Willow Rivers Wealth Responsible Investments Blog

Although you may not be aware, all the World’s largest corporations are rapidly purchasing as much-endangered rainforest as possible. Why would they do this you ask? To which the simple answer is that they are all highly undervalued and so a very good investment!

All multi-national corporations have enormous global carbon footprints, and only in the coming years will this officially become a financial burden to them as global governments slowly enforce various methods of what is effectively an emissions tax. As the underlying unit of CO2 emissions is the carbon credit, and rainforests are the largest organic owner of carbon credits, the investment decision is an easy one.

With deforestation the root cause of around 20% of global carbon dioxide pollution, “reduction of emissions from deforestation and degradation” (REDD) projects should be accepted by the UNFCCC this December in Copenhagen. Once this occurs, implemented REDD projects will have carbon credit values within the Kyoto Treaty’s “Clean Development Mechanism” giving them enormous inherent financial value. Rather than wait for this decision most MNC’s have made their minds up, taken the bull by the horns, and are buying their stock at “pre-launch prices”. The Rainforest Rush is on!

As scientists worldwide perfect their analysis techniques including using satellite technologies, the carbon stock already stored and the sequestration rates of forests are being calculated and rainforests evaluated. It isn’t every forest of course. Only those that are officially endangered by a high risk of deforestation, in countries such as Brazil, Indonesia and Papua New Guinea, will pass the rigorous REDD standards.

Whilst giving financial weighting to forests is undoubtedly a crucial move desperately needed, many worry that it must be handled extremely carefully. Greenpeace senior climate advisor, Charlie Kronick, worries that protecting forest might provide a “get out of jail free card” allowing them to simply purchase vast tracts of rainforest and do nothing to reduce their emissions. As analysts believe that around 65% of emissions reductions need to be made within the industrialised polluting countries, Willow Rivers hope that the World’s governments permit MNC’s to offset only a certain %age of their emissions with rainforest credits.

All will be revealed in the next few months.

Tags: Carbon Offsetting, Copenhagen, environmental, Forestry