The Zurich-based Timber Finance Initiative, an initiative of the Timbagroup, has launched the Timber Finance Carbon Capture & Storage Index. The index focuses on the CO₂ storage effect of wood and, with 30 selected listed companies, tracks the forestry and timber industry in the USA, Canada and Europe. Source: Timberbiz
The forest and timber industry has been at the beginning of a rapid growth cycle since 2020. After years of low investment and prices, changes are now being heralded internationally.
European and North American governments are promoting timber construction, institutional investors have rediscovered the timber supply chain, and new timber technologies are making it possible to build high-rise buildings and highway bridges out of wood.
Wood as a raw material is gaining value, timber construction is booming, and with it the entire industry.
The Paris Climate Agreement and the net-zero targets of companies and countries are further rincreasing the relevance of the forestry and timber industry and making it attractive for investors. There is a global search for readily available CO₂ storage options. The Timber Finance Initiative believes that CO₂-storing wood installed in homes over the long term will become internationally recognized in the future as the lowest-cost, rapidly scalable negative emissions technology (carbon dioxide removal technology).
Because the majority of existing Timber Indexes focus on forests or short-lived paper production, Timber Finance has developed its own index. This index tracks the entire value chain of modern engineered timber construction. The focus is on companies that contribute to the production of durable wood construction products, said Erik Reichmuth, Managing Partner of theTimber Finance Initiative.
There is a knowledge and investment gap between the financial market and the modern forest and timber industry. The Timber Finance Initiative closes this gap with modern financial products.
After all, wood from forests to timber construction, is the real hidden champion in sustainable finance and belongs in the portfolio of every climate-conscious investor, explains Thomas Fedrizzi, Timber Finance Initiative Board Member.
The Timber Finance Carbon Capture and Storage Index serves as the basis for investable financial products. TFI plans to launch index-based products for climate-conscious investors in the coming months.
Other investment products such as a Timber themed fund are in the pipeline.
The index focuses on the long-term use of wood and the use of wood elements in construction. It covers the entire value chain, from primary production to sales stage 4.
Thanks to the industry-specific weighting, all industrial sectors are represented, from securing raw materials in the forest, through sawmills and glue plants, to the finished building.
Innovative companies from the wood bio-economy and wood product manufacturers have been integrated as well as leading companies from the construction industry with a proven wood construction strategy.
Companies with majority operations in paper, packaging, cellulose, furniture and other short-term wood products were excluded.
