Responsible Forest Finance Workshop | WWF

Responsible Forest Finance Workshop

Despite conservation efforts, deforestation continues at an alarming rate – 13 million hectares per year, or 36 football fields a minute. Leading Finance Institutions (FIs) are seeking ways to service emerging opportunities for environmental markets while managing risks associated with the forestry sector and implementing proper due diligence and screening procedures. Though investors see potential in forest finance, especially the forest carbon market — as recently identified in WWF’s 2009 Forest Carbon Investor Survey — recent studies by the GFTN have identified wariness by financiers to invest in forestry because of perceptions of risk.

As a result, there is limited access to money to finance the efforts of responsible forest producers, many of which are small and medium enterprises. To bridge this divide between the needs of responsible producers and the lack of financial capital for this sector, the GFTN, WWF International Finance, and WWF Conservation Finance with support from the Citi Foundation, United States Agency for International Development, and Swedish International Development Cooperation Agency completed two needs assessments to better understand forest finance activities and identify the opportunities and risks. These studies examined:

* Capital needs of selected GFTN forest participant companies in SE Asia, Latin America and Africa to achieve and maintain credible certification.
* Types of institutions, mechanisms and scales of available forest finance in Malaysia, Indonesia, Vietnam, Peru, Bolivia, Brazil, Ghana and Cameroon, as well as the extent and use of investment screening tools and guidelines in these countries.

On January 14 -15, 2010, the GFTN with support from the Swedish International Development Cooperation Agency (SIDA) brought together over 20 leading stakeholders in the finance sector and WWF colleagues to discuss how finance institutions can leverage responsible forest management and trade. Using the outcomes of the needs assessments the meeting employed diverse stakeholder interaction to devise potential finance sector engagement points and to discuss lessons learned.

The GFTN is now working to refine the most relevant strategies from the workshop and soliciting further feedback from relevant experts.

For more information, download the materials provided.