According to von Hagen, there is little opportunity to exploit WFCEs in the Pacific Northwest, where there is more public land than on the East Coast. Besides emphasizing the competitive advantage of the region's unique (and thus potentially pricy) set of red cedars, redwood and spruce and the region's proximity to China and Japan, Ecotrust Forest Management stresses its capacity to improve the well-being of communities.
"All of our properties have been financed with new markets tax credits, and we have social as well as environmental objectives," she says.
New markets tax credits, which are designed to spur investment in distressed communities, are authorized by Congress and allocated by the Treasury's CDFI Fund. They allow the purchaser to reduce its basis in property acquisitions by 20% to 25%, thus increasing its ultimate returns.
Yvon Chouinard, the founder and owner of Patagonia Inc., the outdoor clothing company, took his money out of his IRA and invested it with Ecotrust Forest Management. "My money was just sitting around in the stock market," he says. "Nobody really knows what's happening in the companies they're investing in, and it just seemed too risky for me. Taking it all out and buying into something that people need, rather than what [they] want, is the safest thing I can do.
"With us being in a period of peak resources of every kind," he adds, "I feel good about owning trees; the stock market goes up and down, while my trees are growing every day."
Different woods, different strategies. That's what biodiversity-and natural competitive advantage-is all about. And with biodiversity at its heart, sustainable forestry investing continues to evolve.
A former investment banker and veteran financial journalist, Ellie Winninghoff's work can be found at: wwwDoGoodCapitalist.com. She can be contacted at: ellie.winninghoff (at) gmail.com.