Nature Equity white

Nature Equity

Hectares of actual rainforest represented by asset-backed shares. A standard format for natural assets. Forestbase brings to market the shares of its conservation companies. Fractionalised, stabilised and secured.

We stabilise the legal-financial format in which rainforest is held while embracing the social realities locally.

ASSET OWNERSHIP:
Firstly, only the most stable land titles are qualified. Our legal and sourcing team has developed the Land Tenure Stability Index (LTSI), our own proprietary methodology. Only 1% out of pools of hundreds of forestland offers are selected for due diligence. We then fully regularise these land titles and ensure complete documentation before buying.

CONSERVATION:
We adopt the preventive model of conservation where neighbouring communities are immediately and closely involved. Positive social impact, of a long term character, is a must. Think of local employment, stakeholder benefit sharing and financial empowerment of local land owners. Find more info on our impact page.

SHARES:
The shares and thus investment is Swiss-based as opposed to a direct emerging market investment. We further spread risk through diversifying the land titles we acquire across several countries. In addition, we build a reserve where for every 100.000ha we put aside 10.000ha for extra stability. And in the unlikely event that the underlying asset does not perform, it can be sold and replaced.

Capital appreciation & yield

CAPITAL APPRECIATION:

Via our stabilised format the intrinsic value of rainforest can be unlocked and reflected in the price per hectare and by result the share it represents.

Future cash flows from the carbon credit market has been rising and maturing, further uplifting the valuation of its underlying assets (coupled design). Now also other ecosystem services are entering the market, starting off with biodiversity credits.

In both the political and private sphere, the awareness and urgency to address the negative impacts of climate change is expanding. Meanwhile, deforestation and degradation unfortunately continues, reducing the supply of nature globally.

YIELD:

Shareholders will be entitled to receiving a dividend when net profits are made. These profits stem from gross revenue streams from selling the conservation company's carbon and/or nature credits minus its total costs, mostly stemming from conservation.

Enhanced liquidity & tradability

By fractionalising the ownership of vast land titles into thousands of shares, each representing one hectare, we already boost liquidity for rainforests. By result, the shares represented by their respective hectares can much more easily be bought and sold at the respective market price. And going public, which is our ultimate goal, will grant the highest level of tradability (and true liquidity) to the shares.

Investment portfolio diversification

The ownership of natural assets not only decarbonises, but also helps diversify your investment portfolio. They have considerable risk spreading potential due to their low correlation with other industries, most of which are increasingly vulnerable to climate change. And within the natural asset class in particular, primary rainforests score high on climate resilience and protection from inflation.

Hedged against increasing regulatory changes

Rightfully so, the down-rating risk of sustainable investments is ramping up. Our model is non-extractive and our asset is dark green (SFDR 9 by design), offering the highest level of protection.

Rapid changes in policymaking occur mainly on the level of credits or rights (derivatives). We also incorporate ownership of the underlying forest itself, tangible and the real deterrent against deforestation. This gives us the flexibility necessary to readily adjust to future changes of governance in ecosystem markets.

Preemptive access to high-quality credits

Shareholders are granted a first right of refusal to acquire our high-quality credits at a competitive market price.

True permanence

Our model is designed for our managed rainforest to stay intact indefinitely. Firstly, our Swiss mother company holds onto the majority voting rights to maintain the conservation mandate. Secondly, even though the owner of our nature equity can change, the underlying hectare does not. That is because the economic rights to the value of the hectare are being exchanged, but not the physical ownership of the hectare itself. Thirdly, both our due diligence on land tenure security and selection procedures are relentless. We only engage in an acquisition when ownership in its most stable and closest form can be achieved.