Private investment in natural world reaches $8.2bn

The amount of privately-held cash being put into conservation projects reached $8.2 billion between 2004 and 2015 amid “growing recognition” that forests represent a smart investment.

Research by Forest Trends shows that the amount of private capital invested into the natural world grew a whopping 62 per cent in just two years, from 2013 to 2015.

Forest Trends’ Ecosystem Marketplace report, which polled 128 banks, companies, fund managers, family offices and non-governmental organisations, found that a “significant amount of investment” is moving into emerging economies, particularly sustainable forestry in Latin America, including Brazil.

Annual investments in new economies quadrupled to over $500 million between 2009 and 2015.

The private sector is seeing environmental benefits as well as significant financial returns from investing in forests and other natural spaces as ‘conservation investing’ becomes more popular, Forest Trends said.

The report’s key findings include:

• Conservation investing experienced dramatic growth after 2013, as total committed private capital climbed 62 per cent in just two years, from $5.1 billion to $8.2 billion.

• Investments in sustainable food and fibre led the way, accounting for $6.5 billion in private capital committed during the decade covered by the report.

• Investors regard conservation investing as a stable return, with 31 per cent of all investors surveyed anticipating rates of return between 5 per cent and 9.9 per cent.

• Private capital is beginning to reach emerging markets. While the vast majority of investments in habitat and water conservation remained concentrated in North America, private finance for sustainable food and fibre production was more evenly dispersed between North America (33 per cent), Latin America (29 per cent), Oceania (19 per cent) and Africa and Asia (about 9 per cent each).

“The findings of this report speak to the growing recognition of our forests, our wetlands, our reefs, and other natural landscapes as smart investments – a notion that would have been unthinkable to most mainstream investors just five years ago,” said Michael Jenkins, Founding President and CEO of Forest Trends.

“Just in the last two years covered by this report, we’ve seen a huge leap in demand for these kinds of tangible ‘real assets’ from investors. The demand is growing across the globe and from across investment instruments – the only thing keeping these emerging asset classes from surging even higher is the scarcity of investable opportunities; and, as in any emerging market, transparent information is critical.”

James Barrett, a spokesman for GWD Forestry, said: “It’s no surprise to see that the amount of private capital invested into forests, wetlands and other green spaces is on the rise. This kind of conservation investing has been a growing trend for some time, as companies and individuals recognise that forestry investment is a smart investment.”

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