FINANCING FORESTS
Growing investors' knowledge to drive forest solutions
As climate records continue to be shattered year after year, the need to ramp up investments in nature—especially in forests—has never been more urgent.
The good news is that more companies and funds are developing innovative solutions to preserve these vital carbon sinks and biodiversity hot-spots. While their early-stage development is being supported by public and philanthropic funding, they are struggling to unlock the necessary commercial funding to scale.
It is against this backdrop that Mobilising Finance for Forests (MFF) was created. MFF is a blended finance initiative funded by the UK government to demonstrate the business case for sustainable forestry and land use and to mobilize private sector capital. Managed by FMO, the program provides direct financing to companies and projects in the sector, indirect support through investments in related funds and leverages its ‘Learning, Convening, and Influencing Platform’ (LCIP) to expand knowledge about forestry investments and engage a broader range of investors in the sector. Below is a selection of resources and blogs produced by LCIP.
ENERGIZING THE GREEN TRANSITION AND CREATING NEW MARKETS
Read the full interview with FMO’s Co-CIO Huib-Jan de Ruijter, where he discusses the challenges of driving the green transition and the vital role Development Finance Institutions (DFIs) can play in creating new markets for nature. He emphasizes that unlocking this transition requires the creation of investable opportunities in forestry and sustainable land use. Blended finance and market creation are essential for de-risking these investments and attracting commercial capital.
ESG GUIDE FOR FORESTRY INVESTMENTS
Forestry offers an attractive opportunity for investors interested in nature-based solutions (NbS), but it is an asset class that demands a carefully tailored investment approach—particularly when it comes to conducting ESG due diligence. The latest guide published by MFF provides essential information to help investors understand forestry projects and outlines the necessary steps for making informed investment decisions from an ESG perspective.
ESTIMATING CARBON IN FORESTRY: A GUIDE TO AVAILABLE TOOLS FOR CLIMATE-FOCUSED INVESTORS
A variety of distinct but overlapping carbon modelling tools have been designed to support investors, project developers and decision makers in assessing and comparing carbon removals and avoidance across a range of nature-based solutions projects. This guide aims to help readers effectively utilize these tools by showing how they compare, what specific questions each tool can address, and how the information provided can inform decision-making.
IMPLEMENTING APPROACHES TO CARBON INTEGRITY: HOW CAN INVESTORS PUT THEIR POLICIES INTO PRACTICE?
This paper explores how impact-focused investors can support the development of a high-integrity voluntary carbon market in the Forestry and Sustainable Land Use (FSLU) sector. Many investors have been cautious about engaging in carbon markets due to perceived financial and reputational risks, often compounded by a lack of suitable standards and processes. The paper outlines three potential roles for impact-focused investors and discusses practical strategies to mitigate integrity concerns in FSLU carbon projects.
DEFORESTATION-FREE PORTFOLIOS: ROLES AND OPPORTUNITIES FOR INSTITUTIONAL INVESTORS
Investments in deforestation-free and forest-positive economic models present new commercial opportunities. This brief provides examples of highly effective intermediaries that are working to attract institutional capital into the Forestry and Sustainable Land Use (FSLU) sector. By engaging with, and investing in high-impact funds, project developers and market access players, early movers can capitalize on this largely untapped investment opportunity.
The Mobilising Finance Forests program aims to catalyze substantial additional private sector investment into forestry and sustainable land use projects across Africa, Asia, and the Amazon Basin. It offers long-term financing of up to 15 years, and targets projects that reduce deforestation pressures by increasing the value of standing forest or integrating forest protection and restoration into agricultural and forestry production. Want to know more? Visit the FMO website.
A FUTURE WE CAN FORESEE IS A FUTURE THAT WE CAN CREATE TOGETHER
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