After decades of near total fire suppression, many forests in the western U.S. are significantly overgrown. Combined with effects of climate change, forests are increasingly at risk for wildfires. The Forest Resilience Bond (FRB) attempts to combat this risk through acquiring private capital to finance the upfront costs of forest restoration.
The FRB is a financing mechanism developed by the Blue Forest Conservation in partnership with the World Resources Institute. Without the FRB, it would take years to plan, approve, obtain permits and complete forest restoration projects due to U.S. Forest Service budgetary constraints. During this time, the forest is at a severe and immediate risk of destructive wildfires. The FRB fast-tracks these projects by raising the capital now to decrease the risk of severe wildfires and to protect air quality, water supply, rural communities and habitat.
The FRB collects capital from the multiple beneficiaries of the restoration, including the U.S. Forest Service, State of California, and Yuba Water Agency, which share the cost of reimbursing investors over time.
The U.S. Forest Service has identified 58 million acres in need of restoration nationwide. Investment through the FRB will kick off a forest restoration project protecting 15,000 acres of forestland in the North Yuba River watershed. Ecologically based tree thinning, meadow restoration, prescribed burning and invasive species management will return the forest to a healthy density, creating social and environmental benefits. The FRB fosters collaboration among a number of stakeholders to create a sustainable solution to an unsustainable problem.
Praxis Mutual Funds® supports programs such as those provide by the FRB through investments in Calvert Impact Capital, an impact-investing institution that helps people around the world through community development financing. It’s part of the Praxis commitment to place approximately 1 percent of each of its funds to benefit neighborhoods and individuals through community development investments.