Investment in sustainable landscapes: Time to take the risk
BOGOR, Indonesia: If a tree falls in the rain forest, do investors care if it really fell ….or was it chopped?
More investors than ever before do care about how and why a tree hits the forest floor. And for public and private investment sectors, there are sophisticated ways of channeling funds to sustainable landscapes, through projects such as verified farming, forestry or mining ventures that avoid deforestation and respect local communities’ rights.
Investments like these in tropical landscapes, are often exposed to higher risk, for example by money being spread over countless smallholder farmers in remote areas, or working in countries with poor governance records.
Projects may also be interrupted due to local resistance or by failing to make a profit.
Some financial institutions have designed structured funds in which government-backed agencies from donor countries take equity shares bearing the first loss in case of poor performance.
Read the full article: Forests News