The financial index for the forest and timber industry
22.02.2022
The Zurich Timber Finance Initiative, an initiative of 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.
The forestry and timber industry has been at the beginning of a rapid growth cycle since 2020. beginning of a rapid growth cycle. After years of low investment and low European and North American governments are promoting timber construction, institutional investors have rediscovered the timber supply chain, new wood rediscovered the wood supply chain, and new wood technologies are making it possible to build skyscrapers and highway bridges made of wood. Wood as a raw material is gaining in value, timber construction is booming and and with it the entire industry.
The Paris climate agreement and the net-zero targets set by companies and states are and the net-zero targets set by companies and governments are making the forestry and wood attractive for investors. The search is on worldwide for easily available CO₂ storage options. are being sought. The Timber Finance Initiative is convinced that, in the long term, CO CO₂-storing wood used in houses will be the cheapest the most cost-effective, rapidly scalable negative emission technology in the future. (Carbon Dioxide Removal technology) will become internationally recognized.
Focus on CO₂-storing capacity
"Because existing Timber
indexes focus mainly on forests or short-lived paper production, Timber Finance has
focus, Timber Finance has developed its own index. Our
Index tracks the entire value chain of modern engineered timber construction.
The focus is on companies that contribute to the production of long-lived
timber construction products," says Erik Reichmuth, Managing Partner of the Timber Finance initiative.
"There is a knowledge and investment gap between the Finance market and the modern forest and timber industry. The Timber Finance Initiative closes this gap with modern financial products. Because wood - from forest to timber construction - is the real "hidden champion" in the field of finance and belongs in the portfolio of every climate-conscious investor," explains investor," explains Thomas Fedrizzi, Timber Finance Initiative Board Member.
Liquid product planned
The "Timber Finance Carbon Capture and Storage Index" serves as the
basis for investable financial products. In the coming months, TFI plans to
launch index-based products for climate-conscious investors. For these
products, we are currently offering banking and product partnerships. Other
investment products such as a Timber theme fund are in planning.
- Thematic focus
The index focuses on the use of long-term long-term use of wood and the use of wood elements in construction. It tracks the entire value chain, from primary production to sales stage 4.
- All industry sectors
1,600 companies were analyzed. Thanks to the industry-specific weighting all industrial sectors are represented, from raw material securing in the forest, to sawmills and glue sawmills and glue plants to the finished building.
- Focus on innovation and "game changers "
Innovative companies from the wood bio-economy and wood product manufacturers have been integrated as well as leading companies in the construction industry with a proven wood building strategy.
- Exclusion criteria
Excluded were companies with a majority of their business in paper, packaging, cellulose, furniture and other short-term wood products.
About the Timber Finance Initiative
Established in 2021, the Timber Finance Initiative links the financial and capital markets
with the modern forest and timber industry through the development of new
financial products, methodologies for CO₂ storage measurement, white papers on Timber
Investment 2.0, Timber Asset Management, a Knowledge Hub, training and
consultations. www.timberfinance.ch