Company Worth Watching: Blue Forest Conservation
With wildfires and drought increasingly threatening the western United States, it’s easy to wonder: how can we preserve America’s forests? Blue Forest Conservation (BFC), a current Larta USDA CAP company, funds forest conservation through the Forest Resilience Bond, an intersection of private investors, utilities, and public institutions. Larta sat down with Nick Wobbrock and Leigh Madeira, partners of BFC, to learn how private capital can fuel public good.
BFC was founded when “a Peace Corps volunteer and a Wall Street bond trader walked into a bar together.” Since then, BFC’s success has been driven by a novel approach to sustainability that was conceived, as Nick tells us, fromdifferent skillsets but shared values. The model is simple: the Forest Resilience Bond creates a vehicle for private stakeholders to invest in underfunded public conservation projects. Financial engineering on BFC’s part targets and funds previously permitted public projects, providing a return to investors. As a Public Benefit Company, BFC has created a firewall ensuring that private investors don’t determine the projects that BFC undertakes, and that the direction of forest restoration is driven by public need.
BFC is at the forefront of climate resiliency, simultaneously exploring and building the market for proactive forest restoration in order to respond to a growing need. In California alone, there are an estimated six to eight million acres of forest in need of restoration. Nationally, an estimated 60-80 million acres of forest needs restoration. Each acre costs roughly $1,000 to restore, amounting to tens of billions of dollars in needed investment. Scientists and innovators have provided technical solutions to issues in forest restoration, but across the United States, backlogs of approved but incomplete conservation projects have mounted due to lack of funding. BFC is striving to kickstart these projects by raising private capital for restoration efforts that public funds alone cannot support.
BFC's approach to growth is two-pronged, targeting both public and private interest groups. BFC has built credibility through establishing public trust and demonstrating how forest restoration can be profitable for investors and private stakeholders. Because the Forest Resilience Bond lies at the intersection of public and private stakeholders, the founders have learned to “speak the languages” of investors, government entities, utilities, local communities, non-profits, and other key players.
BFC has proven dynamic enough to overcome typical hurdles of start-up growth. In November 2017, the company celebrated a public endorsement with the US Forest Service (USFS), further cementing their credibility. The national Memorandum of Understanding between USFS and BFC is the first ever of its kind with an investment entity. The engagement process has been long, and after 3 years of informal partnership, this strong MOU functions as a license to operate, confirming confidence in BFC's approach and ability to succeed in its mission.
Though every startup’s journey has its own challenges, BFC’s road to commercialization has been hugely successful, creating financially and environmentally sustainable social good with guidance from Larta’s advisors and the USDA CAP program. BFC is envisioning a different future for forest restoration and upholding Larta’s mission to use business and technology to feed, fuel, and heal the world. We will continue to watch Blue Forest Conservation's journey and you should follow along as well by visiting www.blueforestconservation.com.