Green Investment: Teak Reforestation

While I’m in the television studio next week, I plan to shoot a video on what may be the single most interesting investment concept in sustainability I’ve come across this year: teak reforestation. Consider a few basics:

Hardwoods, especially teak, can only become more valuable as the world’s population of consumers grows, coupled with heightened restrictions on logging. So along comes a company that says, “OK, buy some trees from me. I’ll plant them, tag them with unique GPS coordinates, care for them for their 20-year lives, and guarantee to replace any that die prematurely. At their maturity, I’ll fell them, process them, and sell the wood for you. You make an attractive rate of return, since your asset is literally growing every day.”

I think of this as akin to investing in precious metals that miraculously expand in volume over time.

I also think of it as an extremely clear choice for folks in socially responsible investing (SRI); it’s hard to imagine anything greener than planting trees.

So where’s this forest, you ask? Columbia.

Oooookay, you say, the murder capital of the world?

As it turns out, the violent drug era in Colombia ended well over a decade ago. Medellin now has a lower crime rate than Baltimore or Atlanta. Bogota is now a safer city than Washington, DC. Columbia gets a high “investability” rating from HSBC Private Bank; its GDP growth has remained constant for over seventy years, and has had single digit inflation since 1999.

Plus, Columbia has near-perfect weather, and teak grows appreciably faster there than Indonesia, Thailand, Burma, the Philippines, and the other large producers.

I like these people, and I LOVE this idea.