Planting Trees Isn’t Just the Right Thing to Do, It’s Profitable for Business
New research shows that businesses are making money from planting trees and growing sales as rapidly as 10 times per year.
Arlington, Va. USA | January 18, 2018
A new report launched today by The Nature Conservancy (TNC) and World Resources Institute (WRI) finds that restoring degraded land is not only good for the planet, it’s also a good investment opportunity as well. Through the analysis of 140 restoration-focused businesses in eight countries and four continents, The Business of Planting Trees
shows that the economic benefits of restoring land are estimated at $84 billion per year
and deliver a range of financial returns
This new emerging “restoration economy” represents a wide range of business models and not only brings economic and financial benefits, but also co-benefits including clean water, sustainable agriculture and functioning ecosystems. Reforestation also provides the single largest potential for storing carbon
of any land-based natural climate solution. However, there is still a $300 billion shortfall
in funding for restoration needed to achieve these outcomes at scale.
The report highlights four promising investment themes - technology, consumer products, project management and commercial forestry and explores how for-profit companies and impact investors can begin to close the financial gap while also turning a profit.
“If we are to be serious about climate change, we have to get serious about investing in nature,” said Justin Adams, Managing Director Global lands
for The Nature Conservancy. “The way we manage lands in the future could cost effectively deliver over a third of greenhouse gas emissions reductions required to prevent dangerous levels of global warming.”
The report authors selected 14 commercial businesses that have restoration at the core of their customer value proposition to highlight the breadth and depth of the restoration economy. Companies ranged from those with over $50 million in sales, to fewer than 10 employees, startups and mature land management organizations in operation for over 40 years. Each business had to meet five specific criteria:
• Profitable: Does the enterprise make money today (or is on track to do so in the future)?
• Scalable: Does the company have the potential to become much bigger than it is today?
• Replicable: Can this concept be replicated in other regions by other businesses?
• Environmental impact: Does the enterprise result in degraded lands being restored?
• Social impact: Does the company have a positive impact on people?
The report found that that investors would like to invest in land restoration, but were unsure of the financial landscape. Commercial investment of restoration has been limited to date, due to lacking proof of concept in new business models, the small deal sizes and future long-term planning of five or more years. The research indicates that business model development has advanced substantially, and rapid growth indicates investment sums may also rise. By presenting real world examples of companies that generate revenues from restoration, investors and entrepreneurs can gain insight into what business models exists, operational setups and how to avoid the early pitfalls. The report authors strongly recommend investors perform their own due diligence.
Political commitments like the Paris Climate Accord, the Bonn Challenge and the New York Declaration on Forests present a major opportunity for investment in restoration as countries seek to engage the private sector to help meet their commitments. The report authors hope that this report serves as a starting point for investors to understand the growth opportunity that exists within the restoration economy.
FOR MORE INFORMATION:
The Business of Planting Trees Report, Executive Summary, as well as other digital assets can be found at global.nature.org
The Nature Conservancy is a global conservation organization dedicated to conserving the lands and waters on which all life depends. Guided by science, we create innovative, on-the-ground solutions to our world's toughest challenges so that nature and people can thrive together. We are tackling climate change, conserving lands, waters and oceans at an unprecedented scale, providing food and water sustainably and helping make cities more sustainable. Working in 72 countries, we use a collaborative approach that engages local communities, governments, the private sector, and other partners. To learn more, visit www.nature.org or follow @nature_press on Twitter.