The global rate of annual net loss of forest area has declined from 0.18% between 1990–2000 to 0.08% between 2010–2015. Approximately 2.1 billion hectares of forest are now managed under formal plans, with equal distribution between production and conservation. Sustainable forest management aims to balance environmental, social, and economic outcomes.

Deforestation in North America is driven by agriculture, development, and unsustainable timber production, leading to carbon sink loss, ecosystem destruction, and soil erosion. Sustainable forestry presents an opportunity to restore ecological services while maintaining economic viability.

Historically, the United States had around 1.023 billion acres of forest, covering 46% of total land. By 1910, this reduced to 754 million acres. Afforestation efforts in the late 20th century added 12 million acres. Conservation and reforestation are critical for meeting global climate targets, particularly in carbon sequestration.

Forests contribute over $450 billion USD to the global GDP, supporting biodiversity, air and water quality, erosion control, and regional climate regulation. Private sector involvement in conservation is growing, as industrial forestry sees declining returns and markets for ecosystem services, such as carbon and biodiversity credits, become more established.

Investments in sustainable forestry aim to conserve or restore forests while deriving value from sustainable timber harvests, ecosystem services payments, land appreciation, and conservation-related tax incentives. These strategies align financial returns with conservation outcomes.

How the blueprint contributes to conservation goals

The blueprint supports forest conservation and restoration through land acquisition and sustainable management under formal certifications. Investors can measure performance using globally recognised impact metrics, such as those from the IRIS catalogue. Key metrics include land attributes, conservation area, sustainable land management, and ecosystem service benefits.

Biodiversity conservation is a priority, assessed through tools like the Integrated Biodiversity Assessment Tool (IBAT) and the Toolkit for Ecosystem Service Site-Based Assessment (TESSA). Investments should demonstrate measurable reductions in biodiversity threats, such as habitat loss and pollution. A biodiversity return on investment module is under development to quantify the impact.

The business model

Organisation and governance

Sustainable forestry investments operate similarly to private equity funds, but with additional complexity due to conservation requirements. A common model involves purchasing forest land, applying conservation easements, and monetising sustainable timber production and ecosystem services.

Conservation easements legally restrict land use in perpetuity, ensuring long-term protection. These agreements are recorded in land titles and typically cannot be altered. They provide financial incentives, such as tax benefits, while enabling ongoing sustainable land use.

Key stakeholders include:

• Fund managers – Source and manage forest land investments.
• Concessionary lenders – Provide low-cost financing, often through government programs.
• Conservation organisations – Partner on easement purchases and ensure conservation goals.
• Local forestry companies – Conduct sustainable timber harvesting.

Products and revenue streams

The business generates revenue through:

• Land rights sales – Conservation easements provide upfront liquidity and secure long-term conservation.
• Sustainable timber – Managed logging operations maintain economic viability.
• Recreational leasing – Land leasing for hunting or eco-tourism.
• Ecosystem services – Participation in carbon trading markets.

This model provides recurring revenue while aligning with conservation priorities.

The investment model

Financial instruments

Investments are structured as private equity funds, with capital raised from institutional investors. Some funds use blended finance, incorporating concessionary capital or first-loss mechanisms to attract private investment. Debt financing is typically used at the asset level, rather than fund level.

Risk mitigation

Forestry investments carry risks, including environmental damage (fires, pests), regulatory changes, and market fluctuations. Strategies to mitigate these risks include:

• Forest Management Plans (FMPs) – Ensure responsible land stewardship.
• Diversified revenue streams – Timber, land rights, and carbon credits provide multiple income sources.
• Regulatory stability – Conservation easements in the US and Canada provide legal security.

Exit strategy

Most funds operate on a 10–12 year investment cycle, holding land for 6–12 years before divestment. Exit options include sales to conservation organisations, private conservation buyers, or sustainable forestry companies. Conservation easements ensure long-term environmental protection beyond investor ownership.

Replicability and scalability

This model is scalable in North America, where conservation easements and tax incentives exist. It is also replicable in countries with legal frameworks supporting easements, such as Canada, Australia, and parts of Europe and Latin America. Expansion into civil law jurisdictions requires additional regulatory adaptations.