Forestry Investments
In March 2009 Ethical Investments pioneered a unique vehicle to enable ordinary investors to support community focussed forestry enterprise that reduces investment risk and provides consistent returns and improved liquidity. The Cochabamba Project Limited is an industrial and provident society for the benefit of the community and has to date raised over £2m to support a comprehensive and highly accredited programme of land management and social development with poor communities living on the western rime of the Amazon basin.
The society conducts two share offers anually and also offers a loan stock option for investors seeking immediate income.
For further details click on the link to the dedicated website at www.cochabamba.coop
In addition to this option which is aimed firmly at those seeking a social return, we are able to advise on a range of private sales and can assist you in finding an opportunity that best meets your circumstances and requirements.
Forestry investment may appeal to individuals and organisations for a number of financial, environmental and social reasons, which may be considered either independently or as a whole.
| Financial: | Environmental: | Social: |
| Security | Biodiversity | Community development |
| Consistent growth | Carbon Sequestration | Employment |
| Long term appreciation | Environmental Regeneration | Education & Training |
| Portfolio diversity | Amenity Value | Recreation |
| Lack of correlation with stocks/funds | ||
| Tax Planning | ||
| Carbon Credit Value |
We differentiate between UK Forestry and Global Forestry. Please click on the links below to read a summary of each category.
| UK Forestry | Global Forestry |
| Tax planning | Financial Returns |
| Recreation | Potential Carbon Value |
Please contact us with your enquiry
UK Forestry
The first area in which we need to differentiate is between commercial timber production and amenity woodland for recreational use.
The UK environment is not ideal for commercial timber production. We have managed to destroy 95% of our native woodland and land is extremely valuable so that commercial forestry is in general limited to remoter areas, such as the Scottish Highlands and Borders.
Sitka Spruce has become the dominant commercial species for a number of reasons:
- Its ability to grow as a monoculture
- Its ability to grow on poor soils
- Its ability to grow in poor climatic conditions
- Its resistance to disease
- Its versatility as a timber product
- Its rate of growth
Investors should bear in mind that the timber produced from Sitka Spruce is of a relatively poor quality, compared with that from its native forests.
The UK forestry industry is weak in comparison to other counties with greater natural resources - for example Scandinavia, Russia, North America, where softwoods grow much more abundantly.
The UK industry is therefore reliant on its own internal market, which is underpinned by generous tax concessions and grant schemes.
Thankfully, as resources of both wood and the fuel needed to transport it both diminish, the favourable treatment of the domestic forestry industrial is likely to continue and possibly even improve still further as more value is placed on our environment and its preservation.
For individuals and institutions with large sums of capital available direct ownership is not generally a problem. There are a number of experienced forestry management companies who can be engaged to evaluate assets, negotiate the sale and purchase and manage assets on the investor's behalf.
Independent ownership of commercial forestry in the UK is not really financially viable for investment of less than £250,000.
For smaller investors there are significant problems in accessing forestry assets, particularly if financial returns are important.
Ethical Investments assists with providing a number of alternatives for smaller investors, including the establishment and management of Co-Operatives, Limited Liability Partnerships and other special purpose vehicles.
Global Forestry
Climate is naturally the main factor in differentiating between forest categories. Although trees have adapted to grow in colder climates such as Scandinavia and Russia, growth rates are much slower than in more temperate climates. However the vast expanses of land mean that significant economies of scale can be achieved.
Temperate climates are more conducive to human habitation and as a result much of our temperate forests have disappeared through farming and urbanisation.
This leaves the tropical areas, which provide the most favourable climatic conditions for trees to grow.
It is no exaggeration to say that our rainforests are vital to the survival of our planet. Despite this, the destruction of our natural forest continues apace, which means that natural resources of tropical hardwoods such as teak and mahogany are dwindling rapidly. In the last decade or so a new industry in plantation grown tropical hardwoods has emerged, particularly in teak, which adapts well to commercial methods.
Ethical Investments has been researching and evaluating sustainable tropical forestry investment schemes for over 7 years and has established an excellent reputation as a leader in this field.
We are able to offer individual tree grower schemes as well as promoting collective investment opportunities through a network of sympathetic independent financial advisers.
Forestry is not a regulated activity under the Financial Services Act and therefore Ethical Investments is not authorised to give financial advice to individual clients. However we are able to introduce clients to a network of sympathetic and experienced advisers with whom we can discuss your personal requirements.