We’re at London Stock Exchange studios for the latest in a series of broadcast interviews with Business Worldwide Magazine.
Sustainable forestry is becoming an increasingly popular asset class with investors in the continuing low interest rates environment, and amid volatility in both equity and debt markets, investors are inevitably looking for new opportunities.
Certainly Japan, China and India are all interested in the forestry sector as demand for timber has jumped exponentially.
So how is it possible to combine investment in environmental, social and ethical concerns so everyone benefits? Well who better to explain this conundrum than Rino Solberg. Rino is CEO and Chairman of Better Globe Forestry. We shall be taking a more in depth look about the group’s aims, passions and success since beginning its operations in the area of sustainable forestry management in Africa and also touching on why the sustainable forestry models are now so attractive. So, Rino, welcome.
Business Worldwide Magazine: Tell us a little bit more about Better Globe Forestry and what it is that makes your tree planting sustainable.
Rino Solberg: The difference is that most other forestry companies, they work with only one process. They plant trees, take care of them for some years and then they sell it to the process industries.
The downside is here the fluctuations in the market, for example in the paper industry and the building industry.
Better Globe Forestry, we are a market-driven company and we plan to process all our trees into furniture, floor tiles and unique products like, for example, this wooden watch that I have here which is a Better Globe watch. And we do this to avoid fluctuations. We will first and foremost export everything, we will do the marketing ourselves and we will own all the processes in a sustainable manner.
Business Worldwide Magazine: Can you explain in more detail how the business model actually works?
Rino Solberg: We have actually two business models. One works much like a crowdfunding system where people and companies can buy one tree or they can buy thousands of trees and they have a buy-back deal which is fixed 15 to 20 years ahead and they get 12 times the investment back over the 20 years, starting with year 5.
In fact, we have done this since 2006 and it works very well. It is also called impact investments, by the way.
The other model is something we call ‘trees for shopping’ and that is an online loyalty programme. People can buy things online, it can be anything from a house and a car to food, clothing and travel, and 25% of whatever they bought will be paid back to them cash, the 15th year.
Simply explained is that our online business partners, they take a little percentage of whatever the customer buys and buy trees from Better Globe Forestry and Better Globe Forestry in turn buy the trees back from their customers the 15th year, equal to approximately 25% of what they have purchased.
So millions of people will actually own Better Globe trees without even paying for them. That, I think, is probably the most or the best customer saving programme in the whole world.
Business Worldwide Magazine: What do you perceive the risks to be associated with forestry investing in Africa, Rino? Is there anything investors should bear in mind when weighing up this type of investment?
Rino Solberg: No investment is risk-free whether it’s in Europe or Africa, although in Africa it’s probably a bit more risk due to corruption among other things.
However, there are also many other risks in Africa but any risk can be mitigated if you know them and in fact Better Globe Forestry, we spent two years just to get to know the first tree that could produce what we wanted it to produce in 15 to 20 years before we sold any trees to anybody. And the last 11 years, we have worked to mitigate all the risks we can think of together with the Kenya Forestry Research Institute, the Forestry Laboratory of Ghent in Belgium, ICRAF, the World Agroforestry Centre, not to mention the Kenya Forestry Service which is the government in Kenya, just to mention a few.
Business Worldwide Magazine: Why do you reject the common practise of taking loans from banks and selling shares in your own company? Do you think this helps you avoid the insolvency that many African forestry companies have experienced?
Rino Solberg: Well, we like to be independent and in control, that’s why we reject fastback investors because our payback is timed and planned at 15 to 20 years ahead, and Better Globe Forestry is a totally debt-free company today and we like to keep it that way so we can plan and work in peace in order to eliminate insolvency and bankruptcy.
Business Worldwide Magazine: Can you outline the company results so far and do you think that your particular philosophy has underpinned your success?
Rino Solberg: Over 13 years in what I call just the pilot project, we have planted 1.5 million trees and we have seen to it that more than 5,000 families are out of extreme poverty. We have passed 10,000 children through school.
In the years to come, we will plant 9 billion trees, we will help millions of poor farming families out of extreme poverty and millions of children will be helped through school.
We also have a micro finance system that kickstarts the poor farmers’ entrepreneurial skills in our particular philosophy with massive tree planting for business, micro finance for the poor farmers help and the education of children in order to fight corruption, definitely our philosophy is all it takes.
Business Worldwide Magazine: As a social enterprise, Better Globe Forestry is helping in the fight, of course, to eradicate poverty in Africa. However, you’ve chosen education and the empowerment of rural farming communities as your goals, which is a little bit different. How are these two strategies complementing your own business model, also tackling corruption? Can you explain and expand on that a little for us?
Rino Solberg: Well, let me make one statement first. Nobody will ever be able to eradicate poverty or corruption in Africa totally. That we haven’t even done in Europe. However, we will eradicate poverty one farmer family at a time and hopefully in some years many farmers will be out of poverty and Africa will be a better place for poor farmers.
When it comes to eradicating corruption, that might be a pipe dream. However, we have found a way which we think is the only way to fight corruption, starting with the children at 3 or 4 years of age and then teach them integrity in order to fight corruption long-term.
In fact, I have written a book describing that, how to eradicate poverty, which I have here. This is called Social Entrepreneurship The Better Globe Way and that helps the farmer eradicate poverty. I also have written another book, I don’t have it here but it is called Put Integrity First, which explains how to eradicate corruption.
We also publish two magazines. One is called Miti, it means ‘trees’ in Swahili and it is the tree farmers’ magazine for Africa. This is to teach the farmers on the ground how to make more money on trees. Another publishing we do is that we publish a free children’s magazine. It is called Bingwa Magazine and it’s fighting corruption through building integrity in the children of Africa and that magazine is a free magazine, we give them to schools and in fact each magazine is read by approximately 100 children. My goal is to be able to publish one million copies so we can reach 100 million children and eventually that way eradicate corruption in Africa.
So Better Globe is here to stay because we have found a better way.
Business Worldwide Magazine: So, Rino, a fascinating insight. We could talk for hours but sadly we’re out of time. Thank you very much.
Rino Solberg: Thank you very much, Glen.