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Let’s plant a greener world

Investing in forestry is a great way to plan for your financial future while helping the planet, says Brenda Ward.

9 March 2022

The world is fast realising we need to take drastic action to protect the environment.

Power stations, factories, vehicles, and planes are pumping out fossil fuel emissions and upsetting the delicate balance of carbon in the atmosphere.

No one knows that better than Forest Enterprises chief executive Bert Hughes.

He says the company’s forests have never grown faster or better, feeding on the excess of carbon in the air. It’s an unintended consequence – but it’s not really a good thing, he says.

“The more that you look at the science around climate change, the more concerned we ought to be about what we’re emitting,” he says.

Trees are a stop-gap strategy until there’s widespread change, he says. Planting trees reduces the amount of carbon in the atmosphere.

“Trees take in the carbon dioxide and, using photosynthesis, transform it into the building blocks of the trees.

“Growth is driven by the temperature, sunlight – and carbon dioxide.”

Forests help in weather events

Even while they’re recycling carbon dioxide, forests are also protecting us from the damaging effects of climate change, says Hughes.

“The technical term for it is the hydrological cycle. The hydrological cycle in its simplest sense is rain, evaporation, and more rain,” he says.

“A tree is really just a pumping mechanism, taking moisture from soil level to the leaves, where trees use it for photosynthesis, then they expire it, in a process called transpiration.

“Water, which is moisture in the atmosphere, gets exhaled by the tree,” says Hughes.

“If there’s a major weather event with heavy rain falls, a significant proportion of it sits on the tree and evaporates off the surface area.

“Trees catch way more rainfall and evaporate more rain than pasture or the hard surfaces in urban areas.”

At ground level there are benefits, too.

Less rainfall in forests reaches ground level and when it does, the soil is more porous than grass, because it’s less compacted, says Hughes.

“When water does reach the forest floor, it has to flow through a lot more biological material before it reaches streams, so it mitigates these peak-intensity rainfall events.

“You see much less erosion from forest country than you do from pasture,” he says.

Bird and insect habitats

Hughes says since he started in the industry in the 80s, he’s seen an increasing number of birds in forests.

“And pine forests have heavy bark, so you find a lot of insects living in the bark for shelter from foraging animals.

“Unlike pastural land, where you have tillage restricting the amount of biodiversity, we tend to plant our crop and then leave it alone.”

Part of the forest’s appeal is the ‘understorey’ of generally native trees, where birds spread the seeds.

“Now we plant forests with larger native bush margins beside rivers, which gives better filtering for rainfall events and gives us biodiversity.

“The New Zealand falcon particularly likes a gap between a forest which has been harvested, and a remaining crop of forestry. It hunts in the gap and nests in the trees.”

The forestry industry creates what he calls a ‘mosaic’ of land use, some trees freshly planted, some harvesting and some growing, leading to a ‘richness’ of species.

At the end of the forest’s life cycle, you find other benefits for sustainability, says Hughes.

“With laminated timber construction, you can now build mid-level high-rises up to 10 or more storeys that are lighter and more earthquake resilient than steel or concrete buildings.

“The problem with steel and concrete is the amount of energy it takes to create the product, whereas wood is created under its own energy, so it’s carbon-neutral.”

Even the waste from forests is a sustainable product. In Scandinavia, a lot of energy comes from forest waste, including home heating logs, says Hughes.

Now the crown research institute Scion
is working on biorefineries which could make energy directly from plant-based products.

As younger people seek investments that are sustainable and socially responsible, forestry is trying to be more accessible to those locked out of the property market, says Hughes.

“We’re trying to offer an affordable investment. Forestry syndication allows people to invest in land.

“With any investment, there has to be a return. But as well as that, with forestry you’re doing good,” Hughes says.

How to invest in forests

You can invest in sustainable forestry from $8,472 and earn projected gross 7.68% IRR.*

Now open for applications is Forest Enterprises’ latest investment opportunity, the Pukekōwhai Forest Investment, an 800+ hectare second-rotation forest in the Wairarapa.

This is existing forestry with proven productivity.

For more info or the Product Disclosure Statement, visit www.forestenterprises.co.nz or call 0800 746 346.

* Minimum initial investment is $8,472 for 200 shares, plus affordable annual instalments; projected gross IRR 7.68% at harvest. The issuer of shares in Pukekōwhai Forest Investment is the manager Forest Enterprises Limited, and the offeror is Forest Enterprises Growth Limited (a related party). Forest Enterprises Limited is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds) which are primarily invested in forestry assets.

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