Gresham House
Specialist asset management
An in-depth report on the impact of climate change on forestry markets
An in-depth report on the impact of climate change on forestry markets
Climate change introduces new dynamics to the timber market, presenting both opportunities and challenges. In this detailed report, we evaluate how these dynamics will impact the market for coniferous sawnwood – a key end-product for global timber markets.
📈 Demand is rising
We project demand to increase by 50-80% by 2050 compared to 2022 levels, depending on the extent of global warming and the policy responses implemented. This level of growth is high, but we consider realistic, given that demand has already grown by 40% over the past 25 years in a global environment that was less focused on decarbonisation.1
🌲 Supply is constrained
By contrast, we project supply to only increase by 10% relative to 2022, with potential downside from forest disturbances. The limitations of supply-side data create additional uncertainty, and the expected supply-demand gap may contribute to upward pressure on timber prices, enhancing the value of forestry assets.1
💼 A valuable tool for diversification
We believe these future supply-demand dynamics are likely to enhance timber’s capacity to generate stable cash flows and provide returns that demonstrate low correlation with other asset classes. This makes timber a valuable tool for portfolio diversification in a changing investment landscape.
🌿 Supporting sustainability
Opportunities lie in technological innovations in timber products, supportive policies promoting sustainability, and revenue generation through emerging carbon and biodiversity markets. We also anticipate increased focus by policymakers on the environmental and social integrity of timber and other natural capital asset classes.
📩 Request your copy
To explore the full insights, including demand modelling based on IPCC climate scenarios and policy responses, please request a copy of the Gresham House Global Timber Outlook 2025. A member of our team will follow up with access details.
1. FAO STAT, 2024
Authors
 |
 |
| Elise Macdonald Investment Associate |
Dorian Van Raalte, CFA Associate Director |
Get in touch
For more information on our products and services, please contact our Distribution team.
 |
 |
 |
| Claire Glennon Head of UK Institutional Sales |
Heather Fleming Managing Director, Institutional Business |
Ben Gunnee, MSc FIA Head of Institutional |
| M: +44(0) 77882 91515 E: c.glennon@greshamhouse.com |
M: +44(0) 7872 685 532 E: h.fleming@greshamhouse.com |
M: +44(0) 7756 881 883 E: b.gunnee@greshamhouse.com |
Important information
For professional investors only. Capital at risk. The value of investments can go down as well as up and investors may not get back the amount originally invested. Views expressed, including those around market and policy development, are correct at the time of writing but are subject to change.
