About Forestbase
At Forestbase, we are on a mission to protect àll primary rainforests globally. Deforestation is a land use crisis driven by financial incentive. Nature is inherently connected to land. There is a price on land everywhere. That means that nature is present in the financial system, but only with one leg. Forests are being sold for their value in land, with the pristine nature on top valued at zero. This means that the price tag on nature is way too low. For every hectare there is a business case competition: conservation vs agro vs timber vs other. Conservation almost never wins. Second, it is normal for forests to be locked up in land titles as big as 100 000 hectares, which is hard to acquire. There is no global anchor price point for forest today and the dormant demand in the market cannot realize their interest. It is normal for local land owners to sell their holdings for as low as €25/hectare.
Forestbase is a precedent case builder with the ambition to show the world the true financial value of nature. We acquire primary forests, always bigger than 10 000 hectares, we protect them and bring them to market as natural infrastructure assets in a stabilized legal-financial format. By unlocking financial market dynamics, we believe we can reach a much higher price point for forests than we see today. Our financial models, commissioned externally, show that this price point can go beyond €10 000/ha, which is in strong contrast with today’s €25/ha.
Who is involved?
- Primary nature: the business case for conservation on the ground becomes financially more interesting and is therefore more resistant against competition for agro and timber.
- Local People: tens of millions of small agro-families globally own dormant wealth in the form of primary nature. Unlocking this wealth financially empowers them.
- Entire countries: many countries own dormant wealth in the form of primary nature. Unlocking this wealth financially empowers them in the global financial scene. Several countries put €0 on nature today in their national accounting. Putting a number there in the vicinity of €10 000/ha can unlock billions, which will come with a renewed appreciation for their nature.
Contribution to the objective
- Financing the green: integrating biodiversity-supportive projects and initiatives in their investment portfolios. Financing green and biodiversity-friendly activities is essential to support biodiversity and represents an asset for building more resilient economy after the COVID-19 crisis. The finance sector plays a specific role by encouraging both public and private investments into a certain direction as they look to reduce risks for their investments. Many environmental as well as socio-economic studies highlight the risk to the finance sector if they do not take more pro-active action on greening their portfolio and the sector thus has a real interest to take an active part in changing its direction.
- By making land tenure a much more stable component and by bringing forest land itself an investable and tradable asset, Forestbase introduces nature in the financial category of infrastructure assets. The presence of nature in this category makes for a foundational layer for the entire offset market to derive more credibility and more legitimacy.
- We have designed our setup in such a way that it is financially attractive to invest in nature, also for those who don’t care about nature. That way, we can mobilise a maximal amount of financial resources to conservation.
- Greening the finance: ensuring that the finance itself is green and biodiversity-friendly is also a significant way to support biodiversity, if not more effective. It enables indeed to mainstream biodiversity in finance, as it is currently done for climate in several central and supranational banks.
- We bring biodiversity directly to financial markets. We unlock large tropical rainforests that typically have a legal-financial format that is undesirable and compliance-wise impossible for financial institutions to work with. By doing so, we protect forests that are otherwise threatened to be sold for other purposes than conservation.
How are the criteria met?
- Developing and promoting eco-friendly alternative finance tools in support of biodiversity (eg. reduced mortgage, loans encouraging companies’ transition, investment products directed towards green investments…)
We enable investors directly to invest in primary forests as an infrastructure asset with - Financing biodiversity-friendly projects and initiatives (from private sector and all relevant actors)
We finance entire projects as part of the forest we acquire from the private market.
We try to acquire high-risk forests on which timber and agro parties can make a bid - Financing green to boost biodiversity: investing in wildlife conservation, restoration, nature-based Solutions, agroecology, green cities, sustainable forest management and protection
Our focus is entirely conservation of entire ecosystems, which is why we acquire forests that are always bigger than 10 000 hectares - Showing traceability/transparency of investments
Our projects will be tracked with technology (drone flights, satellite imagery, bodycams and acoustic devices)But we will also track the socio-economic evolution in the surroundings of the forests that we acquire since we consider the wellbeing of communities a key conservation asset. - Requesting partners and customers to have a transparent strategy supporting biodiversity
We request our partners to confirm that we are only having conversations in a context of respect towards the mitigation ladder and that they only offset what they cannot reasonable solve internally. - Requesting partners and customers to commit to respect biodiversity standards
By design, an investment into Forestbase is commiting to our biodiversity standards and comes with learnings for the company to improve - Biodiversity and climate change financing convergence
We work at the hearth of deforestation and we consider pristine forests as planetary infrastructure. By doing so, the effect of what we do has positive impact on all 38 ecosystem services (carbon, biodiversity, water, pollination, erosion, soil quality, water-weather cycle,..). All of these contribute to the climate and by prioritizing on primary forests, we are working with forests that have a higher degree of resilience to climate change than reforested areas. We believe that rich ecosystems are still the most important answer to climate change, before any other solution. - Enhancing effectiveness and efficiency of resource use: development of dedicated envelope
By increasing the value of primary forests, we reduce the global available hectares for agro land, since many parties will start considering the conservation case as better than agro when we reach a tipping point. By doing so, the remaining agro land will be incentivized to yield more efficiently. - Aligning portfolios with international/EU/national biodiversity objectives
In our case it is not just about aligning, but even provoking for better standards. Our own company aims to be an industry game changer in biodiversity protection, valuation and financial representation.
We are a solution for funds that want to align their objectives with global biodiversity protection. - Associating marketing of certain products to ESG/sustainable/biodiversity standards
By setting a more precise standard, we want to make the term ‘Natural Capital’ more strict in use.
Benefits
Higher financial value on nature reduces pressure to deforest
Given that deforestation is predominantly driven by financial incentive, unlocking a higher price per hectare of forest land is the key to re-designing the economic incentive that drives the deforestation economy. We will bring these forests to public markets so that we can reach the first ever market-made and globally visible price anchor point for tropical forest.
Making conservation financially the most interesting business case on the ground for every hectare is our core long term mission. For our own forests we aim at democratic ownership via stock exchange listings, and by building 20-30 big precedent cases, we believe we can significantly influence the price setting on primary forest lands globally. We want to provoke governments to copy our model.
We are a disruptive unit economics company in the field of conservation finance. The one number we are after in the long run, is the global price/hectare of tropical forests. If we can get it high enough, we’ll nature being treated as wealth and therefore protected much better by whomever owns it.
Unlocking value of nature, unlocks wealth for the owner of it (families, governments)
By bringing intrinsic value closer to real market price, we intend to unlock wealth for tens of millions of families and even entire countries in the tropical belt who own pristine forests today. This empowers them financially and removes the oxygen from the deforestation economy.
Healthier and more effective offset market dynamics
Having nature itself present in the financial markets in a standardized way is the key component for healthy offset markets. To succeed in our mission, we apply an exceptional focus on land tenure, since we believe this is the main weakness in today’s offset markets. We will only see healthy market dynamics if both asset (forest land) and it’s product (ecosystem services) are publicly trading. The offset markets will only succeed in their mission if they realize a higher price/hectare for forests on the ground, which they don’t today.
For more information about the project, please visit the website: https://www.forestbase.io/
