FORESTLANDS
THE ULTIMATE ESG INVESTMENT BY TROY DANA
FAY RANCHES BROKER
E
SG (environmental, social, and governance) is a general term used in capital markets and by investors to evaluate corporate behavior to determine the future financial performance/benefit of investing in new companies and innovations. ESG is the new standard by which corporations, nonprofits, and start-ups stand out in the crowd, whether competing for capital or market share. A closer look at forestlands as an ESG investment will show that forestlands check all the boxes. Tree farm certification, forest practice rules, and habitat conservation plans are a few of the voluntary and regulatory management protocols designed to improve the landscape aesthetic, forest health, and ecosystem functionality. All of these are ESG centric. Forestlands provide more than economic returns; they provide unforgettable sights, sounds, and sensory experiences that start when one steps among the trees and takes in that first deep breath of the distinctive woodland bouquet. Forestlands do far more than grow trees; they strengthen our connection with nature. An encounter with a 900-pound bull elk bugling on a brisk early autumn morning is enhanced by the pungent, pleasant aromatic of pine sap warming in the reddish-brown ponderosa pine bark ubiquitous on the eastern side of the Cascades. The cathartic sound of bone-chillingly cold water pumping from crystal clear springs into meandering streams or the experience of foraging the forest floor on an early October day for Chanterelles prized by culinary snobs and old-timers leave an imprint on the soul. Forestlands offer unique and tangible experiences no other ESG investment can provide. The experiences alone make the investment worthy of consideration, but set those aside for a moment and consider how much forestlands do for our ecosystem, our economy, and our quality of life. CARBON SINK – Leading up to Covid-19, C02e, or Greenhouse Gas dominated headlines and was considered humanity’s existential threat by politicians, scientists, and the media alike.
14 | WWW.REPUBLICRANCHES.COM | 888-726-2481
The images of the polar ice caps melting, unprecedented weather extremes and climate change alarms due to increased levels of Co2e in the atmosphere all confirm climate change is a reality. One positive thing coming from Covid-19 is that it has demonstrated that reduced Co2e emissions do improve air quality and slow the greenhouse effect. Capturing carbon from burning less fossil fuel can also help improve air quality and slow climate change. Forestlands are massive carbon sinks due to their ability to absorb carbon dioxide from the atmosphere. A Douglas Fir tree planted 20 years ago is one of the most efficient carbon sequestration and oxygen emitting life forms on the planet. Sequestered carbon can represent as much 28,000 pounds in a 100-year-old Douglas fir or approximately 50% of the biomass weight. The oxygen produced by photosynthesis can range from 260 – 500 pounds per year, depending on tree size. Carbon sequestration and scrubbing technologies are abundant but not yet costeffective. By contrast, forestlands do this work and so much more. Carbon sequestration in biomass has also created a demand for carbon offsets. Now, these markets are emerging throughout the US as more and more Fortune 500 companies are proactively investing in forestlands for carbon credits. COOL WATER – There is nothing like walking out of the direct sun on a hot summer day into a small wooded area fully shaded by tall trees to a 10-15 degree drop in temperature. Even small forests can provide a cooler microclimate, shade, and habitat beneath the forest canopy. This shade offers benefits beyond a cooler place in the forest for the many animals that roam the forest and the plants that call it home. The shade and cooler air contribute significantly to keeping surface waters cooler as they meander downstream to ever bigger streams and rivers and eventually back to the ocean. Direct sunlight on the surface water creates a warming
