The increasing importance of forest ecosystems for human society and planetary health is widely recognized, and the advancement of data collection technologies enables new and integrated ways for forest ecosystems monitoring. Therefore, the target of this paper is to propose a framework to design a forest digital twin (FDT) that, by integrating different state variables at both tree and forest levels, creates a virtual copy of the forest. The integration of these data sets could be used for scientific purposes, for reporting the health status of forests, and ultimately for implementing sustainable forest management practices on the basis of the use cases that a specific implementation of the framework would underpin. Achieving such outcomes requires the twinning of single trees as a core element of the FDT by recording the physical and biotic state variables of the tree and of the near environment via real–virtual digital sockets. Following a nested approach, the twinned trees and the related physical and physiological processes are then part of a broader twinning of the entire forest realized by capturing data at forest scale from sources such as remote sensing technologies and flux towers. Ultimately, to unlock the economic value of forest ecosystem services, the FDT should implement a distributed ledger-based on blockchain and smart contracts to ensure the highest transparency, reliability, and thoroughness of the data and the related transactions and to sharpen forest risk management with the final goal to improve the capital flow towards sustainable practices of forest management. © 2022 by the authors. Licensee MDPI, Basel, Switzerland.