One of the major challenges for global forests is how to create a healthy financial basis for sustainable forest management, that preserves the natural basis but also constitutes a competitive activity, one that is attractive for investment and entrepreneurship. This requires extensive financial resources to be mobilised, both to create the preconditions for a good investment climate and for direct investment in effective forest management. The greater part of that direct investment will need to come from private sources.
In recent years, various financial institutions – banks, private investors, pension funds, insurance companies – in the Netherlands and elsewhere have already invested in forests and/or have shown an interest in exploring the possibilities further. In recent years, cautious consideration has also been given to the possibilities in the tropical world and emerging economies. Investment in forests in tropical countries is still largely an unknown and unexplored area, where opportunities are recognized but also the numerous risks involved. To a large extent, the relevant knowledge and expertise in financial institutions is lacking. The tropical forest world and the financial world do not yet find each other easily and it is also unclear to both of them what they can offer one another.
The intention of the present exploratory study is to clarify and understand this situation from the Dutch perspective. It is an initial exploration intended to provide insight in the current involvement of Dutch financial institutions with forests and to initiate a dialogue between financing and forest sectors about the opportunities and needs for responsible Dutch investment in forests.
This exploratory study – based on interviews with 13 institutions - concludes that more exchange of knowledge and expertise between the financial sector and the forestry sector is desirable, if the intention is to increase the scale of responsible investment in forests. Considerations for a joint approach include the practical and specific development of the financial institutions’ sustainability policy regarding investing in forests, pooling the necessary expertise and knowledge as base for doing so, and developing more “bankable business cases” for forests. A proposal for setting up a clearing house facility can count on wide interest. Amongst other things, a clearing house would need to ensure that forestry experts, projects/business cases, financiers, and intermediaries can more easily engage with one another.
The study was carried out by Tropenbos International at the request of the Dutch Ministry of Economic Affairs. This is the translation of the publication: "Nederlandse Financiële Instellingen en Bosbouw. Betrokkenheid, ervaringen en perspectieven. Een verkenning".