Cumberland Forest Project Acquires Nearly 400 Square Miles of Forest Land in the U.S. Central Appalachians
$130 million investment fund to promote forest health, carbon storage and economic opportunities in Kentucky, Tennessee and Virginia
The Nature Conservancy (TNC) today announced that the TNC-managed Cumberland Forest Project has acquired 253,000 acres of working forest land in the Central Appalachian coalfields of Kentucky, Tennessee, and Virginia. The project represents one of the largest and most innovative land conservation and ecological restoration efforts ever pursued by TNC in the eastern United States, as it uses private investment and impact capital to conserve iconic American landscapes and demonstrate the economic and ecological benefits of sustainable forest management.
With a total land area bigger than the five boroughs of New York City and the District of Columbia combined, and just shy of Colorado’s Rocky Mountain National Park, the Cumberland Forest Project includes 100,000 acres spanning Kentucky and Tennessee, announced in April, and another 153,000 acres in Virginia, announced today.
The project builds on TNC’s track record in sustainable forestry, including the nearby Clinch Valley Program in Virginia, and the multi-state Working Woodlands Program. What sets Cumberland Forest apart, however, is its design as an impact investment fund that seeks competitive rates of return for third-party investors. TNC is a co-investor in the fund and will manage the properties as the fund’s General Partner.
“Nature is one of the most important investments we can make,” said Tom Tierney, chair of the board of directors at The Nature Conservancy. “The Cumberland Forest Project deploys private capital as a powerful tool to achieve large scale conservation. What’s more, we think this will prove that sustainably managing natural assets can be good business and deliver big benefits to wildlife, water quality and the local economy.”
The Central Appalachian region spans six states and, at more than 50,000 square miles, is among the most awe-inspiring landscapes in America. TNC research has identified the region as a globally significant biodiversity hotspot, a major North American migratory corridor, and home to a network of watersheds vital to both people and nature. The properties acquired in the Cumberland Forest Project feature expansive climate-resilient forests and more than 700 miles of headwater streams that feed into globally important waters, including the Clinch, Cumberland, and larger Tennessee and Ohio River Systems.
But achieving conservation goals at such a scale is difficult if relying solely on philanthropic funding. By structuring the project as an investment, TNC built on its decades of donor-funded scientific research and forestry expertise to offer impact-oriented investors a new perspective on the economic value of nature. The project’s capital includes equity investments from several limited partners.
A loan supporting the project—known as a Program Related Investment, or PRI—was provided by the Doris Duke Charitable Foundation (DDCF), which has previously supported TNC’s research and forestry work in the Central Appalachians. “We’re excited to make the largest single investment in the Foundation’s history to help protect this essential piece of the Appalachians, North America’s most critical climate migration corridor,” said Sacha Spector, program director for the environment at DDCF. “This project offers a spectacular demonstration of how land conservation and restoration at this scale can safeguard wildlife, support a community’s livelihoods, and secure the climate resilience of an entire region.”
The Cumberland Forest Project seeks to recognize and protect the comprehensive value of nature for the long term, whereas traditional forestry strategies often undervalue nature’s co-benefits. TNC’s sustainable practices aim to improve and maintain the health of these forests and generate revenues through the sale of FSC-certified timber, carbon offsets and recreational leases. As markets for carbon, water quality, and biodiversity have matured, managing forests to maximize value beyond timber alone can be an attractive strategy and provide diversification – both biological and financial. With this approach, the project aims to protect wildlife habitat, secure clean water for people and nature, and sequester atmospheric carbon to mitigate climate change, all while fostering important investments in local economies.
In the Central Appalachians coalfields, those same economies have been driven by natural resource extraction for more than a century, including both forestry and mining. As is common in this region, ownership of these properties is divided in two: a surface estate, which was acquired by the Cumberland Forest Project, and a sub-surface mineral estate, which will continue to be owned by third parties. Because the mineral rights are held by third parties and subject to prior agreements, TNC has limited control over mining activities on the properties; however, the project intends to work with regulators and mining companies using a collaborative, science-based approach to advocate for best environmental practices and restoration that can minimize the impacts of mineral extraction.
As the surface owner, the Cumberland Forest Project expects to receive compensation for any impacts these existing mining operations have on the properties’ forests and infrastructure and can direct those funds to restoration and conservation activities. In addition, the project is expected to receive royalties, which it plans to contribute in their entirety to third-party community organizations to support local economic and community development efforts. TNC’s collaboration with those organizations will further the project’s commitment to support economic opportunities including sustainable forestry, recreation and tourism.
The 100,000-acre property in Kentucky and Tennessee is known as Ataya. The 153,000-acre property in Virginia, known as Highlands-Lonesome Pine, was acquired from an investment fund managed by The Forestland Group, a timberland investment management organization focused on the sustainable management of natural forest ecosystems. The Forestland Group had managed the Virginia property in accordance with FSC standards and enrolled it in an Improved Forest Management program with the California Air Resources Board.
The Cumberland Forest Project was developed by a collaboration among TNC’s NatureVest conservation investing team and its Kentucky, Tennessee and Virginia programs, which have worked in the Central Appalachians for decades. Legal support for fund formation and real estate transactions was provided pro bono by Cleary Gottlieb.
The Nature Conservancy is a global conservation organization dedicated to conserving the lands and waters on which all life depends. Guided by science, we create innovative, on-the-ground solutions to our world's toughest challenges so that nature and people can thrive together. We are tackling climate change, conserving lands, waters and oceans at an unprecedented scale, providing food and water sustainably and helping make cities more sustainable. Working in 79 countries and territories, we use a collaborative approach that engages local communities, governments, the private sector, and other partners. To learn more, visit www.nature.org or follow @nature_press on Twitter.
ABOUT NATUREVEST: As TNC’s conservation investing unit, NatureVest sources private investment capital to help fund efforts to protect land and water, tackle climate change, provide food and water sustainably and build healthy cities. TNC launched its impact capital strategy in 2010 and launched NatureVest in 2014 as a concerted effort to change the way we invest in nature. To date, NatureVest has closed $373 million in transactions. To learn more, visit www.nature.org/naturevest.