Multinationals investing in forestry

We believe that forestry investments are an excellent choice for people searching for secure investments, which offer a tangible asset and protection against inflation and stock market fluctuations. It produces a steady income from the production of wood, and the investment also grows as the land value increases. It has been seen that in tough times, real assets such as forestry outperform other financial investments, therefore they are excellent ways to diversify your portfolio. It is also a responsible investment, as it is a way to protect the environment and slow deforestation. Find out why investing in forestry is a smart move on our website or download our investing in forestry guide.

We are not the only one that think forestry investments are a smart move, a raft of high profile multi-nationals are also investing in this sector. China is investing heavily in forestry, with their overseas forest project investments increasing from eight in 2007, to 84 in July 2015.

At the end of last year, Ikea pledged to invest €1 billion in recycling companies and forests, as part of a series of sustainability pledges, adding to the 74,700 hectares of forest it already owns, a report in the Guardian revealed.

The importance of Corporate Social Responsibility is encouraging companies to look for investments in forestry. For example, Nordic bank Danske Bank released a positioning statement relating to forestry as part of their CSR strategy to promote sustainable forest management. They stressed their commitment to ensure that investments made in the forestry industry were sustainable and followed international standards.

There are signs that investments such as these can protect forests and help with conservation, as trees are the most effective way to capture carbon emissions, and clean the air we breathe. Deforestation is a huge problem worldwide, with forested areas the size of 48 football fields being lost every minute. Deforestation contributes to climate change, causes biodiversity loss, flooding and soil degradation and so if we can invest in protecting trees and planting more, we can do our bit in protecting our environment.

JPMorgan Chase collaborated with The Nature Conservancy, EKO Asset Management Partners, the David and Lucile Packard Foundation, and the Gordon and Betty Moore Foundation to create a data-driven report characterising the landscape of investments in the conservation of nature. It stressed that “mobilising private capital to invest in and protect critical natural assets in essential” and that there was scope for investments which both had a meaningful environmental benefit and financial return.

“The report finds evidence of rapid growth and increasing interest in the market, which implies that much of the future of conservation lies with impact capital. Through an investor survey, we documented $23.4 billion in global conservation impact investments from 2009 through 2013. Investments by development finance institutions (DFIs) such as the International Finance Corporation totalled $21.5 billion; private investments accounted for $1.9 billion. While private investment accounted for a small share of the total market, we found that it grew at an average rate of 26% annually from 2009 through 2013. Further, from 2014 through 2018, private investors expect to deploy $1.5 billion of already-raised capital and to raise and invest an additional $4.1 billion.”

We are passionate about helping the environment, while giving our investors healthy and steady long-term returns, and believe that investing in forestry is an excellent option. To learn more about it, download our free investing in forestry guide or contact us to discuss the options.

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