Private equity firm to sell biodiversity credits from rainforest conservation
Private equity firm to sell biodiversity credits from rainforest conservation
Rhett Butler, mongabay.com
August 6, 2008
Scheme would generate investment returns while restoring rainforest and protecting wildlife
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An investment firm has launched the first tropical biodiversity credits scheme.
New Forests, an Australia-based company, has established the Malua Wildlife Habitat Conservation Bank in an attempt to monetize rainforest conservation.
The “Malua BioBank” will use an investment from a private equity fund to restore and protect 34,000 hectares (80,000 acres) of formerly logged forest that serves as a buffer between biologically-rich forest reserve and a sea of oil palm plantations.
The conservation effort will generate “Biodiversity Conservation Certificates”, the sales of which will endow a perpetual conservation trust and produce a return on investment for the Sabah Government and the private equity fund.
New Forests believes the certificates — each of which represents 100 square meters of rainforest restoration and protection — will be purchased by companies looking to bolster their environmental credentials for the marketplace. Customers are expected to include oil palm producers and forestry companies.
 Oil palm plantation and logged-over forest in Sabah, Malaysia on the island of Borneo near Malua. |
“Energy, food and cosmetics companies relying on agribusiness products, particularly palm oil, are increasingly scrutinized for perceived impacts on rainforests,” said New Forests in a statement. “By purchasing certificates, buyers can claim a transparent and credible contribution to high value forest conservation.”
New Forests says that it hopes the sale of biodiversity credits will boost conservation where government efforts and philanthropy have fallen short.
“To date, public and philanthropic funding sources for conservation have not kept pace with the rate of biodiversity loss,” said New Forests. “Attaching value to conservation will harness private sector finance to help fill this funding gap.”
The wildlife banking deal comes shortly after New Forests unveiled an “avoided deforestation” investment in an area of rainforest on the island of New Guinea. The conservation initiative would generate carbon credits that will be sold in voluntary markets to firms and individuals looking to offset their CO2 emissions.
This year has also seen London-based Generation Investment Management — Al Gore’s investment firm — take a minority investment stake New Forests.