Investment approach

The case for forestry investment hinges on the new phase in human history that is placing renewed value on trees and forests. For centuries, the world’s forests were treated as an inexhaustible resource. Trees were cut down in the name of progress and growth.

The practice and profession of forestry began to emerge over just the last three to four hundred years – as forests became scarcer, and timber and fuel became limiting factors. Forestry management seeks to maximize productivity, to protect forested land for future generations, and to plant new forests on land cleared long ago.

As the consequences of burning fossil fuels have become clear, the world’s forests are back in the spotlight. More and more, in this newest phase of human history, society understands the critical value of trees and forests.

Timber from forests can be used as a low-emission, low-energy building product, substituting for steel, cement, and aluminum; as renewable heating fuel; and as a potential feedstock for everything from fabrics to liquid fuels and bio-plastics. Timber from forests has many important uses in a more sustainable future.

Plantation forests also offer the most credible and most immediate solution to reducing atmospheric carbon at the lowest cost. For the next few decades – and likely much longer – the only viable paths to ‘net zero’ demand a large role for carbon sequestration in trees. It is imperative to grow existing trees larger and older and to plant new forests on available and suitable land.

Regulated and voluntary carbon markets provide the additional economic incentive to fully embed such a transition. Combined with the robust expected demand for timber and other wood products, increased interest in carbon creates strong opportunities for investment in forests. For investors who need carbon offsets or insets, Folium can tailor bespoke portfolios that offer concentrated carbon yields.