Dear Sir or Madam

In 2022, the carbon markets experienced several breakthroughs. The first official EU Carbon Removal Framework for scaling up negative emission technologies - which officially includes Mass Timber since June last year - is one of many examples of the rapid development of this climate-impact industry. The Timber Finance Initiative is part of this industry and has been privileged to experience a successful 2022. I am delighted to be able to communicate a few internal milestones to you.

- Starting this spring, our first Tracker Certificate focusing on the leading manufacturers of engineered timber products will be available at retailers and Swiss banks.

- We are officially registered in the advisory registry of BX Swiss AG and now offer modern timber investment advisory services

- With the addition of Stefano Charrey, our new Head of Investment Research, we have been able to strengthen our Finance Team powerfully. Welcome, Stefano!

In addition, we are pleased to announce that the Migros Pioneer Fund will support us as an innovation partner over the next three years. The Migros Pioneer Fund is part of the Migros Group's social engagement and enables pioneering projects that break new ground and seek out forward-looking solutions.

For more information on the latest developments from the industry, new studies, and insights, please see below and visit www.timberfinance.ch.

With best regards!

Erik Reichmuth

Managing Director

FINANCE SOLUTIONS

ROBUST PROSPECTS FOR MASS TIMBER COMPANIES

In a challenging market environment, shares from the forest and timber sector also fell by around 20% in 2022. The Timber Finance Carbon Capture & Storage Index slightly underperformed the broader forest and timber benchmarks, ending the year down 23.4%, but outperformed global homebuilders (-26.0%). Over a three-year basis, the TFI index has significantly outperformed the established timber and forest benchmarks by 36.5% and 46.5%. It exhibits a significant lower volatility than Lumber futures and other basic material prices.

CARBON SOLUTIONS

The EU Commission has published the first framework on carbon removal certificates to scale negative emission technologies in the business environment. What does this framework mean for mass timber – recently acknowledged by the EU and the UNFCCC as a negative emission technology?

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