Why every Business should care about Forest Conservation

GreenChips is a platform for buying and selling excess semiconductors, therefore our contribution to nature conservation is the reduction of e-waste and the sustainable use of resources. But that was not enough for us, so we decided to use 10% of our profit to conserve and restore forests. It would be easy to think that this is due to branding and having a “greener image”, especially since the semiconductor industry has a low dependency on forests and their resources. Nevertheless, forest conservation has many beneficial aspects, aside from branding, which most companies have never considered. What those benefits are and how they can be useful for your business is the topic of this article.

Benefit 1: CO2 absorption

The most well-known benefit is the capability of forests to absorb large amounts of CO2 emissions. Currently forests are responsible for the absorption of 30% of CO2 emissions and the rest goes into the ocean (23%) or the atmosphere (47%), where they fuel climate change. To compensate for the CO2 that gets emitted during normal business operations, companies plant trees which capture the greenhouse gas. Most companies have a goal to become net-zero, which means they want to reduce greenhouse gas emissions and balance residual emissions with removals by a certain date in the future. It is important to note that planting trees is not an excuse to proceed with the business practices that harm the environment, but rather find more sustainable ways to do business while also making up for the damage that has already been done.

Benefit 2: business resilience
Consumers are also becoming increasingly aware of their responsibility when making a purchase. And when 79% of consumers across Europe, the US and India are likely to change their product preferences based on social responsibility, inclusiveness, or environmental impact their preference is clear. Even B2B companies will see an increase in businesses that prefer to work with environmentally conscious businesses in order to reach their net-zero goals. By starting to invest in forest conservation right now a company can establish a position as a more environmentally friendly alternative to their competitors. Furthermore, many governments are starting to pass legislations to protect and conserve natural ecosystems. Carbon taxes and mandatory climate-related financial disclosures are also intensifying due to stricter carbon regulations. Since forests play a critical role in carbon removal and storage, forest restoration and conservation are cost-effective and impactful investments for businesses while getting ahead of new regulations as well.

Benefit 3: values-based leadership

If forest conservation is combined with a broader sustainability strategy, businesses can become industry leaders in sustainability and strengthen their relationships with customers, partners and even employees. For potential hires and existing employees reducing a companies impact on the environment is becoming an important decision factor for their choice of work. Especially Millennials and younger generations prioritize a business’s sustainability commitments when deciding where to work. Environmental leadership is at the heart of building employee loyalty and therefore every investment in forest conservation can also be seen as an investment in talent attraction and retention.

Benefit 4: business profitability and growth

Many people in management positions still see sustainability as an expenditure instead of an investment that also yields returns. The returns of sustainability may take some time and might not be as easy to spot, because they are not strictly monetary, but in the long term it will also benefit your company’s capital. In the case of business resilience and environmental leadership it is proven that it can lower costs for new capital, talent recruitment and retention. A study from the bank of America suggests that businesses with a better environmental social governance produced higher three-year returns, were more likely to become high quality stocks while also being less likely to have large price declines or going bankrupt. The positive relationship between financial performance and sustainability is also true when accounting for transaction costs, market risk, investment style and industries. Better sustainability policies tend to lead to better credit ratings and lower costs of equity, suggesting that the two factors are deeply interconnected.

Sustainability has long since ceased to be just an advertising tool and is now a concern that affects us all. With more and more research showing that sustainability saves costs instead of causing them it should even dawn on people who prefer profits over nature protection. Forest conservation can be an easy first step for every business to take part in this paradigm shift that is already happening.

For an easy start here are the five keys for successful forest conservation:
  • Protect existing forests
  • Partner with local communities, Indigenous peoples, governments, NGOs, and other businesses
  • Prevent greenhouse gas emissions and nature loss as a priority
  • Prioritize projects that deliver both environmental and social benefits
  • Plan for growing the right trees in the right way and in the right regions
For even more information you can contact us about our tree planting efforts, or you can read the business case from the World Economic Forum that inspired this article right here.
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