This piece was co-written by Eriks Brolis, Conservation
Business Lead on The Nature Conservancy’s Global Lands Team, with Sofia Faruqi,
Manager of the New Restoration Economy, and Andrew Wu, Research Analyst for the
New Restoration Economy—both of the World Resources Institute.
As one of our most powerful natural climate solutions, forest and landscape restoration is among the cheapest and most effective ways to store carbon and curb climate change. What’s more, expanding restoration can create enticing investment opportunities in a “restoration economy.”
One hundred and fourteen governments have made commitments to restoration as part of their overall plans to tackle a changing climate, pledging to restore 162 million hectares (400 million acres)—an area six times the size of the United Kingdom. But transforming land use at a large scale means that we cannot rely on public or philanthropic resources alone. To reach the $26 billion needed each year to meet countries’ pledges under the Paris Agreement, the private and commercial sectors need to be involved.
One barrier to attracting the needed funds has been lack of awareness of the investment opportunities. Investors ask, what are the business models? How can restoration generate a return on investment? What is the growth potential?
As we have noted previously, restoration can generate both income and capital gains. More and more enterprises are seeing the commercial potential in restoration-related sectors, including those whose main value proposition is linked to forest and landscape restoration. This may be a direct link—enterprises that plant trees, for example—or an indirect one, such as companies that offer technology or consulting services for restoration. A restoration enterprise can also include companies whose revenues are not directly linked to restoration, but whose customers are drawn to them because they channel their profits toward restoration.