20 million

Combating climate change

New finan­cing models and inno­va­tive solu­ti­ons based on entre­pre­neu­rial princi­ples: Brainforest’s novel approach to achie­ving global CO2 targets.

It has long been scien­ti­fi­cally clear that forests have tremen­dous poten­tial to bind CO2 from the atmo­s­phere. Unlea­shing this poten­tial, howe­ver, will take a concer­ted effort – and fresh ideas. Science shows that it is achiev­a­ble – as the non-profit asso­cia­tion Brain­fo­rest aims to demon­strate. As an impact venture studio for forest and climate, Brain­fo­rest deve­lops sustainable solu­ti­ons for more forest and a better climate. Two such solu­ti­ons are already taking shape. The Xilva AG is deve­lo­ping a global online market­place that ‘offers poten­tial inve­stors a trans­pa­rent, simple and inno­va­tive way to invest in forest projects, making it signi­fi­cantly easier to obtain CO2 certi­fi­ca­tion’, explains Susanne Wittig, co-foun­der of Brain­fo­rest. Howe­ver, the focus on CO2 is only the begin­ning. ‘Our acti­vi­ties expli­ci­tly centre around forests, inclu­ding all their ecosy­stem services,’ she says. The second venture is the Ecosy­stem Value Asso­cia­tion (EVA), which aims to create a digi­tal forest climate stan­dard. Wittig points out: ‘The aim of EVA is to deve­lop stan­dards for the evalua­tion of ecosy­stem services, as well as to make those services visi­ble and further­more enable them to be used econo­mi­c­ally – in other words, to set econo­mic incen­ti­ves in order to fight climate change.’ The first stage focu­ses on the crea­tion of a climate stan­dard for the refo­re­sta­tion of defo­re­sted areas in Germany due to climate effects. The inten­tion is that by the end of this year, German forest owners will be able to bene­fit econo­mi­c­ally from their role in curbing climate change through CO2 certification.

Brain­fo­rest has also taken a unique approach to finan­cing, combi­ning both phil­an­thro­pic capi­tal and impact invest­ment capi­tal, as the two comple­ment one anot­her. ‘Phil­an­thro­pic capi­tal serves as our venture capi­tal,’ explains Wittig. In order to take an inno­va­tive approach to tack­ling climate change, orga­ni­sa­ti­ons must have the courage to expe­ri­ment. Howe­ver, rege­ne­ra­tive busi­ness models, for example, are often rese­arch-inten­sive and do not appeal to tradi­tio­nal inve­stors. Here, dona­ti­ons can help faci­li­tate invest­ment in ‘impact first’ ventures. ‘It means that the project attracts more invest­ments – which ulti­mately enab­les the venture to have an expo­nen­tial impact,’ notes Wittig. Clari­fi­ca­tion is requi­red in advance as to whether it is a dona­tion or an invest­ment – ‘This distinc­tion line is drawn with the incor­po­ra­tion of the venture,’ she says.

The idea for a solu­tion to the deve­lo­p­ment and estab­lish­ment of the busi­ness model starts in the Brain­fo­rest Venture Studio. Dona­ti­ons and returns from the ventures fund the tax-exempt asso­cia­tion, allo­wing impact invest­ment capi­tal to further circu­late with each inde­pen­dent venture foun­ded. This type of broad finan­cing makes the pioneer projects attrac­tive to a wide range of inve­stors and back­ers, with the first being the Migros Pioneer Fund. The studio has since attrac­ted funding from foun­da­ti­ons, private inve­stors, family offices and a sustainable bank. It is hoped that in this way, Brain­fo­rest will enable 20 Million hecta­res of addi­tio­nal forest absor­bing more than 3GT CO2 by 2050. 

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