Interest in FSC certification-scheme ecosystem service credits and natural capital is growing rapidly on Europe’s green investment market. The main driver is no longer simply companies’ desire for good marketing, but strict European regulations that require corporations to report on their environmental impact. Let us look at the main groups of investors and funds currently most active in buying into and financing these projects in Europe.

Corporate environmental and sustainability buyers – ESG

These are large companies that, under the European Union’s new Corporate Sustainability Reporting Directive (CSRD), are required to report in detail on their impact on biodiversity and ecosystems.

These are technology giants, retail chains, logistics and packaging companies, such as Tetra Pak, Kingfisher and others. Rather than simply buying carbon credits, such huge companies want to invest in premium nature projects. The FSC ecosystem certificate gives them a guarantee that the money they have invested has genuinely produced a measurable gain in biodiversity, for example rare species preserved or improved water quality in a particular region.

Specialist natural capital and climate funds

Several large investment funds operate in Europe that purposefully buy forest land or conclude long-term agreements with private forest owners to develop ecosystem services.

Climate Asset Management is a UK fund, a joint venture between HSBC Asset Management and Pollination, which invests in projects that combine profit with nature restoration.

Mirova is a French asset management firm belonging to the Natixis Investment Managers group, which has dedicated natural capital and biodiversity funds (the Mirova Land Degradation Neutrality Fund). These invest in sustainable forestry across Europe.

Timberland Investment Management Organizations (TIMOs) are traditional forest investment funds – for example, Europe’s largest pension funds working with specialist managers – which are now channelling part of their forest portfolios purely into developing ecosystem services, so as to earn returns not from timber harvesting but from nature-conservation credits.

“Green” banks and institutional investors

Institutions such as the European Investment Bank (EIB), with its nature-restoration financing instruments, are becoming increasingly active in carbon-sequestration and biodiversity projects.

Commercial banks too, such as those operating in the Nordic and Baltic region, are starting to offer more favourable loan terms or direct investment to forest managers able to present internationally verified ecosystem service statements.

The five approved FSC certification-scheme impact categories

Although the field of ecosystem services is theoretically broad, the official FSC procedure (FSC-PRO-30-006) defines 5 main categories in which a forest owner can claim and have verified a positive impact.

Biodiversity conservation (Biodiversity Conservation). Measures that protect natural forest habitats and rare species, increase the volume of deadwood, or restore natural forest structure (for example, by preserving groups of old trees).

Carbon sequestration and storage (Carbon Sequestration and Storage). Changes to forest management practice that increase the carbon stock in forest biomass and soil, for example a switch from clear-felling to selective felling, or lengthening the rotation period.

Watershed services (Watershed Services). Regulation of water quality and flow, for example widening protection buffers along rivers and lakes, or restoring forest wetlands that prevent floods or drought and filter water.

Soil conservation (Soil Conservation). Preventing soil erosion and preserving nutrients. This is especially relevant in mountainous areas or regions with unstable soil, by limiting the use of heavy machinery during sensitive periods.

Cultural and recreational services (Recreational Services). Maintaining the social and tourism value of forests, for example creating infrastructure for the public, preserving aesthetically valuable landscapes, or protecting historic sites within forest areas.

Approximate costs of an FSC ecosystem services audit

Ecosystem services verification is not a separate, standalone certificate – it is an add-on that can only be attached once a forest already holds a valid primary FSC forest management certificate. The costs consist of two main components.

First comes data collection and expert work to prepare for the forthcoming audit. Before the auditors arrive, a methodology has to be developed and baseline measurements taken.

For small and medium-sized holdings of up to a few hundred hectares, this costs between EUR 2,000 and EUR 5,000. At this stage it is usually necessary to hire a certified forest inventory specialist or nature expert, who prepares the official impact declaration and describes the chosen indicators. For large estates or group certificates, costs can exceed EUR 10,000, since more complex calculations are required, such as precise carbon modelling or remote sensing.

The second step is the independent audit, or verification. The audit is carried out by accredited certification bodies such as Step Up Certification, SGS, BM Certification, Preferred by Nature and others. The auditor’s fee in this case typically ranges from EUR 1,500 to EUR 3,500 for the initial audit.

If the ecosystem audit is combined with the annual routine FSC forest audit, the costs are lower, since there is no need to pay for a separate visit and travel expenses – it is simply extra working hours on site. Each year, during the routine audit, the auditor checks whether the positive impact is still being maintained – an additional cost of around EUR 500–1,000 added to the annual audit invoice.