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. 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. These characteristics include, but are not limited to:
Mosaic landscape
Sustainable forest management means that you have different ecosystems within an asset. Indeed, depending on geography and asset specificities, up to 30% of a property is made of set aside areas where native trees and bushes of different species grow freely, inter-meeting the productive forest, often composed of one or two main commercial species. Furthermore, you will have mixed age classes, meaning you will find trees of different ages at all times on a specific estate.
Encouraging a mix of tree species and age classes enhances ecosystem resilience against pests, diseases, and natural disasters, helping forests to recover and adapt.
Controlled harvesting
Extensive clear-cutting is simply not allowed under sustainable forest management practices and the size of the areas to be harvested are regulated.
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