Remy: Institutional investors are increasingly looking beyond traditional real assets toward natural capital, but passive timberland management is leaving financial returns and ecological value on the table. As capital shifts toward working landscapes, a new generation of investors is providing active ownership alongside biodiversity gains, which can directly drive operational performance when it comes to commercial forestry.
We're joined live here at the New York Stock Exchange to describe and explain how an active mindset is transforming forestry investment. Christian Wachtmeister, Investment Director at Qarlbo Biodiversity, joins us. Great to have you here. Thank you so much for joining me.
Christian Wachtmeister: Thank you, Remy. Great to be here.
Remy: Well, here in New York City, the UN General Assembly is taking place, but it is also Climate Week. So first and foremost, when it comes to forestry management, tell us what's happening and what you think needs to be done.
Christian Wachtmeister: Traditionally, forest management has mainly been about wood production, the timber. And what is now happening is that we see an increasing interest in adding additional layers into forest management. At Qarlbo Biodiversity, where I work, we actively integrate carbon sequestration and biodiversity uplift and find various ways to get paid for that through biodiversity credits, carbon credits and other mechanisms, basically adding diversified revenue streams to the traditional timberland model.
Remy: And for the layperson out there who is watching right now and may not be as familiar, what does that key word active actually mean when it comes to management?
Christian Wachtmeister: For us, it's very much about actively integrating conservation and restoration measures into the timberland, the production landscapes. It might be things like setting aside more than is required by certification and legislation, and also doing measures such as creating more dead wood, doing prescribed burnings or implementing actual concrete measures that are good for biodiversity.
Remy: And when we hear about biodiversity, there are so many myths out there. So can you first dispel some of the myths and separate some of the signal and the noise?
Christian Wachtmeister: Yes. Biodiversity is maybe hard to define because it's everywhere but yet hard to touch, but it's the basis for life on Earth. Unfortunately, biodiversity has been declining globally, and we see production forestry as a good way to reverse that because production forestry covers a lot of land on Earth, and that's a great start to improve biodiversity in a scalable and profitable way.
Remy: Yes, and I think profit as well as value is part of the key equation here, especially when it comes to management, especially when we're talking about timberland. But can you give us a sense of what the mission is for Qarlbo?
Christian Wachtmeister: So the overarching mission is to make biodiversity investable because we think that we need to put a price on nature in order to recognize its true value. Otherwise, it's taken for granted and it's treated as a free good, and we want to put a price on it so that people recognize its value and that you can create the right incentives to actually restore and protect nature.
Remy: So I do want to expand on that. You mentioned incentives and we're here at the New York Stock Exchange. We think about all the publicly listed companies here that are working on their own measures when it comes to whether it's the E, the S or the G of ESG. But given the real impact here on the ground, I'm sure you're having a lot of conversations here at Climate Week with stakeholders. Give us your sense of the incentives that you think are necessary and why.
Christian Wachtmeister: Yes, I think it's very important to create the demand for the payment for what we call ecosystem services. Either corporates or others are willing to pay that extra premium to actually incentivize landowners like ourselves and others to do those extra measures that can improve biodiversity. That may be through corporate value chains.
Regulatory clarity would also be helpful to create that. I think it's important we talk about the regulatory landscape because we are here in New York, but when we look at nation states around the globe, we know that depending on the region as well as the country, the regulatory landscape differs.
Remy: So what is working, what is not, and what is different about what Qarlbo is doing?
Christian Wachtmeister: Yes, we work with both mandatory and voluntary frameworks. So in some countries like the US, there's a regulatory market for nature in various ways. In the UK, for example, as well. In Europe, there's work towards harmonization and finding rules for this, but in parallel to that, we work with voluntary measures as well, such as voluntary biodiversity credits for which we have developed our own biodiversity credit methodology.
Remy: And finally, before I let you go, it is all about the numbers as well as the reality in the data out there. So how would you say that management as well as biodiversity actually directly affect asset valuations as well as revenue?
Christian Wachtmeister: For us, it's a way to create more healthy and profitable forests in the longer term, increasing the value of those assets. And also creating a more diversified and resilient revenue stream by adding biodiversity and climate financing to the underlying timber income, thus creating a more profitable and resilient property.
Remy: And one more question because you mentioned that keyword resilience. We're talking about the environment, the economy or even the stock markets here. I think resilience is the key word. So at Qarlbo, what is the key vision as we look not just five years but even decades from now?
Christian Wachtmeister: We want to contribute to making biodiversity investable and create biodiversity uplift at global scale, be it in forestry, agriculture and other parts of the ecosystems, and by driving market based solutions for that to create financial incentives to improve biodiversity globally.
Remy: Well, Christian, thank you so much for joining us here during your visit to New York City and during Climate Week. Appreciate it.
Christian Wachtmeister: It's been a pleasure to be here. Thank you very much.
Remy: Thank you.
