The use of SPVs positions TPS as an ’impact company’, meaning that it uses capital from the financial market to promote sustainable reforestation rapidly. This strategy is in demand globally by investors and institutions and contributes to climate action and sustainable development in line with recommendations from the IPCC and FAO. The benefits of the strategy include:
1. early dividends: by selling standing timber, TPS can generate profits earlier, enabling dividends to be paid to shareholders before the forest is ready for harvesting.
2. reinvestment in new plantings: Proceeds from the sale are used to finance additional tree planting, benefiting both the environment and shareholders.
3. increased potential: Selling trees by the root allows for more sales opportunities during a tree’s growth cycle, which can lead to TPS doubling its tree planting at each sale.
4. Continuous income: Selling trees as securities generates regular income, providing risk sharing and returns for TPS and its primary asset managers.
