Investing in Forests: Causes and Consequences of Indiscriminate Deforestation

2 min. reading
Climate change, Forestry / 5 March, 2022
Investing in Forests: Causes and Consequences of Indiscriminate Deforestation

Karla García Gil Journalist

Forest degradation has advanced at an alarming rate in recent years. It is estimated that, since the 1990s, around 420 million hectares of forest have been lost, according to the study “The State of the World’s Forests 2020”, published by the Food and Agriculture Organization of the United Nations (FAO). A strong investment in this direction is important to alleviate the consequences of deforestation and boost sanitation.

Forests serve valuable functions in nature and losing them is very detrimental. Among the main impacts are: loss of biodiversity, soil erosion, alterations in the water cycle and increased CO2 concentrations in the atmosphere. In this regard, it is estimated that 20% of total emissions are due to forest deforestation, the main causes of which are indiscriminate logging, cattle ranching and the expansion of urban centers.

In addition, it is estimated that 30% of forests are deforested due to the expansion of farmland. If we continue at this rate, by 2050 these lands will have expanded by 42 percent.

How to invest in the forestry industry and its benefits

How to invest in the forestry industry and its benefits

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.

Forestry and reforestation

Silviculture is an activity that consists of controlling the health and quality of forests and is essential for conservation. The interventions applied respond to specific objectives such as: protecting degraded adult forests, secondary forests, burned forests and plantations, as well as their reforestation and the preservation of biodiversity.

Reforestation consists of replanting trees in areas that were previously forests or had a certain volume of vegetation and today, it is an essential operation for the survival of human beings and other living beings. Part of its importance lies in the production of the oxygen necessary for life; it is not in vain that large natural extensions are called “lungs of the Earth”.

Many reforestation practices recommend immediate planting once a forest has been cut down or destroyed. Logging companies are obliged to restore the ecological balance by planting new trees after their activity, according to regulations in many countries.

In terms of investment, the most promising investments in forestry and sustainable forest management are in developing countries, such as Latin America and the Caribbean, which have about 50% of the world’s primary forests, considered the most important, covering more than 663 million hectares.

Forestry investment, in this sense, is an opportunity to participate in an environmentally responsible enterprise that has the potential to generate returns on your money and, at the same time, help preserve the forests and the planet itself.

How to invest in Forestry?

From BBVA New Gen we have compiled the companies and investment funds that are dedicated to Forestry find out how to invest in the companies that are revolutionizing the sector

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