Financing nature

Global warming and the fact that the world is in the midst of one of the most dramatic extinction episodes in history are the two issues overshadowing everything at the moment. Many would like to see a green re-start of economies after the COVID-19 pandemic.

As a forester, I am interested to see, how the forestry sector is responding to this global crises specifically in terms of contributions towards fulfillment of the Paris Agreement as well as the UN Convention on Biological Diversity.

There are a number of initiatives being taken across the world, both by individual forest owners as well as corporations aiming at protection and restoration of forests through so called nature-based solutions and carbon markets. There are also attempts at implementing biodiversity credits.

All of these initiatives need financing, and the investors today seem to have a growing appetite for green financial products and impact investing.

In Sweden today however, to my knowledge, there is only one green financial product based on forestry, and that is the green bond issued by Landshypotek Bank which is based on the sustainable forest management of privately owned forests included in the bond.

What if we could create a biodiversity impact bond for conserving or restoring specific habitats? What if we could create natural climate solutions in our forests? After all, recent science indicates that this can provide up to a third of the cost-effective, near-term mitigation potential needed by 2030 to stay below 1,5 degrees Celsius of warming.

If anyone is reading this, and has some interesting input on the subject, I’d love to hear from you.

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