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Timber Financing – Theory and Financing Practice in the Swiss and International Forestry and Timber Industry
Timber is gaining importance not only as a construction material but also across the entire value chain and as a carbon removal technology. At the same time, the forestry and timber sector—particularly the SME-driven Swiss market—faces key financing challenges: How is growth financed? What instruments are available? And why does investment capital often remain limited despite strong climate and market potential?
The white paper “Timber Financing – Theory and Financing Practice in the Swiss and International Forestry and Timber Industry” was developed in collaboration with the ZHAW School of Management and Law and Timber Finance. It provides the first systematic analysis of the financing landscape in the forestry and timber sector, with a focus on Switzerland and embedded in an international comparison. The project was supported by the Swiss Federal Office for the Environment (FOEN) under the Wood Action Plan.
The study is based on three primary data sources:
▪ International capital market data of publicly listed timber companies
▪ Company-level data from the ORBIS database
▪ A quantitative survey of Swiss companies across the entire timber value chain—from forestry and processing to timber construction
The white paper shows that while timber construction and the industrial timber value chain are widely perceived as sustainable, their financing structures often lag behind their climate and growth potential. Equity and mortgage-backed bank loans dominate, while innovative or sustainable financing instruments remain underutilized.
Key findings of the study:
■ The Swiss forestry and timber sector is heavily SME-driven and has limited access to capital markets and alternative financing instruments.
■ Publicly listed timber companies in Europe and North America make significantly broader use of financing instruments—from green bonds to private placements.
■ CO₂-Zertifikate etablieren sich als ergänzende Einnahmequelle, spielen aber bisher nur eine untergeordnete Rolle in der klassischen Wachstumsfinanzierung.
■ High financing costs, insufficient collateral, and limited transparency regarding sustainability performance are holding back investment.
■ Without targeted financial incentives, the climate potential of timber—particularly long-term carbon storage in buildings—remains economically undervalued.
The white paper therefore makes an important contribution to closing existing knowledge gaps and establishing a solid foundation for new financing approaches—from sustainable lending and timber construction mortgages to carbon-based financing models.
Download White Paper (in German):
