• the-generation-forest-header-FAQ
01/0X

Answers to the most frequently asked questions

We have compiled a list of frequently asked questions about our cooperative. If you still have any questions, do not hesitate to write to us over our contact form.

  1. General
  2. Membership
  3. Generation forests
  4. Impact
  5. Investment
  6. Business Model
What exactly does The Generation Forest do?

Our cooperative buys degraded agricultural land in Panama and reforests it in accordance with the principle of generation forests. Concerned here are ecosystems (mixed forests) modelled on a natural rainforest with several storeys, which not only offset huge amounts of CO₂, but at the same time regenerate soils, store drinking water and create habitats for a variety of animals. Over time, the stock is thinned out repeatedly and the timber is sold at a profit. This allows us to generate a green return for our members, while the clearings serve as planting sites for the next generation of trees.

Who are the people behind The Generation Forest?

Iliana Armién and Andreas Eke, the team that founded Futuro Forestal, launched the cooperative in 2016 – originally as Waldmenschen eG and with just eleven members. Our team in Hamburg comes from a wide range of backgrounds: forestry, investment, marketing, project management and tax law. Since we also want to grow on a global scale, in 2019 we decided to adopt the name of our forestry concept: The Generation Forest.

What does the operative work on the ground look like?

We are proud of our strategic partnership with the Panamanian forestry company Futuro Forestal. The founding team, Iliana Armién and Andreas Eke, developed the concept of the generation forest, on which our cooperative forests flourish, in collaboration with key stakeholders including Indigenous communities, the Smithsonian Tropical Research Institute and the United Nations Environment Programme. The long-term partnership with this pioneering organisation, which now has almost 30 years of experience in sustainable reforestation and was the first forestry company in Panama to be awarded B-Corp certification, ensures that we have access to the most suitable land locally, as well as short decision-making paths.

Why are the areas you are reforesting in Panama and not in Germany?

We are often asked why we reforest in the tropics and not in Germany. There are several reasons for this, but when it comes to climate protection, there are two particularly important ones: firstly, plants grow much faster near the equator. Whereas reforestation in Germany takes a long time to unfold its climatic impact, our forests sequester CO₂ after just a few years. Unlike in a plantation and thanks to the careful management of our reforestation projects, we do not just store the carbon in the wood, but in the entire forest system and its soils. Furthermore, we can do more for the climate in the tropics, as the financial outlay per reforested hectare is many times lower and we are actively reforesting in exactly those areas where 2/3 of the rainforests in Panama have already disappeared. These aspects combine to create a self-reinforcing leverage effect that makes the tropics so attractive for reforestation projects that have a positive impact on the climate.

Why did Waldmenschen eG change its name to The Generation Forest eG?

When we established our cooperative, we came up with a name for it very quickly: in the name "Waldmenschen" which simply means "forest people", we wanted to unite growth, values and cohesion in one expression. As our community grew, however, it became increasingly clear to us that the name actually made it more difficult for a broad base of people to access our work, rather than making it easier. The name was also difficult to use in our internationalisation work and it has been important to us from the start to make our cooperative, our work and our vision accessible to everyone around the world. We therefore came up with a new name together with the members of the cooperative: The Generation Forest. It is a name that reflects our forestry principle and also embodies the idea that each share in the cooperative can be passed on from generation to generation and that we can do good collectively for future generations.

Can I visit your projects in Panama?

In general, visiting our projects is possible. If you are interested please contact our team, but also keep in mind that we will need a little lead time. It may be that Jasper proposes fixed dates to you. We also welcome photo and travel reports that contribute to bringing our forests closer to Germany. A brief word about your carbon footprint: it would be nice if you could combine any long distance flight you may take with a longer journey and not just for the purpose of visiting our projects. South and Central America have so much to offer.

Is there a chance that I can join your team?

We look forward to every helping hand and are always happy to receive unsolicited applications to info(at)thegenerationforest.com.

How do I become a member of The Generation Forest eG?

1. Complete our online form
The first step is to simply complete our online form.

2. Verification
As soon our system receives your membership application, you undergo verification. This means that you verify your data and sign the digital document. Cooperative law stipulates that we always require the member's original signature.

3. Formal acceptance as an Investing Member
As soon as we receive the membership form containing your original signature, we send you an email. At the next board meeting, which takes place every fortnight, you will then be formally accepted as an Investing Member of our cooperative.

4. Confirmation email & welcome pack
Once you have been successfully accepted as an Investing Member, you receive a confirmation email containing all the details concerning the payment procedure, plus a welcome pack in the post with your share certificate and the countersigned membership declaration. We look forward to welcoming you as a member of The Generation Forest!

How old do I have to be to join the cooperative?

We do not have a minimum age requirement for membership. However, we do require the signature of a parent or guardian for members who are minors. Incidentally, it is not uncommon for cooperative shares to be given as a gift, for example by parents or grandparents on the occasion of a birth. It is not for nothing that we refer to our forests as generation forests!

How much does a cooperative share cost?

In 2022 a cooperative share costs a one-off price of 1,200 euro plus a joining fee of 231 euro, which reflects the growing value of the forests. This is set once a year by the general assembly, so it is worth joining or increasing your shareholding before the turn of the year.

Do I have to pay the amount all at once or is there an option to pay in instalments?

You can transfer the amount directly – or pay it in instalments of 26.52 euro weekly or 104 euro monthly by issuing us a SEPA direct debit mandate. There are no additional costs for paying in instalments.

What opportunities are there for me to become involved beyond my membership?

We are delighted about every single person who campaigns for the expansion of our community and by extension the restoration and protection of generation forests that are rich in species. This is why we have launched our Ambassador Programme. Whether in the form of a personal recommendation, a post on our social media channels, a visit to a project on the ground or support on our exhibition stands – there are lots of different ways for you to get involved. Simply join our Ambassador Programme and we'll get back to you. You are also very welcome to approach us with new ideas and suggestions!

What exactly are generation forests?

Generation forests are mixed forests utilised for forestry purposes, in which different tree species of several age classes occur. This is so because not all tree species grow at the same pace, which means that their harvesting times differ from one species to another. After harvesting, clearings are immediately filled with new saplings so that, over time, near-natural permanent forests are created that regenerate soils and have a positive effect on biodiversity and the water balance.

In many ways they resemble natural forests and even perform the same ecological functions: the formation of humus, the creation of habitats for plants and animals, the storage of valuable drinking water and much more. The difference is that we plant significantly more precious woods and take care of the forest in a silvicultural capacity. This means that, one hectare of generation forest – depending on the state of thinning – will contain between 150 and 1,100 precious woods. In a natural forest, there are often only one or two trees per hectare that can be classified as marketable precious timber.

How many species of tree do you plant?

We plant more than 20 different species of tree native to Panama – including American mahogany, Spanish cedar and Tigerwood.

Why don't you just let the forest grow in peace?

There are two aspects to this:
1. In order for the tropical rainforest to retain its positive effects throughout its lifetime, it needs to have an economic value.
a. It is designed to provide local people with a regular income and a future worth living for.
i. For this reason, social sustainability represents an important cornerstone of our work: the local population can work alongside us in the long term and earn a good living. This is the only way is it possible for us to make the protection of the forests attractive to those people whose livelihood depends on the forests.
ii. What is more, generation forests offer many landowners a sustainable alternative source of income to livestock farming with its many environmental disadvantages.

2. According to the UN-REDD programme, our generation forests are of global importance when it comes to preserving species, and the CO₂ that they store is also comparable to that of a primary forest.

Do you have a strategy for reforestation?

Our long-term goal is to reforest contiguous areas to create the largest possible habitat for flora and fauna. When two adjacent plots of land are offered for sale, we take the opportunity to purchase them. This means that we may purchase more land first to reforest it at a later date when the young seedlings can grow under optimal conditions. Another advantage is that by buying adjacent land we can form our own infrastructure and are less dependent on public roads. What is more, land prices are currently very low. However, we do expect a sharp hike in prices over the next few years, so it makes perfect sense to continue with our current strategy. This is the only way for us to be able to prevent the cultivation of monocultures and also the destruction of valuable soils – for the sake of our environment and future generations.

What total size of area do you want to reforest?

Our goal is to reforest at least 1,000 hectares of land by the end of 2022. With the Generation Forest concept, we want to inspire people around the world and motivate them to join us. For the sake of our planet and all the creatures that inhabit it.

How much does a hectare of generation forest cost?

One hectare of newly created permanent forest costs approximately €28,500 over the entire period until it becomes financially self-sustaining and generates profits. This figure is based on many years of experience of our local forestry partner and on a 100-year business plan drawn up as part of a scientific project with Wageningen University in the Netherlands. This is an approximate value that excludes the significant economies of scale – both upwards and downwards – in the forestry sector.

I would like to offset the emissions I cause. How many shares do I need to do so?

It all depends on your personal lifestyle. If you already live a very ecological lifestyle, five cooperative shares should suffice. The forest in this area sequesters an average of five tonnes of CO₂ per year over the entire 100-year project period. If you live less climate-consciously, you should be on the safe side with half a hectare of forest. This corresponds to 10 cooperative shares. According to the German Federal Environment Agency, average per capita emissions in Germany currently stand at 10.78 tonnes.

What is the social impact locally?

Social sustainability is an important aspect of our work. And because of that we want to actively involve local people in our projects. They can earn a good living and obtain social security as a result. What is more, we hope that through the sustainable reforestation work undertaken and the further training opportunities we offer, we can achieve a positive effect that lasts for a long time and provides our employees with a good perspective for the future.

When a German cooperative purchases land in Panama isn't it land grabbing?

That is not the case, because we do not buy land that local communities use or to which traditional customary rights exist – as with Indigenous protected areas. We primarily buy land that was originally cleared several decades ago for cattle farming but is in danger of degradation due to the declining carrying capacity of the soil. This is usually land that is being sold because the owners can no longer manage it economically - and many of them have long since moved to the city, where there is demand for jobs due to high economic growth. In individual cases, we also buy plantations stocked with timber, which we transform into a generation forest.

Do your generation forests compete with food production?

We only plant our forests on land with medium soil quality, which is wholly unsuitable for agricultural use and hardly suitable for pasture farming, but on which native tree species thrive, however. We also provide a solution for many people who have mortgaged their land for an economic model that no longer functions or only yields a marginal profit.

Does buying a cooperative share represent an investment?

• intergenerational investment focuses on impact and not on maximising profits.
         o Slow finance: Sustainable capital investment without a limited project duration.
             • For us, our commitment is long term, but it also has an early impact –
                      • through the reforestation of the rainforest and the associated positive effects for the climate and species diversity. For each day that our forests thrive, they make an effective contribution to the ecological equilibrium of our planet, while the economic value of your cooperative share grows continuously.
• Cooperative principle: potential risks are minimised by distributing them among all members and the strength of the community is used to achieve a major impact even with a small amount – not only from the time when the trees start storing CO₂, but even before, since all the members co-own the entire forest stand.
• The excellent qualifications and many years of experience of our partner company provide forestry expertise.

Does a fixed increase in value take place each year?

An increase in value takes place because over the years we repeatedly take individual, precious tropical woods from our generation forest and sell them at a profit. This means that the value of a cooperative share has grown every year since the first reforestation project.

What is behind the fee for joining?

Since future earnings are distributed equally among all members, the General Assembly specifies a joining fee once a year, reflecting the growing value of the forests.

What does internal rate of return mean?

The internal rate of return is used for investments that generate fluctuating or irregular returns. It provides information about the theoretical average return. For us, the internal rate of return means the increase in value of our generation forests, which gain in value every year thanks to their natural growth. This does not mean, however, that we also make a profit every year, but merely justifies our one-off joining fee of 4.5% per share, which increases year on year. As soon as we generate income from the timber we sell from the twentieth year onwards, this is also paid out. The General Assembly then decides how the dividend is to be disbursed.

Is interest paid out?

We don't pay out any interest, we pay out a dividend as soon as our balance sheet is in the black and we make a profit with the timber from our forests.

When is the dividend paid out?

The initial pay out of dividends can take place some 20 years after planting, probably in 2038, when individual trees are large enough to be removed without harming the ecosystem established thus far.

Does a market exist for rare tropical woods?

Indeed, but these are in fact niche markets. We know of no company in the world that cultivates slow-growing, very precious woods itself. To date, these are almost exclusively obtained from natural forest management, which endangers the stand in the long term. In our financial planning, we assume that native species will achieve similar prices as very commonly traded species. We are also convinced that the traceability of the woods we offer will become increasingly important in the future, which will be reflected in the price in the medium term.

Upon what do future profits depend?

Future profits depend largely on the development of timber prices and the demand for tropical timber. However, other factors also play an important role as well, such as the cost developments at our cooperative and the growth of our trees.

We deliberately refrain from using criteria such as inflationary trends or rising timber prices in our profit forecasts. However, it should be noted that timber is currently in high demand. This results in rising prices – especially for woods where various forms of use compete for the raw material. An increasing supply of wood from reforestation projects can of course bring the global price down again. On the other hand, it is becoming apparent that in future wood will originate less and less from natural forests and more and more from cultivated forests – this in turn can drive up the price of wood.

Is there any reserve liability on the part of a member?

We have ruled out any reserve liability in a legally binding manner in Art. 40 of our Articles of Cooperation. Members are therefore not liable in the event of the cooperative becoming insolvent.

What are the operating costs?

Part of the money paid in by the members is used to cover operating costs in Hamburg. These are budgeted to make up a maximum of 25 percent of the total capital. We have published a detailed list of costs on our Transparency Page.

Who guarantees that my money gets to Panama?

Our members' trust in us is our most valuable asset, which is why it is important to us to make all our processes transparent and publish the associated documents in our document library. You can find this on our website: https://thegenerationforest.com/transparency/. This way, you can be sure that the money you invest goes exactly where it will have the greatest possible impact on the environment and people.

Can I resell my shares?

If you wish to sell your shares, you can do so under the conditions you have negotiated. However, the cooperative needs to be informed of the intended change of ownership in order to update the membership list accordingly. The transfer also requires the approval of the Board. We will gladly be of help to you with the sale: we can establish contact with interested parties and take direct care of the transfer of your shares to another person. They may charge a small administration fee on this, provided that the effort and expense involved justifies such a payment.

Can my heirs inherit my shares?

If shares are inherited and several heirs exist, they will have to decide among themselves who the shares are to be transferred to. Otherwise, the shares are returned to the cooperative and the heirs receive a settlement balance in accordance with the legal regulations, which is based on the balance sheet profit for the last financial year. This is usually significantly lower than the real value of the shares, since it only includes the profits already realised through the sale of timber.

Can I cancel my membership?

It goes without saying that you can cancel your membership or terminate individual shares. If you cancel your membership, the shares will be returned to the cooperative and you will receive a settlement credit. If you merely terminate individual shares, your membership in the cooperative remains in force, provided you hold at least one share. It can be assumed that the sale of shares will generate higher proceeds than terminating them.

What are the risks?

Here you can download our risk table and read about our prevention measures.

Why did you choose a cooperative as your legal form?

In practice, a cooperative is a particularly durable legal form, soundly regulated by the cooperative association and, above all, transparent. Unlike most associations, a cooperative is a business enterprise that is operational and can therefore manage its own forests and sell its own timber. The cooperative form also allows us to constantly admit new members by issuing new shares without having to resolve the issue of raising new capital among shareholders, as is the case with a company limited by shares.

Who advises The Generation Forest on legal issues?

We developed the structure of the cooperative closely with André Le Prince, managing partner of the auditing company WLP in Hamburg, who has been advocating cooperatives as a successful legal form for social enterprises for years. The accounts were kept, and the annual financial statements drawn up by Transtreuhand GmbH (formerly SOLITAX GmbH) up to and including 2021. From 01/01/2022 onwards, this has been taken over by the law firm Anne Lampé. The cooperative is audited by the Auditing Association of German Transport, Service and Consumer Cooperatives (Prüfungsverband der Deutschen Verkehrs-, Dienstleistungs- und Konsumgenossenschaften e. V.) in Hamburg.

What governance structure does the cooperative have?

These questions are regulated in our Articles of Cooperation: Day-to-day business operations are managed by the cooperative's Board of Directors. All issues of greater scope require the approval of the Supervisory Board. The Supervisory Board appoints the Board of Directors, the General Assembly elects the Supervisory Board.

Do all members have the same rights?

We distinguish between ordinary and investing members. All members are investing members with the exception of elected ordinary members. The shares of the former have the same legal value as ordinary members' shares, but they do not have the right to vote at the General Assembly. We want to ensure in this way that the cooperative does not lose sight of its mission 100 years from now. That is why we only allocate shares with voting rights very selectively. This includes, for example, the cooperative's founding team – first and foremost the members of the Board of Directors as well as the Supervisory Board, who have also subscribed to all the shares themselves – as well as some people who have been selected specifically for their expertise. We plan to cautiously evolve the group of members with voting rights.

General

What exactly does The Generation Forest do?

Our cooperative buys degraded agricultural land in Panama and reforests it in accordance with the principle of generation forests. Concerned here are ecosystems (mixed forests) modelled on a natural rainforest with several storeys, which not only offset huge amounts of CO₂, but at the same time regenerate soils, store drinking water and create habitats for a variety of animals. Over time, the stock is thinned out repeatedly and the timber is sold at a profit. This allows us to generate a green return for our members, while the clearings serve as planting sites for the next generation of trees.

Who are the people behind The Generation Forest?

Iliana Armién and Andreas Eke, the team that founded Futuro Forestal, launched the cooperative in 2016 – originally as Waldmenschen eG and with just eleven members. Our team in Hamburg comes from a wide range of backgrounds: forestry, investment, marketing, project management and tax law. Since we also want to grow on a global scale, in 2019 we decided to adopt the name of our forestry concept: The Generation Forest.

What does the operative work on the ground look like?

We are proud of our strategic partnership with the Panamanian forestry company Futuro Forestal. The founding team, Iliana Armién and Andreas Eke, developed the concept of the generation forest, on which our cooperative forests flourish, in collaboration with key stakeholders including Indigenous communities, the Smithsonian Tropical Research Institute and the United Nations Environment Programme. The long-term partnership with this pioneering organisation, which now has almost 30 years of experience in sustainable reforestation and was the first forestry company in Panama to be awarded B-Corp certification, ensures that we have access to the most suitable land locally, as well as short decision-making paths.

Why are the areas you are reforesting in Panama and not in Germany?

We are often asked why we reforest in the tropics and not in Germany. There are several reasons for this, but when it comes to climate protection, there are two particularly important ones: firstly, plants grow much faster near the equator. Whereas reforestation in Germany takes a long time to unfold its climatic impact, our forests sequester CO₂ after just a few years. Unlike in a plantation and thanks to the careful management of our reforestation projects, we do not just store the carbon in the wood, but in the entire forest system and its soils. Furthermore, we can do more for the climate in the tropics, as the financial outlay per reforested hectare is many times lower and we are actively reforesting in exactly those areas where 2/3 of the rainforests in Panama have already disappeared. These aspects combine to create a self-reinforcing leverage effect that makes the tropics so attractive for reforestation projects that have a positive impact on the climate.

Why did Waldmenschen eG change its name to The Generation Forest eG?

When we established our cooperative, we came up with a name for it very quickly: in the name "Waldmenschen" which simply means "forest people", we wanted to unite growth, values and cohesion in one expression. As our community grew, however, it became increasingly clear to us that the name actually made it more difficult for a broad base of people to access our work, rather than making it easier. The name was also difficult to use in our internationalisation work and it has been important to us from the start to make our cooperative, our work and our vision accessible to everyone around the world. We therefore came up with a new name together with the members of the cooperative: The Generation Forest. It is a name that reflects our forestry principle and also embodies the idea that each share in the cooperative can be passed on from generation to generation and that we can do good collectively for future generations.

Can I visit your projects in Panama?

In general, visiting our projects is possible. If you are interested please contact our team, but also keep in mind that we will need a little lead time. It may be that Jasper proposes fixed dates to you. We also welcome photo and travel reports that contribute to bringing our forests closer to Germany. A brief word about your carbon footprint: it would be nice if you could combine any long distance flight you may take with a longer journey and not just for the purpose of visiting our projects. South and Central America have so much to offer.

Is there a chance that I can join your team?

We look forward to every helping hand and are always happy to receive unsolicited applications to info(at)thegenerationforest.com.

Membership

How do I become a member of The Generation Forest eG?

1. Complete our online form
The first step is to simply complete our online form.

2. Verification
As soon our system receives your membership application, you undergo verification. This means that you verify your data and sign the digital document. Cooperative law stipulates that we always require the member's original signature.

3. Formal acceptance as an Investing Member
As soon as we receive the membership form containing your original signature, we send you an email. At the next board meeting, which takes place every fortnight, you will then be formally accepted as an Investing Member of our cooperative.

4. Confirmation email & welcome pack
Once you have been successfully accepted as an Investing Member, you receive a confirmation email containing all the details concerning the payment procedure, plus a welcome pack in the post with your share certificate and the countersigned membership declaration. We look forward to welcoming you as a member of The Generation Forest!

How old do I have to be to join the cooperative?

We do not have a minimum age requirement for membership. However, we do require the signature of a parent or guardian for members who are minors. Incidentally, it is not uncommon for cooperative shares to be given as a gift, for example by parents or grandparents on the occasion of a birth. It is not for nothing that we refer to our forests as generation forests!

How much does a cooperative share cost?

In 2022 a cooperative share costs a one-off price of 1,200 euro plus a joining fee of 231 euro, which reflects the growing value of the forests. This is set once a year by the general assembly, so it is worth joining or increasing your shareholding before the turn of the year.

Do I have to pay the amount all at once or is there an option to pay in instalments?

You can transfer the amount directly – or pay it in instalments of 26.52 euro weekly or 104 euro monthly by issuing us a SEPA direct debit mandate. There are no additional costs for paying in instalments.

What opportunities are there for me to become involved beyond my membership?

We are delighted about every single person who campaigns for the expansion of our community and by extension the restoration and protection of generation forests that are rich in species. This is why we have launched our Ambassador Programme. Whether in the form of a personal recommendation, a post on our social media channels, a visit to a project on the ground or support on our exhibition stands – there are lots of different ways for you to get involved. Simply join our Ambassador Programme and we'll get back to you. You are also very welcome to approach us with new ideas and suggestions!

Generation forests

What exactly are generation forests?

Generation forests are mixed forests utilised for forestry purposes, in which different tree species of several age classes occur. This is so because not all tree species grow at the same pace, which means that their harvesting times differ from one species to another. After harvesting, clearings are immediately filled with new saplings so that, over time, near-natural permanent forests are created that regenerate soils and have a positive effect on biodiversity and the water balance.

In many ways they resemble natural forests and even perform the same ecological functions: the formation of humus, the creation of habitats for plants and animals, the storage of valuable drinking water and much more. The difference is that we plant significantly more precious woods and take care of the forest in a silvicultural capacity. This means that, one hectare of generation forest – depending on the state of thinning – will contain between 150 and 1,100 precious woods. In a natural forest, there are often only one or two trees per hectare that can be classified as marketable precious timber.

How many species of tree do you plant?

We plant more than 20 different species of tree native to Panama – including American mahogany, Spanish cedar and Tigerwood.

Why don't you just let the forest grow in peace?

There are two aspects to this:
1. In order for the tropical rainforest to retain its positive effects throughout its lifetime, it needs to have an economic value.
a. It is designed to provide local people with a regular income and a future worth living for.
i. For this reason, social sustainability represents an important cornerstone of our work: the local population can work alongside us in the long term and earn a good living. This is the only way is it possible for us to make the protection of the forests attractive to those people whose livelihood depends on the forests.
ii. What is more, generation forests offer many landowners a sustainable alternative source of income to livestock farming with its many environmental disadvantages.

2. According to the UN-REDD programme, our generation forests are of global importance when it comes to preserving species, and the CO₂ that they store is also comparable to that of a primary forest.

Do you have a strategy for reforestation?

Our long-term goal is to reforest contiguous areas to create the largest possible habitat for flora and fauna. When two adjacent plots of land are offered for sale, we take the opportunity to purchase them. This means that we may purchase more land first to reforest it at a later date when the young seedlings can grow under optimal conditions. Another advantage is that by buying adjacent land we can form our own infrastructure and are less dependent on public roads. What is more, land prices are currently very low. However, we do expect a sharp hike in prices over the next few years, so it makes perfect sense to continue with our current strategy. This is the only way for us to be able to prevent the cultivation of monocultures and also the destruction of valuable soils – for the sake of our environment and future generations.

What total size of area do you want to reforest?

Our goal is to reforest at least 1,000 hectares of land by the end of 2022. With the Generation Forest concept, we want to inspire people around the world and motivate them to join us. For the sake of our planet and all the creatures that inhabit it.

How much does a hectare of generation forest cost?

One hectare of newly created permanent forest costs approximately €28,500 over the entire period until it becomes financially self-sustaining and generates profits. This figure is based on many years of experience of our local forestry partner and on a 100-year business plan drawn up as part of a scientific project with Wageningen University in the Netherlands. This is an approximate value that excludes the significant economies of scale – both upwards and downwards – in the forestry sector.

Impact

I would like to offset the emissions I cause. How many shares do I need to do so?

It all depends on your personal lifestyle. If you already live a very ecological lifestyle, five cooperative shares should suffice. The forest in this area sequesters an average of five tonnes of CO₂ per year over the entire 100-year project period. If you live less climate-consciously, you should be on the safe side with half a hectare of forest. This corresponds to 10 cooperative shares. According to the German Federal Environment Agency, average per capita emissions in Germany currently stand at 10.78 tonnes.

What is the social impact locally?

Social sustainability is an important aspect of our work. And because of that we want to actively involve local people in our projects. They can earn a good living and obtain social security as a result. What is more, we hope that through the sustainable reforestation work undertaken and the further training opportunities we offer, we can achieve a positive effect that lasts for a long time and provides our employees with a good perspective for the future.

When a German cooperative purchases land in Panama isn't it land grabbing?

That is not the case, because we do not buy land that local communities use or to which traditional customary rights exist – as with Indigenous protected areas. We primarily buy land that was originally cleared several decades ago for cattle farming but is in danger of degradation due to the declining carrying capacity of the soil. This is usually land that is being sold because the owners can no longer manage it economically - and many of them have long since moved to the city, where there is demand for jobs due to high economic growth. In individual cases, we also buy plantations stocked with timber, which we transform into a generation forest.

Do your generation forests compete with food production?

We only plant our forests on land with medium soil quality, which is wholly unsuitable for agricultural use and hardly suitable for pasture farming, but on which native tree species thrive, however. We also provide a solution for many people who have mortgaged their land for an economic model that no longer functions or only yields a marginal profit.

Investment

Does buying a cooperative share represent an investment?

• intergenerational investment focuses on impact and not on maximising profits.
         o Slow finance: Sustainable capital investment without a limited project duration.
             • For us, our commitment is long term, but it also has an early impact –
                      • through the reforestation of the rainforest and the associated positive effects for the climate and species diversity. For each day that our forests thrive, they make an effective contribution to the ecological equilibrium of our planet, while the economic value of your cooperative share grows continuously.
• Cooperative principle: potential risks are minimised by distributing them among all members and the strength of the community is used to achieve a major impact even with a small amount – not only from the time when the trees start storing CO₂, but even before, since all the members co-own the entire forest stand.
• The excellent qualifications and many years of experience of our partner company provide forestry expertise.

Does a fixed increase in value take place each year?

An increase in value takes place because over the years we repeatedly take individual, precious tropical woods from our generation forest and sell them at a profit. This means that the value of a cooperative share has grown every year since the first reforestation project.

What is behind the fee for joining?

Since future earnings are distributed equally among all members, the General Assembly specifies a joining fee once a year, reflecting the growing value of the forests.

What does internal rate of return mean?

The internal rate of return is used for investments that generate fluctuating or irregular returns. It provides information about the theoretical average return. For us, the internal rate of return means the increase in value of our generation forests, which gain in value every year thanks to their natural growth. This does not mean, however, that we also make a profit every year, but merely justifies our one-off joining fee of 4.5% per share, which increases year on year. As soon as we generate income from the timber we sell from the twentieth year onwards, this is also paid out. The General Assembly then decides how the dividend is to be disbursed.

Is interest paid out?

We don't pay out any interest, we pay out a dividend as soon as our balance sheet is in the black and we make a profit with the timber from our forests.

When is the dividend paid out?

The initial pay out of dividends can take place some 20 years after planting, probably in 2038, when individual trees are large enough to be removed without harming the ecosystem established thus far.

Does a market exist for rare tropical woods?

Indeed, but these are in fact niche markets. We know of no company in the world that cultivates slow-growing, very precious woods itself. To date, these are almost exclusively obtained from natural forest management, which endangers the stand in the long term. In our financial planning, we assume that native species will achieve similar prices as very commonly traded species. We are also convinced that the traceability of the woods we offer will become increasingly important in the future, which will be reflected in the price in the medium term.

Upon what do future profits depend?

Future profits depend largely on the development of timber prices and the demand for tropical timber. However, other factors also play an important role as well, such as the cost developments at our cooperative and the growth of our trees.

We deliberately refrain from using criteria such as inflationary trends or rising timber prices in our profit forecasts. However, it should be noted that timber is currently in high demand. This results in rising prices – especially for woods where various forms of use compete for the raw material. An increasing supply of wood from reforestation projects can of course bring the global price down again. On the other hand, it is becoming apparent that in future wood will originate less and less from natural forests and more and more from cultivated forests – this in turn can drive up the price of wood.

Is there any reserve liability on the part of a member?

We have ruled out any reserve liability in a legally binding manner in Art. 40 of our Articles of Cooperation. Members are therefore not liable in the event of the cooperative becoming insolvent.

What are the operating costs?

Part of the money paid in by the members is used to cover operating costs in Hamburg. These are budgeted to make up a maximum of 25 percent of the total capital. We have published a detailed list of costs on our Transparency Page.

Who guarantees that my money gets to Panama?

Our members' trust in us is our most valuable asset, which is why it is important to us to make all our processes transparent and publish the associated documents in our document library. You can find this on our website: https://thegenerationforest.com/transparency/. This way, you can be sure that the money you invest goes exactly where it will have the greatest possible impact on the environment and people.

Can I resell my shares?

If you wish to sell your shares, you can do so under the conditions you have negotiated. However, the cooperative needs to be informed of the intended change of ownership in order to update the membership list accordingly. The transfer also requires the approval of the Board. We will gladly be of help to you with the sale: we can establish contact with interested parties and take direct care of the transfer of your shares to another person. They may charge a small administration fee on this, provided that the effort and expense involved justifies such a payment.

Can my heirs inherit my shares?

If shares are inherited and several heirs exist, they will have to decide among themselves who the shares are to be transferred to. Otherwise, the shares are returned to the cooperative and the heirs receive a settlement balance in accordance with the legal regulations, which is based on the balance sheet profit for the last financial year. This is usually significantly lower than the real value of the shares, since it only includes the profits already realised through the sale of timber.

Can I cancel my membership?

It goes without saying that you can cancel your membership or terminate individual shares. If you cancel your membership, the shares will be returned to the cooperative and you will receive a settlement credit. If you merely terminate individual shares, your membership in the cooperative remains in force, provided you hold at least one share. It can be assumed that the sale of shares will generate higher proceeds than terminating them.

What are the risks?

Here you can download our risk table and read about our prevention measures.

Business Model

Why did you choose a cooperative as your legal form?

In practice, a cooperative is a particularly durable legal form, soundly regulated by the cooperative association and, above all, transparent. Unlike most associations, a cooperative is a business enterprise that is operational and can therefore manage its own forests and sell its own timber. The cooperative form also allows us to constantly admit new members by issuing new shares without having to resolve the issue of raising new capital among shareholders, as is the case with a company limited by shares.

Who advises The Generation Forest on legal issues?

We developed the structure of the cooperative closely with André Le Prince, managing partner of the auditing company WLP in Hamburg, who has been advocating cooperatives as a successful legal form for social enterprises for years. The accounts were kept, and the annual financial statements drawn up by Transtreuhand GmbH (formerly SOLITAX GmbH) up to and including 2021. From 01/01/2022 onwards, this has been taken over by the law firm Anne Lampé. The cooperative is audited by the Auditing Association of German Transport, Service and Consumer Cooperatives (Prüfungsverband der Deutschen Verkehrs-, Dienstleistungs- und Konsumgenossenschaften e. V.) in Hamburg.

What governance structure does the cooperative have?

These questions are regulated in our Articles of Cooperation: Day-to-day business operations are managed by the cooperative's Board of Directors. All issues of greater scope require the approval of the Supervisory Board. The Supervisory Board appoints the Board of Directors, the General Assembly elects the Supervisory Board.

Do all members have the same rights?

We distinguish between ordinary and investing members. All members are investing members with the exception of elected ordinary members. The shares of the former have the same legal value as ordinary members' shares, but they do not have the right to vote at the General Assembly. We want to ensure in this way that the cooperative does not lose sight of its mission 100 years from now. That is why we only allocate shares with voting rights very selectively. This includes, for example, the cooperative's founding team – first and foremost the members of the Board of Directors as well as the Supervisory Board, who have also subscribed to all the shares themselves – as well as some people who have been selected specifically for their expertise. We plan to cautiously evolve the group of members with voting rights.

You want to know more or have further questions?

Contact