While the notions of natural capital and nature-based solutions are spreading amongst the investment community, the initial focus has been on a forest’s ability to sequester and store carbon. When it comes to forests as a solution to the biodiversity crisis, very few investors new to forestry investing know what sustainable forest management endeavours to achieve, and why it can indeed be one of the answers to safeguarding biodiversity.
In 2020, the United Nations Food and Agriculture Organisation (FAO) forecast global demand for timber to increase by 37% to 60% between 2020 and 2050, and possibly exceed accessible supply by as soon as 2040.1 Like generations before us, we can continue utilising wood, a key renewable material to the green transition, by sourcing it from responsibly managed forests. So how can a forest be managed sustainably? Sustainable forest management is characterised by several key principles and practices that ensure the long-term health and productivity of forests while balancing environmental, social, and economic values for todays and future generations.
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