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How to invest in the forestry industry and its benefits

2 min. reading
Forestry / 4 November, 2021

Karla García Gil Journalist

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From cloud forests in Mexico, teak tree plantations in Costa Rica, mahogany farms in the Dominican Republic, tropical forests in South America, to eucalyptus plantations in South Africa, there are great possibilities for green investment, and there are almost a billion hectares available on our planet for planting forests.

The importance of forestry to curb climate change

The importance of forestry to curb climate change

The objective of silvicultural practices is to ensure the sustainability of goods and services, increasing the resilience and resistance of forests, that is, their capacity to recover and adapt to climate change.

The forest industry and green capital investments have gained special relevance in recent years. Sustainability is in vogue and is a pressing need, which is why investments in sectors such as forestry stand out and remain solid even in times of financial crisis, since timber is a fixed value that grows regardless of market behavior.

In this regard, the private sector is increasingly investing in the exploitation and management of the world’s forests. According to the Food and Agriculture Organization of the United Nations (FAO), private investment will be the source of financing that will compensate for the current shortage of public investment in the forestry sector.

Silviculture and forest investment

Silviculture consists of controlling the health and quality of forests and is therefore an activity that is essential for conservation. Interventions are aimed at producing timber and other forest goods, preserving biodiversity, protecting watersheds and maintaining pastures for livestock.

Most of the investments in forestry and sustainable forest management are in developing countries; such is the case of Latin America and the Caribbean, which has about 50% of the world’s primary forests, covering more than 663 million hectares.

There are two types of investment in forests: direct and indirect, the former corresponds to the purchase of trees, while the latter is expressed by contributing to a fund. There are companies that buy land to plant trees and then harvest the timber and sell it; others buy forests in order to clean them up, conserve them and reforest them.

There are certificates that provide information on the level of sustainability of a plantation. The two most widely used standards are the Forest Stewardship Council (FSC) and the Pan-European Forest Certification Scheme (PEFC). The objective of the FSC is to promote responsible forest management practices that are viable for forests around the world. The PEFC, on the other hand, stipulates objectives linked to environmental conservation and the promotion of socioeconomic development in rural areas.

Importance of forests

Forests absorb carbon dioxide from the atmosphere to produce oxygen, which is essential for human life on Earth. The progressive loss of forest area obliges us to join efforts for their protection and reforestation.

According to the United Nations Climate Change Conference in 2021 (COP 26), part of the environmental conversations should focus on the conservation and restoration of forests and ecosystems, which is why it is essential for companies to approach the industry.

Forestry investment is an opportunity to participate in an environmentally responsible company that provides its clients not only with monetary gains but also with an active contribution to environmental protection.

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