What's the secret of Chestnut's apparent success in a sector where some other developers have struggled in recent years?

Chestnut was founded in 2022, backed by a private equity firm, Kimmeridge. At inception we had an infrastructure, a view about risk-adjusted returns and access to capital that a lot of other folks just don't have. That was certainly a tremendous starting point.

Our business model is elegantly simple - we buy land, plant trees, sell carbon credits. Or in the case of improved forest management, work with third-party landowners. For me it's 'do one thing and do it really well' — or in our case two things, IFM and afforestation.

We just keep it simple, and focus on delivering the highest-quality, highest-integrity product, either IFM or afforestation in our case, to our customers as possible.

We had a thesis that if we build a conservation-level forest that's utilising native species, with biodiversity, multiple species of hardwoods and softwoods, and we build this project to the highest standards for afforestation, then discerning buyers will come. And in early 2023 we found ourselves responding to an RFP from Microsoft, and off we went.

How have you found the process of engaging with buyers?

Ultimately we're selling reputational risk insurance. We're catering to voluntary carbon credit buyers for whom both quality and integrity matter most. They don't need to buy, they choose to buy.

Taking Microsoft as an example: Whatever they pay for a credit from Chestnut is going to pale by comparison if what they buy from us ends up in a negative article from a reputational standpoint.

The reputational impact to them is going to outweigh whatever money they would have paid for our carbon credit. And so we recognise that and  cherish that, and we want to make sure that we are good stewards of that trust they impart in us.

It's really a case of curating these projects, doing that best that we possibly can, and delivering on what we said we were going to do.

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