Investment Experiences In Tropical Forestry: Opportunites and Constraints

Global Forestry Services Inter-Alliance International

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INVESTMENTS INVESTMENTS EXPERIENCES IN EXPERIENCES IN

TROPICAL FORESTRY: TROPICAL FORESTRY: OPPORTUNITIES AND OPPORTUNITIES AND

CONSTRAINTS CONSTRAINTS

Presented by: Presented by:

Rico Dent, Inter-Alliance InternationalRico Dent, Inter-Alliance International

Michael V. Galante, Global Forestry ServicesMichael V. Galante, Global Forestry Services

22 Global Forestry Services Inter-Alliance International

Presentation OutlinePresentation OutlineWe intend to answer two fundamental We intend to answer two fundamental

questions related to investments in questions related to investments in forestry; namely: forestry; namely:

Q1-What is SFM and how does good Q1-What is SFM and how does good forest management mitigate forest management mitigate investment risk? investment risk?

Q2-What are the potential revenue Q2-What are the potential revenue streams from investments in SFM streams from investments in SFM and what is the best investment and what is the best investment vehicle to attract retail and/or vehicle to attract retail and/or institutional investors?institutional investors?


Sustainable Forest ManagementSustainable Forest Management

What is Sustainable Forest What is Sustainable Forest Management (SFM)? Management (SFM)?

The stewardship and use of The stewardship and use of forests in which to maintain forests in which to maintain their ecosystem function their ecosystem function (including ecosystem services-(including ecosystem services-air, water & biodiversity) and air, water & biodiversity) and productivity for use today and productivity for use today and tomorrows generation. tomorrows generation.



There are three Pillars to Sustainable There are three Pillars to Sustainable Forest Management: Forest Management:

Environmental Sustainability; Environmental Sustainability;

Sociological Sustainability; Sociological Sustainability;

Financial Stability. Financial Stability.



Can Good Forest Management Mitigate Can Good Forest Management Mitigate Investment Risk? Investment Risk?

Proper management planning includes: Proper management planning includes: Roads & infrastructure;Roads & infrastructure; Environmental Attributes & Conservation Environmental Attributes & Conservation

Areas;Areas; Social issues; Social issues; Harvest plans, trails & schedules;Harvest plans, trails & schedules; Planned rate of extraction and sustained Planned rate of extraction and sustained

yield.yield.

Good Forest Management works Good Forest Management works with with indigenous communities and includes them indigenous communities and includes them into operations; into operations;

There is a transfer of knowledge to these There is a transfer of knowledge to these communities which brings them into the communities which brings them into the management of operations. management of operations.


Sustainable Forest Management Sustainable Forest Management contcont

Can Good Forest Management Mitigate Can Good Forest Management Mitigate Investment Risk? Investment Risk?

Objectively analyzes and quantifies Objectively analyzes and quantifies operations to determine the best plan of operations to determine the best plan of action; action;

Reduces potential risk areas in the Reduces potential risk areas in the operations; operations;

Mitigates risk of fire;Mitigates risk of fire; Mitigates risk of pest/disease; Mitigates risk of pest/disease; Forest Certification is an essential part Forest Certification is an essential part

of SFM; of SFM; Certification looks at the operations in Certification looks at the operations in

its entirety which mitigates risk of its entirety which mitigates risk of failure. failure.


Investment Trends in ForestryInvestment Trends in Forestry

Rico add hereRico add here

I recommend the following titles for the next I recommend the following titles for the next slidesslides

Investment Trends to ForestryInvestment Trends to Forestry current investment trends in natural resource current investment trends in natural resource

Investment vehicles and modelsInvestment vehicles and modelsWhat are they, how they workWhat are they, how they workFunds, Bonds, Loans, others?? Funds, Bonds, Loans, others??

Who is Investing in Forestry? Who is Investing in Forestry? i.e retail & institutionali.e retail & institutionalJohn Hancock, Investment Funds, HSBC, etc…John Hancock, Investment Funds, HSBC, etc…

A Way ForwardA Way ForwardFuture considerations Future considerations Where, when, how to start? Where, when, how to start?


Potential Revenue Streams from Potential Revenue Streams from ForestryForestry

Clean AirClean Air through plant respiration through plant respiration (Carbon Sequestration);(Carbon Sequestration);

Clean WaterClean Water through the natural through the natural watershed capacities of forests;watershed capacities of forests;

BiodiversityBiodiversity services services to support diverse to support diverse plant, animal and microorganism plant, animal and microorganism populations of economic, populations of economic, subsistence or cultural valuesubsistence or cultural value

EcotourismEcotourismRenewal Harvesting of Forestry Renewal Harvesting of Forestry

ProductsProducts


Potential Revenue Streams from Potential Revenue Streams from ForestryForestry

Other reasons to invest in sustainable Other reasons to invest in sustainable forestry practices: forestry practices:

Corporate Social Responsibility Corporate Social Responsibility (CSR)(CSR) is now becoming a main is now becoming a main concern with major investors concern with major investors worldwide;worldwide;

““Green” Marketing Green” Marketing is becoming is becoming increasingly important for most increasingly important for most businesses; businesses;

Climate Change Climate Change mitigation is a natural mitigation is a natural process of trees and forests which process of trees and forests which can reduce your company’s “carbon can reduce your company’s “carbon footprint”. footprint”.


Suitable Investment VehiclesSuitable Investment Vehicles

Unit Trust/Mutual FundUnit Trust/Mutual Fund

OEIC (Open-Ended OEIC (Open-Ended Investment CompanyInvestment Company

These 2 Investment Structures allow These 2 Investment Structures allow institutions and individuals to invest in institutions and individuals to invest in the forestry sector whilst also allowing the forestry sector whilst also allowing them a suitable exit strategythem a suitable exit strategy

It will allow Forestry Projects access to It will allow Forestry Projects access to alternative sources of funding alternative sources of funding

Investment Experiences In Tropical Forestry: Opportunites and Constraints

Economy & Finance

Transcript of Investment Experiences In Tropical Forestry: Opportunites and Constraints