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In this episode of YourForest, Matthew Kristoff sits down with Shauna Matcovich to discuss the future of forest investment and finance. This conversation explores the critical link between the intrinsic values of a forest - such as biodiversity and ecosystem health - and the monetary value needed to drive sustainable management. Shauna argues for a shift in mindset, moving away from a sole focus on timber to embrace the broader economic opportunities of a forest. The episode highlights how private capital and free market principles can be powerful levers for conservation and positive change, provided the right governance structures are in place.
Shauna Matcovich is a forester and sustainability expert with over 15 years of experience in cross-continental sustainable forest management. She is the Founding Director of The ForestLink, a consultancy that helps investors mobilize funding for profitable and impactful forest businesses. With a background in forestry from the University of British Columbia and a double Master of Science in Tropical Forest Management and Agricultural Development, Shauna has worked in diverse environments, from Canada and New Zealand to tropical regions in the Amazon. She is also the host of the "Forest Invest Podcast," where she shares expert insights on the intersection of finance and forestry.
Key Takeaways:
Connecting Intrinsic Value to Monetary Value: Learn why it is essential to link the existential values of forests, like biodiversity and climate services, to a monetary value to drive investment and create a sustainable forest economy.
The Power of Private Capital: Discover how institutional investors, pension funds, and other private capital can be a significant force for good in financing sustainable forestry projects where traditional government-based regulation may not be sufficient.
Beyond Timber: Understand the shift from traditional timberland investment to a more holistic approach that considers the full value of the forest, including carbon markets, biodiversity credits, and other ecosystem services.
Creative Destruction and New Partnerships: Explore the need to challenge outdated practices and build new, innovative partnerships between industry, finance, and conservation to unlock the full potential of forests.
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Notable Quotes:
[00:00:04] Shauna Matcovich: "We live in a society where a monetary economy is how the world runs. So we need to have a link between these, again, intrinsic existential values that's tied to a monetary value."
[00:15:48] Matthew Kristoff: "I think there's so much fear around imperfection that we're holding ourselves back, but we just need to start. We just need to take a step, whether it's perfect or not, just take a step.”
Takeaways with Timestamps:
[00:00:00] Introduction to Forest Finance: Matthew and Shauna introduce the topic of forest finance and the necessity of linking a forest's intrinsic value to a monetary one.
[00:06:28] Shauna’s Background: Shauna shares her journey from a traditional forester to a specialist in global forest investment, highlighting her cross-continental experience.
[00:15:58] Moving Past the Fear of Imperfection: Matthew and Shauna discuss the need to overcome the fear of making mistakes in order to take practical action toward sustainable change.
[00:17:32] The Role of Free Markets: Shauna explains how allowing free market principles to operate can incentivize positive outcomes for forests, provided there is a proper governance framework.
[00:21:10] Involving Private Capital: Shauna discusses the immense potential of private capital, including institutional investors and pension funds, to fund conservation and sustainable forest management.
[00:25:17] The Emergence of Carbon and Biodiversity Credits: The discussion highlights the growing importance of new markets, like carbon credits and biodiversity credits, in creating financial value for ecosystem services.
[00:29:40] Risk Management in Forest Investment: Shauna breaks down the different types of risks in forest investment and explains how they can be mitigated.
[00:41:37] The Bioeconomy and Innovation: The conversation explores the bioeconomy and the potential for new technologies to add value to forests beyond traditional timber products.
[00:46:45] Reimagining Value and Partnerships: Shauna emphasizes the need to change the value system and build new partnerships to create additional value streams from forests
[00:54:02] Conclusion: Future Opportunities: Matthew and Shauna wrap up the conversation by reiterating the huge potential for growth and positive change in the forest finance space
ARTICLE
Why Should Institutions Care About Forest Investment?
Forests play a critical role in our lives. They provide clean air, store carbon, support wildlife, and offer space for people. Yet many of these benefits are taken for granted because they carry no direct price. When something has no value in the market, it often receives less care.
This raises an important question: how do we make sure forests are protected in a world where most decisions are driven by money? One answer lies in forest investment, a way to connect finance with the health of forests.
Shauna Matkovich has spent more than 15 years working on this challenge. She is a forester and sustainability expert with experience across continents, from Canada and New Zealand to the Amazon.
She is the founding director of ForestLink, an organization that combines forest management, finance, and business. She helps investors, governments, and communities see how financial capital can support biodiversity, carbon storage, and stronger ecosystems through this work.
Shauna also hosts The ForestLink podcast, where she speaks with global leaders about forest investment, carbon markets, and new approaches to sustainability.
Her background combines field forestry, academic research, and more than a decade of managing tropical forest funds for institutional investors.
In this article, we will look at why putting a price on forests matters, how forest investment works, and what makes it different from other forms of finance.
We will also explore the roles of philanthropy, impact investors, and Indigenous leadership in shaping a future where forests can provide economic and ecological value.
Why Put a Price on Forest Investment?
Forests give us more than timber. They clean the air, store carbon, shelter wildlife, and offer places for people. The problem is that many of these benefits are free.
Because no one pays for them, they often get ignored. Without a clear value, protecting and caring for them becomes harder.
Photo by Luca Bravo on Unsplash
The Case for Market Value in Forest Investment
Putting a price on forests is not about reducing them to money. It is about making sure people pay attention. Since most decisions already run on money, giving forests a financial value brings them into daily choices.
Some forest benefits are easier to measure than others:
Timber and non-timber products: Easy to price.
Recreation: This can be measured by fees or visits.
Carbon storage: Counted and traded in markets.
Biodiversity: Hard to measure but vital for survival.
Balancing Idealism and Reality
Of course, it would be ideal if people valued forests for their own sake. Yet in reality, money drives change faster. Investors can step in where weak rules fail by linking profit with healthy forests. This way, even in countries with little oversight, forests still get managed with care.
Taking Imperfect Steps Forward
Some people fear that tying nature to money is wrong. But doing nothing often means forests disappear. Progress works in steps. We try, we learn, and we adjust. Like caring for trees, it is about patience and steady effort.
Building a New System
Different groups want different results. Governments and donors may seek conservation. Investors may look for returns. Communities may need long-term security.
By matching the right funding with the right goals, forests can provide more than timber. They can support wildlife, restore balance, and serve people for generations.
How Does Forest Investment Work?
Forest investment is not like buying a simple mutual fund. Most opportunities are designed for large institutions that can manage money for decades. Private individuals have few choices besides small retail schemes that play a minor role.
Photo by Camila Cordeiro on Unsplash
Traditional Timberland Investment
The modern idea of forest investment began in the 1980s with Timberland investment. At that time, sawmill companies sold large forest areas. Pension funds, insurance firms, and other institutions bought them because forests offered long-term stability.
Key reasons institutions invest in forests include:
Steady returns over long periods.
Protection against inflation.
Growth in value as trees mature.
Flexibility to wait for better prices before harvesting.
Timberland usually takes up only about 1% of an investment portfolio. It sits in the same group as real estate or infrastructure.
Expanding Beyond Timber in Forest Investment
Over the years, investors have started to look past timber alone. The Paris Agreement highlighted forests as a major carbon sink and a source of emissions. This shifted attention to carbon markets and sustainability goals.
Investors began asking how forests could support biodiversity, water, and soil. While monoculture plantations fit older models, mixed-species forests with stronger ecological value now often gain more attention.
Blending Finance with Forest Health
Modern approaches aim to connect financial goals with clear environmental results. This requires setting measurable objectives:
Define long-term goals, such as stronger forest health or more biodiversity.
Identify mid-term outcomes, like wildlife returning to restored land.
Track short-term actions, such as replanting or habitat protection.
Simple, science-based data helps show whether these goals work together. When done well, the result is stable financial returns and healthier forests. This balance makes forest investment both practical and valuable for the future.
Can We Build Markets for Biodiversity and Forest Investment?
Carbon markets are growing because carbon can be measured and traded. Biodiversity is harder. Each forest is different, and outcomes depend on local conditions. This means there is no single global system. Instead, strategies must be tailored to the land and the goals set for it.
Photo by cottonbro studio on Pexels
Who Pays for Biodiversity?
Traditional timber investors often focus only on wood returns. When biodiversity improvements add costs, other partners must help cover them.
For example:
Agricultural firms want to avoid being linked with deforestation.
Coffee and crop producers rely on pollinators and need diverse ecosystems.
Insurance companies save costs when healthier forests reduce fire, flood, or erosion risks.
These groups have clear reasons to invest because forest health protects their interests.
Public Land vs. Private Land
Most forest investment takes place on private land because ownership is secure. Public land is riskier since lease rights can change. Investors usually require long-term security, often decades, before they commit funds. Without it, capital is difficult to attract.
That said, public land offers strong opportunities. Projects that turn forest waste into bioenergy, reduce fuel loads, and support cultural fire practices can simultaneously provide financial returns and ecological gains.
Indigenous Leadership in Forest Investment
There is growing recognition of Indigenous-led strategies. Investment funds can support projects designed and managed by Indigenous groups.
These can combine timber, biodiversity, and cultural priorities. Investors agree on clear objectives, and nations maintain control of management decisions while delivering agreed outcomes.
The Role of Impact Investing
Impact investing combines financial returns with measurable benefits for people and nature. It is not a pure charity but does not aim for profit alone. Impact investors support healthier forests, stronger communities, and lasting ecological gains by accepting moderate returns.
The Role of Philanthropy and Impact Capital in Forest Investment?
Philanthropy and impact capital shape how forests can be managed for long-term benefits. Philanthropy is often short-term but can reduce risks and encourage larger investments.
Impact capital, on the other hand, helps cover early costs so traditional investors remain interested. They create room for strategies that balance profit with stronger forest health.
Photo by Anna Shvets on Pexels
How Philanthropy Helps
When forest managers change their approach, philanthropic funds can absorb part of the cost. For example, moving from clear-cutting to mixed-species management may reduce short-term profits.
Donors can cover this gap, making the project appealing to investors. However, planting trees alone is not enough.
A planted seedling is only the start, and forests need care and monitoring to thrive. Philanthropy has a greater impact when it supports strategies that last, not one-time gestures.
Building Investor Confidence in Forest Investment
Companies must prepare clear strategies before seeking support.
This involves:
Breaking projects into phases.
Identify which investors are to be involved at each step.
Setting milestones to track progress and reduce uncertainty.
Milestones are especially important. They show investors that projects are moving in the right direction before larger sums are committed.
Changing Investor Expectations
Investor priorities are shifting. In the past, timber was the main focus. Today, new investors also want measurable benefits like carbon storage, biodiversity, and social value.
Some investors focus on safe, steady returns, while others want financial and ecological outcomes. Either way, more capital is flowing into strategies that improve forest health.
The future of forests will depend on collaboration. Timber companies, Indigenous communities, scientists, insurers, and investors all have roles to play.
Investment provides common ground by linking financial goals with ecological outcomes. This approach helps manage forests as full systems rather than as separate parts.
Conclusion
Forests give us clean air, water, wildlife, and carbon storage, yet these benefits often go unpaid. When something has no price, people tend to ignore it. Linking finance with forest health helps change that. It ensures that forests are seen as valuable in both markets and daily decisions.
Forest investment began with timber, but it now includes more. Investors focus on carbon, soil, water, and biodiversity today. They look for ways to gain steady returns while also protecting ecosystems.
This shift invites new partners such as farmers, insurers, and Indigenous communities, each with reasons to invest in healthy forests. The work is not simple. Carbon is easier to measure than biodiversity, and public land raises risks.
However, clear goals, strong partnerships, and impact investing provide solutions. Philanthropy can reduce risks, while investors can support long-term care. Each step shows that finance can drive both profit and protection. The future depends on balance.
If we combine science, investment, and care, forests can thrive while providing value. When done with patience and clear purpose, forest investment can support both people and nature for generations.
FAQs
What is the main goal of forest investment?
The main goal of forest investment is to link financial returns with healthy forests. It allows forests to provide both economic value and long-term ecological benefits.
Can small investors take part in forest investment?
Most opportunities are designed for large institutions. However, small schemes and partnerships are slowly emerging, giving individuals limited but growing ways to participate.
How does forest investment affect local jobs?
Forest investment can create steady jobs in planting, management, monitoring, and eco-tourism. When managed well, it supports both local economies and the environment.
Is forest investment risky compared to other assets?
Risks exist, such as wildfires, market shifts, or insecure land rights. That said, forests also offer stable growth and protection against inflation, which many investors value.
Does forest investment only work in wealthy countries?
No, it also works in developing regions. In fact, it often brings much-needed capital to areas with weak regulations, helping protect vulnerable forests.