Investment managers who have bought up forestland are going tree by tree to figure out whether they should be felled for timber or kept up for carbon-credit generation.

Growing demand for credits means investing in forests isn’t just about producing timber, but it can take a lot of legwork to determine what role each tree should play in a portfolio, as well as ensure it is delivering its promised environmental benefit if left standing.

“If you invest in a forest, the question we ask is, ‘How do you manage wood products versus carbon?’” said Brian Kernohan, chief sustainability officer, private markets, at Manulife Investment Management. “The answer to us is, ‘What do our clients want?’”