Climate change and the UN SDGs

New plantation establishment as a complement to existing natural forests and a substitution to carbon-heavy materials in construction

New, green solutions are needed across the board if we are to meet the goals set out in the Paris Agreement and avoid a rise in global temperatures of more than 2° C, seen by many as the absolute threshold or ‘tipping point’ for the irreversible damage that might otherwise occur to our planet. One such solution involves our global forest resource which, if managed properly, can serve as a major climate mitigation tool. To adequately address this issue, a dual effort is needed, where we protect the remaining natural forests and, at the same time, scale up the output from sustainably managed forests.

Trees have a unique ability to store large amounts of CO₂. These properties are especially present in young trees that sequester CO₂ faster than older trees, which start seeping. i.e. releasing, some of the CO₂ that they have previously absorbed from the atmosphere as they degrade. Nevertheless, it is important to note that plantation forests should not replace natural forests, which are vital in their own right, being home to the majority of the world’s flora and fauna and providing unique animal habitats. Instead, plantation forests should be seen as complimentary to the existing forest resource.

Carbon sequestration and storage – made easy

When discussing carbon sequestration and the storage potential of trees, it is important to distinguish between 1) existing natural forests and 2) new plantation establishment. Existing natural forests are essential existing carbon sinks and are often in a state of equilibrium, in which they release just as much CO₂ to the atmosphere as they sequester – i.e. a net zero! New plantation establishment, on the other hand, has the potential to remove significant amounts of the historically high CO₂ emissions from the atmosphere and store these in new productive landscapes.

In other words, by increasing the world’s sustainably managed plantation forests, we increase the amount of young forests and wood material in the world. As such, the green, renewable products coming from these new productive forests will then function as carbon sinks for decades, if not centuries, to come. Wooden floors or timber roof trusses in buildings are but a few examples of such long-term carbon sinks. Lastly, and perhaps most importantly, these green materials will effectively replace other carbon-heavy alternatives such as concrete, steel, and plastic. The so-called substitution effect.

Landscape restoration, climate change mitigation and adaptation

The International Union for Conservation of Nature estimates that approx. 2 billion hectares of degraded areas can support some form of forest landscape restoration (IUCN). To achieve truly sustainable change, it is imperative that we scale up current forest landscape restoration projects as part of existing global climate change mitigation and adaptation.

By definition, Sustainable Forest Management balances economic, social, and ecological functions for the longer term. By carefully integrating productive forest systems into the broader landscape, we also build economically viable forests with the capacity to support the ongoing improvement of ecological functions and livelihood opportunities for millions of people in currently degraded landscapes.

Investments that are sustainable for the environment and your business

Forest investment strategies are diverse and comprise different opportunities for climate, ecosystems, and investors. Through concerted efforts, IWC’s Impact Timberland team seeks to mobilize capital at scale towards the establishment of new forests and landscape restoration, e.g. in Africa, through a blended finance structure, combining investors with different risk-return profiles – but the same impact objectives – into a structured layered equity vehicle. At the same time, investors gain exposure to strong growth wood markets across the world through the team’s focus on diverse geographies and species.

In sum, the positive climate effects achieved when all three elements are carried out in combination – 1) the newly established biological carbon sinks (i.e. the new forests), 2) wood products working as long-term carbon sinks (e.g. timber used in construction), and 3) the substitution/ displacement of big CO₂ emitters such as concrete, steel, and plastic – make new sustainable plantation establishment second to none when we talk about climate change mitigation tools.