‘In 5 to 10 years, businesses will question the quality of their carbon footprint reduction efforts, rather than just the quantity. ’

Interview with Erwan Le Méné, co-founder and CEO of Ecotree

For this new edition of Both, we are very pleased to spend some time with Erwan Le Méné, co-founder and CEO of Ecotree, to talk about forest and biodiversity.

He founded Ecotree with the idea to help companies translate their environmental commitments into their business operations. And even if planting 2 million trees is still a drop in the ocean, it shows the path to work on forest, biodiversity and carbon reduction at scale.

Could you give us a brief pitch about Ecotree and why you started it?

Sure, I've spent 13 years in finance and observed that banks are increasingly scrutinized for their environmental impact. Many company leaders, while personally convinced about environmental concerns, find it challenging to translate these into their business operations. Existing solutions often amount to buying the right to pollute, which is unsatisfactory and lacks transparency. I founded Ecotree to provide a tangible, localized solution: financing nature-based reforestation projects close to our customers in France and Europe. This turns ecological commitment into a key success factor and accelerator for businesses, enabling them to contribute positively without resorting to ineffective carbon credit systems.

What are the major challenges of reforestation?

The key issue is that while forests are plentiful in France, many owners, often older individuals with low income, struggle to maintain their forests due to rising living costs. Around 75% of forests belong to these individuals. Therefore, there's a great need to restore and maintain these forests. We need to repair areas with poor management, neglected sections, and non-reconstituted clear-cuts. The aim of Ecotree is to restore and renovate these assets, similar to rehabilitating a dilapidated building. Even though we have planted nearly 2 million trees since we started, it's a drop in the water. It however, demonstrates that progress is possible and gives companies a concrete way to combat climate change. Another major issue is the preservation and enhancement of biodiversity. Many people still view carbon sequestration as the main solution, but this misses the broader need for mixed forests and wetland restoration to increase biodiversity. We must balance our actions not just for carbon absorption, but also to provide a refuge for biodiversity.

Carbon is relatively easy to measure, hence its integration into regulations and reporting. Biodiversity, however, is more challenging to measure. How do you measure the restoration of biodiversity? Is it on a project scale or do you have a global indicator?

That's a complex issue indeed. Biodiversity will only become a primary concern if we can effectively measure it. This is more complex than measuring carbon credits. Luckily, standards are emerging that include biodiversity indicators such as the total restored area and number of species. For instance, when we begin a project, an ecologist does a thorough assessment, including a DNA sequencing soil analysis, physical surveys, and then we track changes year after year. We're dedicated to restoring life to these forests through our projects.

You've earlier mentioned the concept of 'long-term thinking', which is incredibly important. How do businesses manage to project themselves into this long-term future?

Indeed, the challenge is in convincing businesses about the importance of long-term sustainability. Currently, many may not see the immediate advantage in financing biodiversity projects. However, some visionaries understand that biodiversity is the new carbon. The carbon neutrality trend is fading as it poses more issues than solutions. Greenwashing isn't a sustainable strategy either. In my belief, businesses in 5 to 10 years will question the quality of their carbon footprint reduction efforts, rather than just the quantity. Some businesses are willing to pay more for quality carbon offset initiatives that factor in biodiversity. A part of it also depends on the type of trees planted; for instance, a conifer captures more CO2 than a deciduous tree. So, planting deciduous trees, while costlier and slower-growing, can be seen as a good investment. Overall, the primary drive must be conviction and the desire to do things right from the get-go, instead of prioritizing short-term profits.

You mentioned 80,000 individuals among your clients. Do you feel that what's happening in companies, this issue of biodiversity and reforestation, is also affecting individuals who are looking for solutions?

Indeed, there's significant interest from individuals deeply concerned about these issues. However, this isn't a high-growth area for us due to high acquisition costs and typically low average spend. What's important is the method of acquisition; often, companies involve their employees in our projects. It serves as an engagement and, truthfully, a marketing tool. The symbolism of planting a tree is powerful, resonating with people. For example, banks plant trees for the newborns of their employees, a gesture far more meaningful than a small cash gift. This conveys a sense of longevity and rootedness that resonates well in marketing strategies.

What's the interest in looking at local projects and are there any other geographical areas you're considering in terms of reforestation and biodiversity restoration?

Great question. Presently, we have offices in France and Copenhagen, covering Northern Europe. We manage projects primarily in France, Scandinavia, UK, Germany, and Romania. Humility is essential in recognizing what we can do. Our expertise is in European forestry, but we don't have experience with equatorial forests. Legal frameworks in Europe allow us to secure our projects, whereas it's less feasible in places like Africa. Our local approach is appreciated by our clients, even those who fund projects elsewhere. Perhaps in 10 years, we'll expand our expertise and legal knowledge to manage projects elsewhere.

Could the regulation go further, and are there significant regulatory challenges or opportunities for public authorities to push these biodiversity issues further?

Absolutely. Climate and biodiversity are gaining immense media coverage, prompting significant commitments at the European level, like carbon neutrality by 2050. This will demand transformative changes. I believe the European legislators, leading globally on this issue, must accelerate drastically. The urgency is extreme as we face catastrophic climate predictions and biodiversity loss. We see threats like desertification risking livelihoods and national economies. Therefore, legislation must act swiftly. I advocate for financial institutions to provide zero-interest loans to businesses contributing positively to the environment, regardless of their industry. Conversely, those depleting natural capital should face higher interest rates. This simple move could have a huge impact.

Are there any other approaches on biodiversity that you're partnering with other companies or projects on?

Absolutely, we have numerous partnerships focused on climate and biodiversity. For instance, we work with probiotics providers for soil and we collaborate with beekeepers across all our forests. We also partner with associations focusing on the preservation of certain ecosystems and animal species. Moreover, we create "birth islands" in each forest, dedicating small areas to densely planted primary species, never to be touched. This approach provides natural habitats that teem with biodiversity. Although we can make mistakes in dealing with natural capital, it's important to keep trying, learning, and executing these projects with humility.