Hardly a day goes by where climate and environment issues are not among the major news headlines. 
For example, we recently watched in disbelief as parts of the Amazonian rainforest burned out of control, largely due to a dramatic increase in deforestation. About 17 per cent of the rainforest has been destroyed over the past 50 years, and losses are on the rise.
However, this trend is not limited to Brazil, with forests all over the globe disappearing at an alarming rate. Between 1990 and 2016, the world lost 1.3 million square kilometres of forest – an area larger than South Africa. If society wants to ensure our planet’s forests and rainforests will be here for future generations, we must get serious about protecting these vital assets — and investors can play an important role.
While the great forests of the world may seem distant from our everyday lives, consumers and corporates have the ability to effect meaningful change. Consumer demands, expectations and buying decisions are very powerful and drive increasing business momentum towards more sustainable and less environmentally harmful solutions.
New solutions to safeguard nature are needed, but even more importantly, we must increase adoption of existing solutions, which are currently optimising resources. While governmental assistance and incentives are important, most of the progress we are witnessing is coming from the corporate sphere, with many leading companies already delivering value-added solutions to real world problems.
Below are three examples.
Weyerhaeuser
When it comes to deforestation, Weyerhaeuser, a leader in sustainable forest management, is making a real difference. As one of the world’s largest private timberland owners, the company manages millions of hectares of land – with its entire timberland portfolio certified to the Sustainable Forestry Initiative Forest Management Standard. This means the company manages its forest to ensure a sustainable supply of wood for customers, while protecting other benefits the woodlands provide – such as clean water, clean air and habitat for wildlife.
Weyerhauser is a solid investment case, as the company is dedicated to harvesting trees in a responsible and renewable way. The wood produced is sold to customers as an alternative to other carbon-heavy materials – like steel and cement – thereby contributing to a more sustainable society. With its sustainable business model, Weyerhauser stands to benefit from increased awareness about sustainable products.
Trimble
New technologies can also be leveraged to protect our forests. For example, Trimble’s eCognition Essentials software supports time-based analysis for imagery and graphic information system (GIS) data. The new capabilities allow remote sensing and GIS professionals to determine imagery changes over time – supporting applications like vegetation change, deforestation or urban planning.
Trimble technologies are also used in the construction, agricultural and transportation sectors. These offer great long-term potential for increased adoption of climate solutions, as penetration rates are relatively low. Trimble has generated solid returns over time, and we see further market consolidation opportunities and increasing recurring revenue – which further support the investment case.
AGCO
Finally, smart farming is another effective method of preserving our forests. Productivity-enhancing solutions in agriculture are helping to improve resource efficiency and reduce our environmental footprint – while also advancing the competitiveness of farmers. AGCO focuses on the development of innovative agriculture equipment to mitigate climatic shifts due to rapid urbanisation and deforestation. AGCO helps farmers to leverage advanced technology, such as GPS and telematics, in tractors to enhance the agricultural productivity in the global market.
There is major potential in smart farming, which is already proving its worth in delivering more sustainable agricultural production. With the agricultural sector just beginning on its path of innovation, investors have a rare opportunity to share in the long-term growth of an industry able to have a positive impact on preserving our planet’s vital resources.
Henning Padberg and Thomas Sørensen, portfolio managers of the Nordea 1 – Global Climate and Environment fund. The views expressed above are their own and should not be taken as investment advice.