François Siegel, editor of the magazine Wedemain, talks to us about a different kind of finance that proposes to invest its savings in the reforestation of forests, a "friendlier" kind of finance, in a way.
Green finance is a way to invest in ecologically useful projects. By placing your money in a "Tree Book", at Forest Finance for example, your savings will be used to plant trees in Panama, on old forest areas ravaged by intensive livestock farming or impoverished by monoculture.
This idea started when a young German, Harry Assemmacher, at the time in charge of an environmental NGO, decided in 1995 to invest 1,000 euros in three hectares in Panama. In 2005, he decided to turn it into a company that today manages 10,000 hectares of forests in Panama, but also in Colombia, Peru and Vietnam, on behalf of 15,000 clients.
The global demand for wood is such that forests have become a speculative investment. This demand could increase by 70% by 2020, according to the World Bank.
A certified approach
At Forest Finance, we strive to plant mixed forests, with dozens of local species such as mahogany, thorny cedar, amarillo, zapatero... Forest Finance's approach is certified by the Forest Stewardship Council label, created in 1993 to improve soil quality and preserve biodiversity.
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For Harry Assemmacher, Forest Finance is above suspicion, the land sold is forbidden to speculation, and eventually the forests will fall into a foundation. Investors are warned, they will only buy forests. So there's no question of dreaming of building a house there. Finally, 10% of Forest Finance's profits are devoted to improving the living conditions of its 700 employees, through training, access to mutual insurance companies, or microcredit.
Trees are a profitable investment if you are patient and can wait a minimum of ten years. For 360 euros invested, the price of the Livret Arbre, one can hope to make between 1,000 and 4,000 euros in profit. That is to say returns of 4% to 10% per year.
Forest Finance opened a French branch in 2014 and already has a hundred clients! There is still a long way to go to catch up with our neighbours across the Rhine, but what is certain is that the world is becoming aware that the forest is a very profitable investment. In fact, it is in China that the most trees are planted on the planet.
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(Source: France info - July 9, 2014)
Countries most affected by deforestation worldwide (1990-2005 trends) :
1) Honduras: -37%
2) Nigeria: -36%
3) The Philippines: -32%
4) Benin: -31%
5) Ghana: -28%
6) Indonesia: -26%
7) Nepal and North Korea: -25%
9) Ecuador: -22%
10) And finally Haiti: -22%
The data presented comes from the Google Earth layer on deforestation, created by David Tryse, who gets his information from the World Resources Institute and Greenpeace.
Photo: image of deforestation in Brazil