According to organizations such as WWF, the Global Canopy Programme and the Climate Bonds Initiative, the creation of a greater number of forestry bonds, which would drive investment into the forestry sector, will help reduce climate change. They claim that $30 billion of investment each year will help to halve deforestation and safeguard the carbon absorption capabilities of the world's forested land.
Climate Bonds Initiative chairman, Sean Kidney, told BusinessGreen that providing the bonds offered have the potential to generate healthy returns, investors will flock to them: "If you offer investors an AA-rated forest bond or an AA-rated oil bond, most of them will take the green option. You have to remember that 19 of the 20 largest pension funds are public sector funds and they're concerned about climate," he said.
AAA is an analysis and advocacy group that backs alternative investments of all kinds, with a focus on ethical and environmentally sound options. It claims there are already several successful investment opportunities that drive cash towards forestry and increase the amount of forested land in their areas of operation.
Greenwood Management, for example, invites investors to buy up areas of land in Brazil that are planted with non-native trees for eventual use as charcoal in the local steel industry and for export. AAA claims that these kinds of projects help the Brazilian government to impose legislation that outlaws the logging of native trees.
The campaigners are calling for focus to be put on the creation of forestry bonds during the meeting of climate negotiators scheduled for the Durban climate talks in November. AAA’s analysis partner Anthony Johnson spoke out in support of the campaigners, saying, “Forestry bonds make perfect sense, particularly in the current economic climate where investors are desperately searching for alternative asset classes to diversity their investment portfolios.”
About Alternative Asset Analysis:
The remit of Alternative Asset Analysis is to analyse and provide news on the global performance of a wide range of alternative asset classes including, but not restricted to, commodities, real estate, forestry, foreign exchange, hedge funds, private equity and venture capital.
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