In May 2025, Impact Investor magazine ran a story about a forest purchase by an Australian investment company in the Lao Peoples Democratic Republic (Lao PDR or Laos).
New Forests had bought a majority share in Burapha Agro-Forestry, a timber plantation forestry company in Laos. Burapha Agro-Forestry own 6,000 hectares of plantation forest, “conservation areas”, a plywood mill, and a carbon-credits project. New Forests was reported as saying they aimed to “develop an integrated and scaled investment allocation in Laos… and… boost the socio-economic benefits for local communities” with Burapha Agro-Forestry reported to have said they would “create a plantation base large enough for Laos to develop as a leading forest industry nation (and) support the long-term protection and reforestation (for)… current and future generations” [1].
Since I work on projects in Laos it made me curious – what exactly was impactful about this investment? And for whom?
Forests cover is essential for generating clean air, critical in a world where 97% of people are breathing dirty air. Air pollution remains the greatest environmental threat to human health and is the second leading global risk factor for human death [2]. Additionally, the physical and mental health benefits of connection with nature and forest bathing are now well researched [3]. A forest deal clearly has wider impacts than profit margin for a company or dividend returns for investors – trees matter for human health, wellness, death, and illness.
Let’s dive in.
Who’s Involved?
NEW FORESTS is the brand name for a group of companies: New Forests Pty Ltd; New Forests Advisory Pty Ltd; New Forests Asset Management Pty Ltd; New Agriculture Pty Ltd; New Forests Australia and New Zealand Managed Fund all of which are registered with the Australian Securities and Investments Commission. New Forests Asia (Singapore) Pte Ltd is registered with the Money Authority of Singapore.
New Forests have B Corp status [4]. B Corp is a non-profit organisation that created a set of standards for businesses to self-asses themselves for social and environmental performance, accountability, and transparency. Companies previously self-assessed every three years but new standards from 2026 will require year-on-year improvements from initial certification and at the 3/5-year mark. Verification will also move to third party independent assessment.
At date of this post, New Forests overall B Corp score was 102.4, with Environment and Community receiving the lowest share of these scores. For comparison, this was similar to a randomly selected financial advisory (Path Financial though Path’s overall score was higher at 120.4). A company with long record of environmental activism and circular economy, Patagonia, scored 166 with Environment and Community making the largest share of that score. B Lab does not state which New Forests company is the B Corp – all of them? One of them?
New Forests had AU$11.6 billion (US$7.7 billion) of assets under management across 4.2 million hectares on 30th June 2024 [5]. It was was founded in 2005, targeting institutional investors.
BURAPHA AGRO-FORESTRY [6] is a Lao-Swedish forestry company. The company creates and manages Eucalyptus plantations in Lao PDR. Their seedlings nursery is dominantly Eucalypts, with minor Mai Du (Rosewood), Teak and Acacia, producing 3,000,000 seedlings per year. The company’s pulp-mill creates plywood, exporting to Thailand, Vietnam, India and China. A railway linking Kunming in China with Vientiane (the capital city of Laos), passes close to plywood mill and a new highway opened in 2021, connecting the plywood mill to Bangkok port. The company’s products were plywood and laminated veneer lumber & board made from Eucalyptus and bonding materials (Phenol formaldehyde).
The company received a US$10million loan from Finnfund in 2016, which was still active in 2025 [7]. In 2022, the company requested US$9 million from a Land Degradation Neutrality Fund (LDNF) [8] to create new plantations up to 60,000 hectares, as well as a plywood mill. To enable that loan, the LDNF applied for a 15 year guarantee from the Multilateral Investment Guarantee Agency (at World Bank group) to cover the investment in Burapha against the risk of the government seizing land from the company or taking it indirectly [9].
COMMUNITIES own the land in Laos and the government manages it. There are a number of ways for the community to hold rights to land, including community land tenure and Village Land & Forest Management Agreements. Through these agreements, the government recognises the rights of villagers to protect, use, benefit from, inherit, and to be compensated for, land within village boundaries. Non-timber forest products are also important to rural household for food (e.g., bamboo shoots, tubers, forest fruits), shelter (rattan, bamboo), water (rivers), and cash income. In 2025, there was still a low to moderate potential for unexploded bombs (UXO) – remnants of the American war in Vietnam- during ploughing or burning in Laos.
Burapha Agro-Forestry employ community villagers on plantations in their locality (e.g., for brush clearing; fertilizing; thinning). Work is casual, seasonal and dependent on the stage of the plantation cycle. In 2022, the pay rates exceeded the Lao minimum wage. Household employment on the plantations vary, from very high to very low across participating villages. While intercropping of agricultural crops by villagers in plantation year 1 is potentially 100% available (at villagers’ own expense), participation in intercropping varies from very high to very low, for reasons of: villagers having sufficient rice production elsewhere; poor topsoil after mechanical vegetation clearance; didn’t know about it. Most villagers keep animals (chickens, buffalo, cattle, pigs) but grazing might only take place in those villages close to plantations and with suitable grass [9].
ECOLOGICALLY, tropical soils in the area are fragile. Swidden agriculture (prolonged clearing and burning of vegetation) and other developments expose soils to wind erosion during the Dry summer months and to heavy monsoon rain erosion during the Wet. Soils are thin, acidic and nutrient poor, with low water holding capacity.
A dominant feature of the area is the Nam Ngum river Reservoir, which was dammed for hydro-electric affecting river catchments in the plantation areas. Floods and droughts frequency is linked to the seven-year alternating cycle of El Niño (warm – drought) and La Niña (cool – heavy rain) conditions in the Pacific Ocean and there have been four major droughts in the past 30 years. Temperatures are predicted to increase by 1.4 °C to 4.3 °C by 2100 and rainfall in the plantation areas to increase by 13.5% (from 1.5 meters to 1.7 meters) by 2030 with less rain in the Dry season.
Land types across the plantation areas is mixed (see table) and home to many species of snakes, birds, mammals, lizards, and amphibians including endangered species. Air quality is generally good except during periods of widespread burning (for agricultural or plantation purposes) as well as receiving windblown smoke and ash from regional burning [9].
| Modified Land (types) | Undisturbed Land (types) |
| Fallow forest; Barren land; Deciduous/evergreen plantation; Agricultural cropland; Rice paddy; and Settlement/built up areas. | Bamboo; Coniferous forest; Dry dipterocarp forest; Deciduous forest; Evergreen forest; Grassland; Mixed coniferous / broadleaf forest; Gallery (riverside) forest; Waterways & aquatic habitat. |
Eucalyptus trees are fast maturing and can be harvested between 3-12 years of age. They are suitable for pulping to make paper and industrial products. The trees require targeted and intensive management to make them commercially viable including eradicating pests and diseases, mitigating risk of fire and intense weather events. Areas for planting is cleared and then weeded. Fertilizers and pesticides are applied to the seedlings. Follow-up weeding and fertilizing is on-going for fast growth rates. Spacing of trees at planting, any thinning of the growing seedlings, and timing of final harvest are strongly controlled by market forces. In general, many trees with less thinning and an early final harvest makes thinner logs that can be used for biomass or pulp logs. Less trees, more thinning and late final harvest means that the trees will be cut down and sold as saw logs [6]. The reputation of Eucalyptus is that it uses more water than other trees, though some evidence suggests that water uptake is at least equal to other types of plantation trees (e.g., pine, birch) [10].
The Deal
New Forests created a fund called Tropical Asia Forest Fund 2 (TAFF2). The fund is a private limited company registered in Singapore since 2020 [11]. Its #2 because a first Tropical Asia Forest Fund by New Forests was created in 2012 to buy equity in companies growing and selling tropical hardwood, timber processing, and some conservation activities in Indonesia, Malaysia and Laos.
The TAFF2 pools money from different sources. These include the Asian Development Bank, the Australian Government’s Climate Finance Partnership, David and Lucile Packard Foundation, Sumitomo Mitsui Trust Bank and Mirova. Mirova (an asset management company based in Paris) also manage the Land Degradation Neutrality Fund (see earlier).
I acknowledge that my understanding of the deal is limited, but it seems that a fixed number of shares are available for investors to buy thereby creating a pool of money for TAFF2 to buy shares in companies like Burapha Agro-Forestry. Two types of shares are available – Class A for commercial investors and Class B for philanthropic investors. Most shares are Class A for investors who receive commercial rates of return (12-16%) and less are Class B for impact investors for a lower return (estimated around 4-8%). Presumably there are other differences like different minimum purchase and management fees attached to each class. Regardless, both types of investors are investing in both the commercial and the conservation/climate impact activities of the companies acquired by the fund. New Forest co-created the fund’s structure with the David and Lucile Packard Foundation [12]. TAFF2 aims to make money from sales of timber, rubber, and carbon credits.
Is it Greenwashing?
This deal shows the diversity and complexity of private climate finance : the large variety of players involved; complex money flows; lack of clarity on the details….
I have previously said that greenwashing is about belonging as well as inequality so let’s finish with a quick look at each of these.
BELONGING: The deal creates connection and mutual benefit between New Forests and institutional investors, which is the founding mission of New Forests. It also creates a deeper link with philanthropic investors since the Packard Foundation worked with New Forests to structure the fund. Relationships with existing lenders like Finnfund are unclear.
INEQUALITY: Financially, all investors get a money back though commercial investors are prioritised for financial return over philanthropic investors. Philanthropic investors get a desired impact in the form of carbon sequestration and a return on capital to pay for more philanthropic ventures in the future.
It’s unclear what the impact on Burapha Agro-Forestry company will be. Changes in ownership will presumably influence management (since the point of buying a majority share in the company would be to make the company more profitable) but what those changes are/will be and how they will impact current staff is unknown. The portion of ownership that the initial owners retain is also unclear. If the company profitability increases this presumably increases monetary benefits to the owners. It also makes the company more visible to government for under-the-table payments and increased time/money allocated to relationship management with important government departments. An interesting sidenote hints at these relationships – in 2016 an independent environmental assessment identified plantation land as inside a conservation protected but investigation by Burapha with the Lao Army Battalion that managed the protected area found that Burapha’s plantation was in fact, outside it [9]. Crony capitalism is prevalent and a known risk in the region [12].
Community gains are inequitable – they have lost access to land for a generous period of time, of which they have restricted access for cropping and grazing should they wish to do so. While plantation jobs are a useful source of income for villagers, contracts are causal and rates of pay though higher than Lao minimum wage (in 2022, day rate was 50,000 kip (or US$2.3 per day) compared to minimum wage of 34,000 kip per day [9]) are drastically lower than investor returns.
Ecologically, while Burapha claim that protected land is not cleared for planting, the boundary seems to be malleable. There is also recurrent phrase of “degraded land” which is the justification for clearing sites to plant a non-native species (Eucalyptus). Classification of land as dedgraded may take place by negotiation between vested interests in addition to the physical state of the land. In the end, the term degraded is vague. By the end of 2022, Burapha had extensive land concessions (up to 66,000 hectares), which likely attracted New Forest attention for plantation expansion, but allocation of concessions have not been planted in other areas of the country because of community resistance [13].
Based on this very brief foray into a complex deal, to the extent that a sin of greenwashing is Diverting attention away from a company’s destructive actions by making vague statements, it does look like greenwashing is involved here.
References
[1] Impact Investor (2025) New Forests Fund Buys Stake In Timber Plantation Firm In Laos https://impact-investor.com/new-forests-fund-buys-stake-in-timber-plantation-firm-in-laos/
[2] IQAIR (2025) 2024 Annual World Air Quality Report: Region and City PM2.5 Rankin Switzerland https://www.iqair.com/in-en/world-air-quality-report
[3] Vermeesch et al (2024) Shinrin-Yoku (Forest Bathing): A Scoping Review of the Global Research on the Effects of Spending Time in Nature Global Advances in Integrative Medicine and Health https://doi.org/10.1177/27536130241231258
[4] B Lab https://www.bcorporation.net/en-us/find-a-b-corp/company/new-forests/
[5] New Forests (2024) Sustainability and Impact Report 2024 New Forests
[6] Burapha Agro-Forestry https://www.buraphawood.com
[7] Finnish Fund for Industrial Cooperation Ltd (FINNFUND) https://www.finnfund.fi/hankkeet/burapha-agro-forestry-co-ltd-2/
[8] United Nations Convention to Combat Desertification https://www.unccd.int/land-and-life/land-degradation-neutrality/impact-investment-fund-land-degradation-neutrality
[9] Earth Systems (2022) Burapha Agroforestry Project ESIA Main Report Commissioned by Burapha Agroforestry.
[10] White et al (2022) Is the reputation of Eucalyptus plantations for using more water than Pinus plantations justified? Hydrology & Earth System Sciences https://doi.org/10.5194/hess-26-5357-2022
[11] Singapore Business Directory https://www.sgpbusiness.com/company/Tropical-Asia-Forest-Fund-2-Holdings-Pte-Limited
[12] Green Finance Institute https://hive.greenfinanceinstitute.com/gfihive/revenues-for-nature/case-studies/tropical-asia-forest-fund-2/
[13] Phimmavong et al (2019) Financial Returns From Collaborative Investment Models Of Eucalyptus Agroforestry Plantations In Lao PDR Land Use Policy https://doi.org/10.1016/j.landusepol.2019.104060