Value to be added by measuring the Worth of Tassie forests

Bryan Hayes is excited by developments that show protection of forests is valuable to people, businesses and ecosystems

IN the words of venture capitalist John Doerr, you have to measure what matters.

As a business that relies on a healthy and productive environment to grow trees, Forico has long known that the natural landscape we manage matters not only to our bottom line, but to the community around us.

Forico’s 11.7 million Green Metric Tonnes of standing timber in our plantations and our total forest management area of 174,349ha represents 3 per cent of Tasmania’s water catchments.

Of this total, Forico manages 77,552ha of native forest purely for its natural values. These forests have been independently assessed by ecologists as relatively untouched. We also protect 21,960ha of riverside reserves in our estates which have prevented nearly 12,000 tonnes of erosion. In 2019 we began exploring how to measure the value of our natural assets alongside traditional metrics of production volumes and profit and loss.

The outcome of that journey is the launch of our world-leading Natural Capital Report which uses robust accounting methodologies to measure the value of our environmental assets.

These include trees, soil, air and water, used for a wide range of ecosystem services, such as timber production, water filtration, recreational and cultural services, climate regulation, habitats for flora and fauna biodiversity and carbon sequestration.

For the first time we can put a dollar figure on how much the natural environment matters to our business and to society. And it matters a lot.

The net positive value of Forico’s natural assets has been conservatively estimated at $3.39 billion, which can be split between $463 million to business and $2.92 billion to the broader community.

Natural Capital Accounting provides a framework for Forico to record our transactions with nature, ensuring the sustainable use and renewal of these precious resources. It creates a real awareness of the impacts our production activities have on the environment and society.

The report has been independently assured by KPMG to provide robust oversight of our process, and so our stakeholders and investors can have confidence in the results presented.

We need to value all the ecosystem services provided by soil and seas, including biodiversity. Like a fund manager who spreads their risk, biodiversity is nature’s resilience against shocks.

Of course, measuring the value of our natural assets is just the start. Once something is valued, there is impetus to ensure it is protected.

Forico is constantly innovating and exploring ways of maintaining and enhancing the biodiversity and conservation values of our estate. In the past two financial years, we invested more than $1.5million in conservation activities, often well in excess of any legislative compliance obligations.

One priority project is to gain accurate data on wedgetailed eagle nest sites to make sure our operations have the least possible impact on breeding eagles.

Supporting Sustainable Timber Tasmania and data scientists Indicium Dynamics, we are using sensors and cameras to monitor and track nest activity across the wedgetail breeding season. This

technology-forward Internet of Nests approach provides real-time heat maps of active nests, so we can quickly and accurately modify forest operations accordingly.

The next step is to identify ways to monetise biodiversity values to further incentivise their protection and sustainable management.

Some states, including NSW, have introduced biodiversity offset schemes that offset unavoidable impacts of development on biodiversity through the preservation of forests and ecosystems. Leading offset schemes put the value of Forico natural forest areas at almost $7 billion.

Forico has a positive role to play in enhancing our knowledge of climate change impacts and to support greater climate resilience in Tasmania’s economy, environment, and society.

Our trees have sequestered more than 126 million tonnes of carbon dioxide from the atmosphere, with a further 54 million tonnes expected to be sequestered by the standing plantation estate before harvest.

Using the social cost of carbon derived by the US Environment Protection Agency, which is estimated at $68 AUD per tonne of carbon dioxide, the value of carbon sequestered on Forico’s estate is worth more than $8.6 billion.

Forico’s Natural Capital Report is gaining momentum with investors and other companies and industries alike, who are watching closely, keen for us to share our knowledge and experience.

Other states are eager to talk to us to about how natural capital reporting can further inform the design of biodiversity offset schemes and ecosystem markets, presenting an opportunity for Tasmania to lead the nation.

Sustainable Timber Tasmania and other forest managers across Australia and abroad are building Natural

Capital stories, and we are keen to assist to share our learnings and to learn from others. We are also heartened by the University of Tasmania’s work on natural capital reporting, investigating how it might feature into studies for Tasmania’s future business leaders.

Forico believes Tasmania is uniquely placed to become a world leader in biodiversity preservation, emissions reduction and responses to climate change.

We hope our Natural Capital Report will help drive positive change.