Impact Investing in the Forestry Sector: Opportunities and Challenges

Forestry is emerging as a critical sector for impact investors, offering opportunities to address climate change, biodiversity loss and economic development while generating competitive financial returns. In 2024, 15% of investors made at least one forestry investment, and just under half expect to increase their allocation to the forestry sector in the next five years, according to the Global Impact Investing Network (GIIN) State of the Market report.

To assist investors in understanding their impact in the forestry sector compared to their peers, the market and the Sustainable Development Goals (SDGs), the GIIN forestry impact performance benchmark collected data on 117 annualized investments made to 67 investees by 14 investors from 2013 - 2023. The GIIN also interviewed three impact investing organizations operating in three different continents: Agrroempresa Forestal (AF) headquartered in Uruguay, Finnfund headquartered in Finland and New Forests headquartered in Australia. Each of these organizations also participated in the design of the benchmark and provided data. The GIIN forestry impact performance benchmark includes investments in 27 countries.