25 June 2012: The Food and Agriculture Organization of the UN (FAO), Tropenbos International and Natural Resources Canada, have released a study they commissioned on current investment patterns in forestry. The context for the study is the emerging question of how to broaden and diversify the financial basis for sustainable forest management (SFM).

The study assesses the involvement of institutional investors in forestry, including REDD+ (reducing emissions from deforestation and forest degradation in developing countries, and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks) and biodiversity, in emerging markets.

The study, authored by Reinhold Glauner, James Rinehart and Peter D’Anieri, aims to reveal barriers and opportunities to investments in timber production assets in developing countries. It surveys 42 investment decision makers in North America and Europe, collectively representing US$36 billion in forestry investments. The study finds that investors: invest in forestry as a means of diversification and inflation hedging; seek forest investments that can be certified as sustainably managed; and do not invest in forest-based business such as processing and manufacturing. The study also highlights the importance of investment policies and conditions at the country level to attract investment capital.

The authors note that the growing recognition of forests’ contribution to economic growth, social development and environmental health is motivating public and private sectors to increase their investments in SFM.

The publication is part of the Forestry Policy and Institutions Working Paper series of the FAO. [Publication: Timberland in Institutional Investment Portfolios: Can Significant Investment Reach Emerging Markets?]