Forest Investor Club: investing in nature on the way to net zero

investment viewpoints

Forest Investor Club: investing in nature on the way to net zero

Forests are prominent on the COP26 agenda for a good reason: this natural resource can provide 30% of the emission-reductions needed by 2030, but receive only 3% of climate finance.

Deforestation, ecosystems conversion and other land-sector activities not only reinforce climate change but also undermine the biodiversity vital to human health and economic prosperity. Action is essential, but lack of capital is not the problem: financial institutions have struggled to bridge the annual biodiversity funding gap of up to US$250 billion, estimated by the AFD, due to the difficulty of identifying viable investments.

Limited internal capacity to understand climate and nature-aligned finance, and a lack of access to like-minded partners, has also held back progress.

 

Clubbing together

This is why Lombard Odier is proud to join the Forest Investor Club (FIC), launched at COP26 by the U.S. Department of State. The FIC is a network of public and private financial institutions and other investors that aim to increase the scale, pace and scope of forest and nature-related financing.

The FIC seeks to enable access to a pipeline of investments in these fields, connecting the network with complementary partnerships and solving investment bottlenecks. Investments will span nature restoration and conservation, sustainable agriculture and forestry, as well as green infrastructure.

They will have two goals: to reduce carbon emissions and support biodiversity. Examples include: investing in sustainable forestry operators or processing sites for non-timber products, green bonds or other securities or investment vehicles focused on forests or nature.

The FIC network includes commercial banks, asset managers and owners, institutional investors, development-finance institutions, and multi-lateral and national-development banks.

Joining the FIC is a natural move for Lombard Odier. As a founding member of the Circular Bioeconomy Alliance and the Natural Capital Investment Alliance, among other nature and climate-focused initiatives, we believe that increasing investment in natural capital and the net-zero transition requires simpler access to a greater number of clearly visible opportunities.

Read about our natural capital strategy here.

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