Enviva responds to short-seller report

Enviva Inc., the world’s leading producer of sustainably sourced wood biomass, on Oct. 12 issued the following statement in response to allegations made in a report by a self-proclaimed short seller.

The report contains numerous errors, repeats previous unsupported speculation and gross mischaracterizations, and draws specious, misleading conclusions. The short position on the company increased substantially in the weeks leading up to the distribution of the spurious report, with almost 4 million shares currently shorted. While the company acknowledges the role of short selling in creating balance in the public markets, it strongly condemns the unscrupulous practice of “short and distort” campaigns in which short sellers intentionally publish false and misleading claims to needlessly alarm investors and manipulate the market for their own profit.

Enviva remains steadfast in its continued and unwavering commitment to maintaining the highest standards of corporate governance, integrity, sustainability, forest stewardship, and continuous improvement. Additionally, Enviva recently updated full-year 2022 financial guidance, which included leverage expectations and the reaffirmation of dividend expectations, in an Oct. 3, 2022 press release, demonstrating the company’s continued expectation of generating strong, durable, and growing cash flows. As stated in that press release, as Enviva looks forward to 2023 and 2024, it continues to be very well-positioned for robust cash-flow growth, even in an environment with potential recessionary pressures.

Tracts in the working forest landscape of the U.S. South are harvested for many forest-related products, including telephone poles, dimensional lumber, manufactured wood products, furniture, paper products, and packaging materials. As the company has explained before, Enviva augments the productivity of these working forests by purchasing residuals from the harvest and turning them into a renewable energy feedstock that replaces fossil fuels in electricity generation, heat generation, and other hard-to-abate sectors such as sustainable aviation fuel. When companies like Enviva are not present to purchase these residuals, the material most often is left on the tract to decay or is intentionally burned. As the company has further explained before, notwithstanding select instances where we take an above-average percentage of a stand to support forest health, among other reasons, forests in the U.S. South are neither grown nor harvested for wood pellet production.

Harvesting does not equate to deforestation. In fact, the sustainable forestry and harvesting practices employed in the U.S. South are a significant contributor to healthy, stable forests. According to the U.S. Forest Service, the U.S. forest area has been stable for over 100 years, despite the U.S. population more than tripling during that timeframe, and the overall area of forests in the U.S. South has been expanding since the early 1980s. Specific to Enviva, the forest inventory of standing timber in our catchment area has increased by 21 percent since we began operations.