rethink sustainability

    Hope from the ashes: unearthing ancient value in our forests

    As the tropical dry season comes to a close, clouds of dark smoke billow across rainforests from Brazil to Borneo. Since as far back as the Neolithic Era, indigenous communities have used a technique known as ‘slash and burn’ to temporarily clear land with fires whilst simultaneously fertilising soils with a thick layer of ash. For those ancient farmers, the scorched earth represented rebirth.

    This clearance traditionally involved farming for just a few years before leaving plots fallow, allowing the forest to regrow. But fire use has changed. Agricultural firms are now accused of brutalising landscapes with chainsaws, bulldozers and agro-chemicals, making permanent changes to the forest and replacing traditional farming practices with industrial agriculture. And where once the technique was carried out over just a few acres at a time, industrial-scale clearance now creates fires that cover thousands of hectares, spreading dangerous pollution across entire regions1 and pushing indigenous communities out of their ancestral lands2.

    The solution for all forms of deforestation is the same – to make forests “worth more alive than dead”

    Every year, industrial-scale infernos, logging, mining and other types of clearance combine to destroy 10 million hectares of forest.3 In the face of this onslaught, forests are losing their resilience. In the Amazon, for instance, it is estimated that 75% of the rainforest is approaching a tipping point, where widespread tree loss is undermining the ability of the forest to support itself.4

    The solution for all forms of deforestation is the same – to make forests “worth more alive than dead”.5 Now, new nature-based investments are promising to do just this, catalysing reforestation and forest preservation across vast areas, and unearthing fresh value in degraded landscapes. By investing in nature, hope can rise from the ashes, rebirth can once again follow the fire.

    By investing in nature, hope can rise from the ashes, rebirth can once again follow the fire


    Why forests matter

    Despite centuries of deforestation, our planet is still home to enough forest to cover the continent of Europe four times over.6 For both people and the planet, forests are our most important ecological infrastructure.

    When it comes to ecosystems services, trees are perhaps best known for their enormous capacity to store carbon. Forests are our largest terrestrial sink, absorbing 1.5 times more CO2 than is emitted by the entire US economy every year7. They are an indispensable ally as we face the climate challenge.

    Forests are much more than just stores of carbon, however. They are also an essential host to much of the planet’s animal and plant life – it is believed that 80% of all land-based biodiversity can be found in forests.8

    Increasingly, science is discovering how valuable this biodiversity is. To take just one example – the rosy periwinkle, a pink, five-petalled flower, native to the Madagascan rainforest. The periwinkle is unspectacular when compared against many of Madagascar’s native flora, but its simple looks belie its global importance. Since the 1950s, the Madagascan periwinkle has been saving the lives of thousands of people by giving us the drugs to treat leukaemia and Hodgkins’ lymphoma. The periwinkle is not alone – in the West, medicine cupboards are stuffed with treatments provided to us by the enormous diversity of forest plants.

    This biodiversity plays a crucial role in maintaining forest health, too. Groundbreaking Canadian ecologist Suzanne Simard grew up in the forests of British Columbia. There she discovered that the vast array of plants and animals we see above ground are little more than the tip of the iceberg. Dig below the surface and you will find billions of bacteria and vast, complex networks of fungus which play essential roles in keeping trees healthy, acting as conduits for nutrients and providing early warning of disease or pests.9

    For both people and the planet, forests are our most important ecological infrastructure


    Natural insurance

    Forests are also essential water regulators. For centuries, the Yanomami people of the Amazon basin have believed that native forests can “call the rain”10. Science has recently discovered that they are right. Through mass evapotranspiration – the plant equivalent of ‘sweating’ – forests do, indeed, create rain from thin air.11

    The ability to regulate water flows extends below ground, too, where forests store and filter water on a vast scale before releasing it slowly to surrounding areas. Around the world, millions of people are reliant on forests for their drinking water.12

    Forests also protect against floods. In southern China, in the summer of 1998, heavy rainfall led to widespread flooding – water poured over the banks of the Yangtze river for 60 days straight. Thousands of lives were lost, millions were made homeless, and an estimated USD 20 billion of damage incurred. After the flood, the blame fell on upstream logging, which had diminished the ability of forest soils to absorb water. Authorities immediately set about restoration work.13


    A green belt

    Recognising the importance of these ecosystems services is key to getting reforestation projects off the ground. 

    In 2004, Kenya’s Professor Wangari Maathai became the first African woman to win the Nobel peace prize. The honour came largely as a result of her work with the Green Belt Movement, a grassroots environmental organisation she formed to promote healthy soils and water tables through reforestation.

    Two years after Maathai had been awarded the prize, the Green Belt Movement began a project to restore thousands of hectares of Kenya’s Aderbares forest – a water catchment area of national importance – which had been degraded by cattle grazing and charcoal production, causing springs and rivers to run dry. Over the next six years, hundreds of local groups planted nearly 4 million trees. According to the US- and French-government international development agencies, which supported the work, the reforestation efforts have already recharged the water table, boosted river levels, and “led to the rejuvenation of 65 springs”.14

    …researchers are experimenting with modern technology to accelerate the reforestation process

    Thailand’s Doi Suthep-Pui National Park has seen similar success in a pilot reforestation project that achieved near full rainforest recovery in just two decades15. There, researchers are experimenting with modern technology to accelerate the reforestation process. Drones have been deployed for pre-site assessments, aerial seeding at distance, and remote maintenance. In the future, they anticipate drones may even be used to collect seeds from established trees and AI will lend a hand in automating some of the work.16 A number of commercial firms already offer seeding by drone to facilitate rapid reforestation across large areas.

    Read also: Figs, wolves and starfish – the regenerative power of keystone economics 

    An alternative way to restore lost forest

    In the West Brazilian state of Acre, with backing from the state government, the Puyanawa indigenous people are working to restore lost rainforest by turning barren land into ‘agroforests’. After a century of their ancestral lands being exploited by outsiders, the Puyanawa have embarked on a plan to reforest 1,500 hectares with native trees to provide nutrition for soils and enable integrated farming.17

    So far, the project is working. According to the Amazon Reforest Alliance, since the land was officially demarcated as belonging to the Puyanawa in 2001, deforestation in the area first slowed, and then stopped. Leading the project, Puwe Puyanawa said, “The idea is for us to…[transform] this place into a paradise abundant with fruits, medicinal plants, and valuable hardwoods. This approach emphasises our ancestral commitment to nurturing the forest.”

    The Puyanawa’s success is on-the-ground evidence of what scientific studies are increasingly discovering – in the Amazon in particular, whenever indigenous land rights are bolstered, deforestation slows and even reverses.18

    The key to creating new economic value in our forests is to follow the ancient example of indigenous communities


    Protecting nature – creating economic value

    According to Marc Palahí, holistiQ’s Chief Nature Officer, the key to creating new economic value in our forests is to follow the ancient example of indigenous communities like the Puyanawa. Speaking on a visit to Ecuador’s Amazon basin region, he said, “The indigenous knowledge and wisdom about the Amazon forest is the result of more than 12,000 years of sustainable co-existence. We need to learn from indigenous communities how to generate our science into wiser decisions.”

    Increasingly, this combination of science and ancient wisdom is recognising that there is greater economic value in preserving forest landscapes than in degrading them. In Southeast Asia, for example, a science-led approach is realising the true value of mangrove forests. Across the region, mangroves have long been removed in order to build shrimp farms. Recently, researchers have shown that the income from shrimp farms is dwarfed by the economic value of the coastline protection19 and carbon sequestration provided by the mangroves. A number of governments have now committed to conserving and restoring their mangrove forests20, most notably Indonesia, home to more mangroves than any other country, which has pledged to restore 600,000 hectares of depleted forest, the equivalent of more than one million football fields.

    In places, added economic value will be found in ecotourism, such as in Rwanda’s legally-protected Volcanoes National Park. The 160 square kilometres of tropical rainforest is home to 600 mountain gorillas, one third of the remaining global population. Drawn by the gorillas, tourists bring in nearly USD 200 million into Rwanda each year21, making the park the largest single source of revenue in the country.22

    For investors this focus on protecting forests and their essential biodiversity is creating entirely new asset classes based on nature itself


    A new asset class

    For investors this focus on protecting forests and their essential biodiversity is creating entirely new asset classes based on nature itself. Perhaps the most established of these are carbon markets, where the purchase of carbon credits is used to fund forest restoration and preservation, recognising healthy forest ecosystems as vital stores of carbon. As with other nature-based investments, carbon markets offer investors a way to accelerate the climate transition, while protecting portfolios against climate risk.

    Read also: Carbon markets – the emerging asset class restoring the world’s lost forests

    Alongside carbon markets, fledgling ‘biodiversity markets’ are beginning to take hold. In the UK, for instance, the 2021 Environment Act paved the way for developers to buy ‘biodiversity credits’ as part of their obligations to boost local biodiversity alongside large infrastructure projects.

    Increasingly, real-world nature-based assets will command an investment premium. For instance, agroforests created on degraded land will produce regenerative ‘green’ commodities while also acting as a carbon sink, opening them up to a place on the world’s carbon markets. Elsewhere, as governments begin to recognise the essential role of nature’s ecosystems services, new value will be found in landscapes that filter water or protect against floods.

    According to UN projections, nature-based solutions can provide 37% of the carbon sequestration and other climate mitigation measures needed to meet the Paris temperature target by 2030.23 At Lombard Odier, we believe this will only be achieved if we invest in nature, valuing it not for what we can extract, but for it’s regenerative power. As a multitude of innovative new opportunities for nature-based investments arise, the thread common to all will be that healthy ecosystems are worth far more than degraded ones, and that we will maximise economic value not by exploitation, but cooperation, with nature.


    Indonesia haze: Why do forests keep burning? - BBC News
    The burning scar: Inside the destruction of Asia’s last rainforests - BBC News
    Deforestation and Forest Loss - Our World in Data
    Pronounced loss of Amazon rainforest resilience since the early 2000s | Nature Climate Change
    5 Why Forests? Why Now? The science, economics and politics of tropical forests and climate change, Frances Seymour and Jonah Busch
    Forest area - Our World in Data
    Environment: How much carbon do forests absorb? | World Economic Forum (
    UNEP and Biodiversity | UNEP - UN Environment Programme
    Suzanne Simard: How trees talk to each other | TED Talk
    10 The Nature of Nature: Why we need the wild, Enric Sala
    11 Trees in the Amazon make their own rain | Science | AAAS; New study shows the Amazon makes its own rainy season – Climate Change: Vital Signs of the Planet (
    13 The Nature of Nature: Why we need the wild, Enric Sala
    14 Rehabilitation of Aberdares Forest with Green Belt Movement | AFD - Agence Française de Développement; Green Belt Movement Revives Watershed in Kenya | Archive - U.S. Agency for International Development 15 FORRU - History
    16 FORRU - Automated Forest Restoration
    17 In Acre state, indigenous people lead reforestation efforts in Amazon | Agência Brasil (
    18 Indigenous land rights help protect Amazon rainforests: study | World Economic Forum (
    19 The Global Flood Protection Benefits of Mangroves | Scientific Reports (; Comparing the Economic and Social Value of Mangroves and Shrimp Farms | World Resources Institute (
    20 Six things you can do to bring back mangroves (
    21 Rwanda Gorilla Tourism Rises by 25% - Gorilla Trekking Tours (
    22 The Nature Of Nature, Enric Sala
    23 ipbes_global_assessment_report_summary_for_policymakers.pdf

    Important information

    This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

    Read more.


    let's talk.