Forestry water conservation project wins Morgan Stanley Sustainable Investing Challenge

A water conservation project involving better management of forests in California won the Morgan Stanley Sustainable Investing Challenge on Friday.

Blue Forest, presented by students from the Haas School of Business at the University of California, Berkeley, aims to increase the amount of water available to utilities companies through pro-active forestry management to stop forests overgrowing, which improves their ability to retain water. Snow disappears much more quickly in an overcrowded forest, for example.

For each acre of managed forestland, Blue Forest predicts that they can generate 125 gallons of water. Good forest management can also reduce the risk of forest fires. Through these initiatives the project will make money from effectively selling the saved water to water utilities and hydropower plants and towards the end of the term, from fire suppression benefits awarded by the USDA Fire Service which is actively looking for low cost forest management and fire suppression services.

Blue Forest believes there is a $1.6 billion addressable market in the western US for these services. The project was awarded $10,000 for winning the challenge.

The competition’s runner up was a fund aimed at returning displaced farmers in Colombia to the land to produce coffee, corn and cocoa under an ethically-sourced food brand CampoColombia. Several farmers have fled Colombia’s countrywide amid drug cartel and guerilla warfare for decades but the situation has improved in recent years as the government and guerillas FARC negotiate peace terms. CampoColombia aims to return displaced Colombians to farms, improving their livelihood and wages from that available in the city.

Six of the 10 finalists that were shortlisted from over 380 entries were agriculture-related as several attendees of the event noted the increasing interest in and importance of improving the management of the world’s agricultural resources. Other agriculture related projects included the Moringa Tree Fund, to help reverse desertification in Ghana; GreenTop Capital, a greenhouse business; Floating Green Capital, a hydroponics project and Precision Agriculture REIT, a Canadian trust aimed at promoting the use of precision agriculture techniques.

Other sectors represented in the final 10 included health, power and carbon capture.

This is the challenge’s fifth year. It is a collaboration between INSEAD, the business school, the Kellogg School of Management, and Morgan Stanley’s Institute for Sustainable Investing. It is also supported by the MacArthur Foundation, real assets investment platform Equilibrium Capital, sustainable capitalism investor Generation Foundation, law firm Orrick, Skopos Impact Fund, Water Asset Management and economic think-tank the Milken Institute.