.

A More Equitable World

Posted on | by Carla Hudson | Leave a Comment on A More Equitable World

We are heartbroken over the unconscionable killings of George Floyd, Breonna Taylor and Ahmaud Arbery, and the disproportionate and continued suffering inflicted on Black men and women due to the systematic racism that persists across our society.  It’s important for us to speak up against this injustice, to acknowledge our privilege and advocate for the change needed to create a more equitable world.

We are inspired by the Black Lives Matter protests that continue across the world that shine light on the need for all people to address this inequity and commit to contributing to long-term change.

Our first step is to look inward to improve our commitment and action to diversity equity and inclusion principles and to address immediate needs by donating to nonprofits that promote equity in our community, including:

  • Don’t Shoot Portland https://www.dontshootpdx.org/ which supports activists and works to shift cultural and systemic discrimination
  • Wild Diversity https://wilddiversity.com/ which creates a sense of belonging in the outdoors for BIPOC & LGBTQ+ communities
  • Black Food Sovereignty Coalition, https://blackfoodnw.org/ which confronts the systemic barriers that make food, place and economic opportunities inaccessible to Black and Brown communities

We are fortunate to be surrounded by an impact community and nonprofit partners that offer guidance on how we can be appropriate advocates and contribute to lasting change.   We are dedicated to becoming better advocates for climate justice and racial equity.