Impact Journalism Day by Sparknews: A better world - No. 45

Money does grow on trees

PARIS • For years, it was accepted that protecting forests was the job of charitable organisations. A German environmentalist named Harry Assenmacher came to feel that this was a faulty assumption.

That was the seed of ForestFinance, the firm he founded in Bonn. It sells "sustainable forest products" as an investment class, akin to stocks and bonds.

It invites investors to buy shares (that is, trees) in forests that are ethically and sustainably managed.

 

In Panama, Colombia, Peru and Vietnam, the company's partners plant mixed-species forests, designed to provide habitats for wildlife and offset CO2 emissions.

Investment products include long-term and short-term plans. In the TreeSavingsPlan, customers lease a parcel of land on which trees are planted. Twenty-five years later, the trees are selectively harvested, leaving the forest intact; investors earn money off the sale of timber.

For those who prefer not to wait so long to see returns, there is CacaoInvest. Payouts begin as early as in five years.

ForestFinance's cocoa forests in Panama. The firm invites investors to buy shares (that is, trees) in forests that are ethically and sustainably managed.
ForestFinance's cocoa forests in Panama. The firm invites investors to buy shares (that is, trees) in forests that are ethically and sustainably managed. PHOTO: FORESTFINANCE

Investing in forests is not without risks such as fire, drought and insects, so ForestFinance offers insurance for the first five years after planting, when trees are most vulnerable.

Over the past decade, ForestFinance has collected more than US$10 million (S$13.5 million) from 17,000 clients. More than 90 per cent of them are in Germany, with newer investors elsewhere in Europe.

One private investor who appreciates this logic is Mr Tom De Fauw, who put in US$30,000, a substantial sum for someone whose other investments run to some stocks and his mortgage.

So far he has seen only a small return, but he is optimistic about long-term results. And, he said: "It's a feel-good investment."

A version of this article appeared in the print edition of The Straits Times on June 25, 2016, with the headline 'Money does grow on trees'. Print Edition | Subscribe