Construction causes around 40 percent of global CO₂ emissions, and timber can help as a building material. For more timber to be used, new financial incentives and products are needed. That is the argument of Erik Reichmuth, Managing Director of the Timber Finance Initiative, in Prestige Business of 19 April 2022.
Outlet
Prestige Business
Published
April 19, 2022
A lot of money, little clear impact
According to Swiss Sustainable Finance's 2021 market study, the volume of sustainable investments grew by 31 percent in 2020 to CHF 1,520.2 billion, with sustainable funds up 48 percent. Worldwide, around four trillion dollars flowed into sustainable investments, more than the 2.5 trillion said to be needed for the UN Sustainable Development Goals. Reichmuth attributes the fact that these goals are still out of reach to unclear impact and a lack of ratings. In addition, sustainable forests had been forgotten in many portfolios.
The boom has begun.
First step: an index
Founded in 2021, the Timber Finance Initiative set out to develop new financial products that make the long-term carbon retention in timber construction products visible, including a timber fund for solid SMEs in the sector. As a first step, it developed an index covering the entire value chain of engineered timber construction in Europe, Canada and the US, selecting 30 companies from 1,600 analysed. Since March 2020, the index had clearly outperformed the MSCI World and the S&P Timber and Forest Index. The same text appeared in September 2022 as a company contribution in the SonntagsZeitung's Nachhaltigkeitsguide.
How Timber Carbon sees it
More on the index is in our article on the Lignum news item of March 2022. Timber Carbon, launched in 2026 as a spin-off of Timber Finance, quantifies, certifies and monetises the carbon removed in mass timber buildings as carbon removal credits on the voluntary carbon market.
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Source
Prestige Business
Swiss business magazine
