Empowering Natural Capital while driving financial returns

As small as they may be, paper straws are a compelling example of how a simple change can create significant impact. Whether at public gatherings, restaurants or in our homes, they have widely replaced the use of plastic straws in many regions around the world. On a broader scale, whether through regulation or collective effort, products made from environmentally harmful materials are increasingly being replaced with bio-sourced alternatives. At the heart of this transition is wood, a material that offers great potential for a more sustainable future. However, if not managed responsibly, its extensive use could also endanger biodiversity and jeopardize the success of this virtuous movement.

The early 2000s saw the birth of an ongoing transition to replace non-recyclable materials with more sustainable alternatives. While the use of plastics surged after the Second World War, as a result of globalization and technological advances, more than 350 million tons of plastic¹ waste are now generated globally each year, accumulating in the oceans and on landfills.

In construction, steel and concrete, that once powered the industrial revolution, are now being reconsidered in view of climate change due to their high greenhouse gas emissions or lack of resilience to extreme temperatures.

To address these issues, we are turning to one of the world’s oldest natural resources: wood, which offers a range of alternative benefits. Wood-based paper packaging improves food preservation, wood-based insulation offers great long-lasting thermal resistance, and timber constructions can reduce greenhouse gas emissions by up to 60%² compared to conventional building materials.

 “Wood is one of the most incredible sources of intelligence when it comes to Co₂” says Umberto Napolitano, Architect and Founder of LAN Architecture. The firm recently conceived Paris’ Wood Up project, one of Europe’s tallest timber apartment buildings. Trees absorb a considerable amount of Co₂ during their growth and continue storing it once turned into building material. To make sure forests don’t lose their capacities, the firm adopted a method in which for every tree logged, another one is planted.

“And the leftover parts of the structure were used to design furniture for the common spaces. There’s a fun aspect to it, and it also shows what I believe is one of main points of sustainable ecologies: it leaves space for creation” Umberto Napolitano explains.

Wood Up is made of beech, spruce and Douglas-fir, drastically reducing the use of metal. In a short-circuit approach, materials were sourced in French forests and, for the most part, transported by boat on the Seine River bordering the building.

According to Umberto Napolitano, such projects not only prove wood’s remarkable properties such as fire resistance, acoustic performance or mechanical strength, they also set new standards for industrializing sustainable practices and embrace a new construction culture, powered by appealing esthetics.  

When it comes to wood, our expectations have no limits. Its possibilities are so remarkable that it is already being considered for use in aerospace construction, addressing the challenge of non-degradable metal debris polluting our atmosphere. Scientists at the University of Kyoto have developed a magnolia-based satellite that has demonstrated resilience to both radiation and extreme temperatures, disintegrating upon its entry back into the atmosphere. A promising perspective to push sustainable practices into a highly innovative sector.

But as wood can now hypothetically take us as far as space, how can we normalize its use without straining forests to exhaustion? A 360° question that not only affects biodiversity but also local populations whose well-being depends on the land, as well as local economies and global industries.

For over 30 years, the International Woodland Company (IWC) has dedicated its work to sustainable forestry and timberland investment, managing forests and lands under strict criteria that guarantee balanced approaches and foster climate resilience. “Sustainable forestry today means managing land for different functions” says Asger Strange-Olesen, Global Head of ESG – AM+ IWC.

IWC operates using a concept known as mosaic forests: timberlands that combine logging parcels and cultivation areas of different species, enabling ongoing production while preserving biodiversity.

Forest management is then audited by third parties to ensure compliance with best practices including Forest Stewardship Council certifications, guaranteeing sustainable processes, from land harvesting to supporting local communities and economies.

“You have to be very close to the land that you are managing. Understand its processes, understand where you have risks in terms of dieback or pests, but also understand how you can optimize production where that’s possible” Strange-Olesen explains.

This approach creates a win-win scenario, where carbon offsetting and forest resilience can also be monetized- with a little help from finance.

BNP Paribas Asset Management (BNPP AM) has long been committed to advancing the preservation of Natural Capital, which encompasses all natural resources that both humans and ecosystems rely on – from air to water, soil, living species and minerals. “Today, half of the global GDP is moderately or highly dependent on these resources” says Saulé Ualiyeva, Senior Project Strategist for Private Assets and Solutions at BNPP AM. “Our collaboration with IWC has deepened our understanding of how sustainable forestry can serve as both an economic asset and a powerful tool for climate mitigation.” By partnering with companies like IWC, BNPP AM can leverage its expertise in forest management, ensure both biodiversity preservation and potential long-term economic returns in a scalable sector. Like a ripple effect, a shift of focus grounded in nature can plant a seed for a sustainable future, in which financial returns go hand in hand with land preservation and benefit local communities.

[1] https://www.weforum.org

[2] https://news.oregonstate.edu