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Making Zero Global Deforestation a Reality

Volunteer Rich Kuhlman participates in tree planting at a stream restored by South River Federation in Annapolis, Maryland. Oct. 28, 2017 (Photo by Will Parson / Chesapeake Bay Program) Creative Commons license via Flickr

Volunteer Rich Kuhlman participates in tree planting at a stream restored by South River Federation in Annapolis, Maryland. Oct. 28, 2017 (Photo by Will Parson / Chesapeake Bay Program) Creative Commons license via Flickr

By Sunny Lewis

ROME, Italy, March 8, 2018 (Maximpact.com News) – Reporting on the status and trends of the world’s forest resources just got easier with a new online tool linked to Google Earth Engine launched this week by the UN Food and Agriculture Organization (FAO). The platform enables countries to boost the efficiency of their reporting and improve the consistency, reliability and transparency of forest data.

The platform developed by FAO with financial support from the European Union and the Government of Finland was presented Monday at a special high-level ceremony in Toluca, Mexico.

In September 2015, 193 world governments made an ambitious commitment. They unanimously adopted the 2030 Agenda for Sustainable Development and the 17 Sustainable Development Goals (SDGs) with their associated targets.

Target 15.2 of SDG 15, Life on Land, boldly calls for halting deforestation worldwide by 2020.

Two years later, governments approved another bold goal. The UN General Assembly adopted the UN Strategic Plan for Forests 2017-2030, which calls for reversing the loss of forest cover and increasing forest area by three percent worldwide by 2030.

We know some progress toward reforestation is taking place. For instance, this week, China ordered 60,000 soldiers to pick up shovels and begin planting trees around Beijing. But how will we know whether or not these sworn goals are being achieved?

The new FAO online platform will allow efficient monitoring of and reporting on forest cover and land-use change to help governments monitor their progress towards these targets and is crucial as countries adopt measures to adapt to and mitigate climate change.

“Assessing the state of the world’s global forest resources requires consistent and reliable data,” said FAO Senior Forestry Officer Anssi Pekkarinen. “The new platform allows countries to improve their capacity to compile up-to-date and precise forest data, reduces reporting burden, and allows to better measure progress towards the 2030 Agenda.”

The new tool offers improved data entry and data visualization, plus review and analysis functions. A more user-friendly interface allows adding data, copying and pasting from existing entry sheets and documenting national data sources.

To help countries where forest information is limited or not available, the platform allows access to related external information as well as geospatial data from global remote sensing products.

The platform will be used for the next 2020 Global Forest Resources Assessment (FRA) report. The most comprehensive analysis of the world’s forest resources, the FRA is produced every five years through an inclusive and country-driven process.

For the first time, the new FAO platform will provide all 171 FRA National Correspondents – officially nominated national forest authorities who are responsible for compiling the country reports, and their collaborators – free access to vast global data repositories and analytical tools with the computing power of Google Earth Engine.

“This announcement builds on our productive three-year partnership with FAO that we signed at COP 21 in Paris,” said Rebecca Moore, director, Google Earth, Earth Engine & Earth Outreach. “We are excited to enable all countries with equal access to the latest technology in support of global climate action and sustainable development.”

Moore says the new tool makes it easy even for people without prior remote-sensing experience to access satellite imagery and other geospatial data to monitor national forest cover and land-use changes over time.

While global rates of deforestation have been cut in half over the last two decades – from a net annual forest area loss of 7.3 million hectares in 2000 to 3.3 million hectares in 2015 – deforestation and forest degradation still continue at alarming rates.

An estimated 80 percent of forest loss is driven by conversion of forest to agricultural land.

To explore ways of halting deforestation and accelerating the planting of new trees and forests, an international conference was held in at FAO headquarters in Rome in late February, with more than 300 stakeholders from many walks of life.

Organized by the Collaborative Partnership on Forests, participation at the conference, “From Aspiration to Action,” was by invitation only. Representatives of government ministries responsible for agriculture and livestock, environment, energy and extractive industries, the private sector and civil society organizations, especially of indigenous peoples, were invited.

“Over the past 25 years, the rate of net global deforestation slowed by more than 50 percent,” said Manoel Sobral Filho, director of the United Nations Forum on Forests, in his keynote address to the conference. “If the current trend of slowing forest loss, combined with forest restoration and plantation efforts continues, a future where we achieve zero net global deforestation can go from being an aspiration to reality.”

Participants stressed that land-use competition between forests and agriculture could be solved by introducing diversified agricultural production systems that integrate trees, crops and livestock with a landscape approach.

Examples include agroforestry systems in which harvestable trees or shrubs are grown among or around crops or silvo-pastoral systems, combining agriculture, forestry and grazing of domesticated animals.

The participants highlighted the need to underpin the stability of livelihoods and the role of forests as providers of ecosystem services by recognizing the many “hidden” values of forests, such as pollination, and by enhancing simple and direct systems of payments for ecosystem services.

In his address, Amedi Camara, minister of environment and sustainable development of Mauritania and president of the Council of Ministers of the Pan-African Agency of the Great Green Wall, stressed the importance of the Great Green Wall initiative for combating desertification, sustainable management of natural resources and the fight against poverty and climate change.

Drought-resistant trees are being planted in a wall across the continent of Africa in an effort to halt the advancing Sahara Desert. (Map courtesy Great Green Wall Initiative) Posted for media use

Drought-resistant trees are being planted in a wall across the continent of Africa in an effort to halt the advancing Sahara Desert. (Map courtesy Great Green Wall Initiative) Posted for media use

The Great Green Wall is an African-led project that aims to grow a nearly 8,000 kilometer (5,000 mile) natural wonder of the world by planting trees across the entire width of Africa to hold back the spreading Sahara Desert. Once completed, the Great Green Wall will be the largest living structure on Earth.

In the final outcome document, participants stressed that the corporate responsibility of agri-business plays a vital role in halting deforestation, which should be supported by international trade instruments favoring deforestation-free commodities.

Small producers would also need better access to services, finance and markets.

Conference participants noted that scaling-up finance and investment for sustainable land use and forests requires positive incentives, improved governance, public-private partnerships and innovative financing instruments.

The indispensable role of youth as agents of change was highlighted, and participants underlined the need to strengthen education at all levels as an essential component of building capacity to halt deforestation and increase forest area.

The outcomes of the conference will be channeled to the UN Forum on Forests taking place in May, and through it, to the UN High Level Political Forum on Sustainable Development that will review progress towards achieving Sustainable Development Goal 15 – Life on Land in July.

Featured image: Cathedral Grove of old growth forest in British Columbia, Canada, August 2011 (Photo by Sang Trinh)


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Billion-Dollar Climate-Smart Ag Fund Opens

A climate smart rice farm near Yogyakarta, Indonesia, 2016 (Photo by Aulia Erlangga courtesy CIFOR) Creative Commons license via Flickr

A climate smart rice farm near Yogyakarta, Indonesia, 2016 (Photo by Aulia Erlangga courtesy CIFOR) Creative Commons license via Flickr

By Sunny Lewis

MEXICO CITY, Mexico, October 19, 2017 (Maximpact.com  News) – Using a combination of public and private funding, Rabobank and UN Environment have created a new billion dollar facility to finance sustainable, climate-smart agriculture.

Rabobank, a Dutch multinational banking and financial services company based in Utrecht, is among the 30 largest financial institutions in the world and is the second largest bank in The Netherlands. Food and agribusiness are the primary international focus of the Rabobank Group.

The bank has recently joined the World Business Council for Sustainable Development (WBCSD) as part of its Banking for Food strategy.

Rabobank now chairs the WBCSD Climate Smart Agriculture Finance Working Group and is working towards its statement of ambition – to make 50 percent more food available and reduce agricultural and land-use greenhouse gas emissions from commercial agriculture by 50 percent in 2030.

Rabobank CEO Wiebe Draijer and UN UN Environment Latin America Director Leo Heileman announced the new partnership at the World Business Council for Sustainable Development’s Council Meeting on Tuesday in Mexico City.

“As the leading global food and agriculture bank, Rabobank recognizes its responsibility to combine long-term stability of food production for the growing global population and the transition to sustainable land use,” Rabobank CEO Wiebe Draijer told the WBCSD audience.

“Our aim is to substantially increase the quality of existing arable land while protecting biodiversity and reducing climate change worldwide,” he said.

The facility aims to provide grants, de-risking instruments and credit to clients involved in sustainable agricultural production, processing or the trade of soft commodities.

The requirements are that these clients must adhere to strict provisions for forest protection, restoration and the involvement of smallholders.

“We need more initiatives that go beyond just talking about the issues at hand,” said Peter Bakker, president and CEO of the World Business Council for Sustainable Development. “For this very reason this partnership is to be commended as it gives financing possibilities to feeding the world while using agricultural lands sustainably.”

Climate-smart agriculture is an approach that aims to tackle three main objectives: sustainably increasing agricultural productivity and incomes; adapting and building resilience to climate change; and reducing or removing greenhouse gas emissions.

Together, the two organizations are inviting other financial institutions to sign up and work actively with global food companies to make sustainable, climate smart agriculture the global standard.

The coalition of two is beginning its activities in Brazil and Indonesia.

In Brazil the coalition has committed itself to the promotion and financing of integrated crop, livestock and forestry farming practices on the 17 million hectares of existing arable land under the management of Brazilian farmers financed by Rabobank.

This activity is part of the strategic WWF Rabobank partnership.

WWF Brazil and Rabobank are jointly exploring with farmers to what extent innovative systems can contribute to using agriculture as a strategy for combating deforestation in the Amazon. They found that both nature and farmers stand to benefit.

Rotating agriculture and livestock on the same land in Integrated Crop-Livestock-Forest (ICLF) systems, is effective according to the results of a joint study that Rabobank and WWF Brazil carried out in partnership with the farmers.

While the yield of ICLF systems may be the same as from regular agriculture, six times less land is required to achieve it. This reduces the pressure of demand for new production areas, helping to combat deforestation. The farmers do not have to maintain as much land, they invest less in herbicides and pesticides, and they contribute to reducing greenhouse gas emissions.

In Indonesia the coalition will finance replanting plans for smallholders in partnership with corporate clients. Goals include forest and biodiversity protection, restoration, and they sustainability certification of oil palm plantations.

Erik Solheim, head of the UN Environment agency, said, “We want the entire finance industry to change their agricultural lending, away from deforestation and towards integrated landscapes, which provide good jobs, protect biodiversity, and are good for the climate.”

“Sustainable land use and landscape restoration is also fundamentally about sound investments and good business. We want to speed up this trend so that it becomes the ‘new normal’ for the finance industry,” said Solheim, a former Norwegian minister of the environment.

Halting climate change and an increasing agricultural footprint on the one hand, while ensuring growth in agricultural production to feed the estimated nine billion people who will be on Earth in 2050, are among the most defining challenges of the 21st century.

Agriculture is the second biggest driver of climate change related emissions, and represents about one-quarter of total annual greenhouse gas emissions.

As the world’s largest food and agriculture bank, Rabobank states on its website that it believes in enough and healthy food for all. The reality is different. Every day 800 million people go to bed hungry.

“It is clear that a different way of agricultural practices is needed that includes incentives and provisions to protect forest ecosystems and restore degraded lands if we are to meet the 2030 Sustainable Development Goals as well as keep global temperature rises to below 2˚C as agreed in the Paris Climate Agreement,” Draijer said.

The two organizations intend to jointly stimulate existing and new best practices, decreasing agriculture’s footprint and restoring the quality of the land used for agriculture and forestry. And to measure progress, they say, generally accepted guidelines need to be established.

Bakker of the World Business Council for Sustainable Development said, “This is just the beginning. We need other WBCSD members and major global players in primary production, the food industry and financial institutions to join this initiative and keep working on finding business solutions for climate smart agriculture.”

Featured image: Girls work on a climate-smart farm in the East African country of Kenya, 2014 (Photo by Cecillia Schubert) Creative Commons license via Flickr


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Unlocking Investment in Africa’s Sustainable Landscapes

Sharing successful techniques for landscape restoration pays off. (Photo courtesy Global Landscapes Forum) Posted for media use.

Sharing successful techniques for landscape restoration pays off. (Photo courtesy Global Landscapes Forum) Posted for media use.

By Sunny Lewis

KIGALI, Rwanda, May 18, 2017 (Maximpact.com News) – Businesses can realize many benefits by investing in restoration of forests, rivers and freshwater, new research finds. Corporations increasingly recognize that working in landscape partnerships can help them address critical issues beyond their immediate supply chains.

Yet, today, only a quarter of the 428 large, multi-stakeholder landscape partnerships surveyed for the research report include businesses.

The report was presented in Kigali on May 16 at the inaugural Forest and Landscape Investment Forum organized by the UN Food and Agriculture Organization (FAO).

The Forum attracted project developers and business leaders from African countries such as Ethiopia, Kenya, Madagascar, Rwanda, Tanzania, Uganda and Zambia, and investors from all over the world to explore a marketplace for effective forest and landscape investment opportunities. Delegates came from

“The importance of promoting a broad spectrum of investments in forests and landscapes in East Africa can’t be underestimated,” said Douglas McGuire, coordinator of the Forest and Landscape Restoration Mechanism for FAO.

“We can no longer afford to miss out on funding opportunities,” said McGuire. “There is so much talent and enthusiasm out there, and it is our hope that this event will make those important connections between project developers and investors that until now have been missing.”

The research report, “Business for Sustainable Landscapes: An action agenda for sustainable development,” is based on an 18-month consultation with input from more than 40 organizations.

It shows how public-private-civic partnerships for integrated landscape management are emerging to address the difficult problems of natural resource degradation, competition, and conflict.

Innovative financial instruments designed to support landscape investments – new blended finance schemes, impact investment funds, investment screens and standards, and investment strategies in sustainable supply chain programs – are attracting investment, the report shows, but the authors point out that greater participation is needed.

The report was produced by EcoAgriculture Partners, the International Union for Conservation of Nature (IUCN) <iucn.org>, the Sustainable Agriculture Initiative (SAI) Platform, and the Sustainable Food Lab , under the auspices of the Landscapes for People, Food and Nature Initiative .

It outlines an action agenda with concrete steps that businesses, finance institutions, governments and landscape program leaders can take to strengthen these partnerships and advance a socio-economic transformation based on sustainable production and economic growth.

“Innovative financial instruments designed to support landscape investments are emerging, and they have the potential to help drive nature-based solutions, such as forest landscape restoration and climate-smart supply chains,” says Stewart Maginnis, global director of IUCN, which co-authored the report.

“IUCN’s Regional Forest Landscape Restoration Hub for Eastern and Southern Africa, which was established last year, is an excellent example of how increased coordination at a landscape level can catalyze resources and technical capacity to deliver tangible benefits for communities,” said Maginnis.

The Forest & Landscape Investment Forum was intended to advance efforts to achieve the Bonn Challenge and the AFR100 target of restoring 100 million hectares of degraded land in Africa by 2030.

Ambitious restoration goals will require large investments. A recent analysis by the FAO and the UN Convention to Combat Desertification, up to US$49 billion worth of investments are needed every year to achieve this and other restoration goals.

Today, investments in forests and landscapes are being made, but they unevenly distributed. While most are made in Latin America, only one percent are in Africa.

“Although landscapes are still not a natural business environment for most companies, the frontrunners are now starting to grasp the potential, take responsibility beyond their direct interests and seek collaborative solutions to address issues like water scarcity, deforestation or ecosystem services by landscape projects,” says Peter Erik Ywema, director for strategy and engagement, SAI Platform.

The nonprofit SAI Platform is the primary global food and drink value chain initiative for sustainable agriculture, founded in 2002 by the multinational corporations Nestlé, Unilever and Danone. Working at the precompetitive level, the SAI Platform’s more than 90 members share knowledge and best practices to support sustainable mInstream agriculture involving stakeholders throughout the food value chain.

The report’s action agenda suggests that to be most effective, landscape partnerships should:

  • Develop a landscape financing strategy
  • Get creative in blending finance
  • Heat up the incubators
  • Ensure finance reaches the farmers and resource managers
  • Leverage grant funds for enabling investments, for asset investments that do not generate financial returns, and to leverage private finance.
  • Socialize innovations among peer institutions

“Investors can do much more to identify promising integrated landscape investments. Innovative investment models from groups like Commonland, IUCN, The Nature Conservancy’s NatureVest, the Livelihoods Fund, African Wildlife Foundation’s African

Wildlife Capital, and the Coalition for Private Investment in Conservation, are demonstrating ways to link agriculture

and conservation to contribute to landscape goals, incubating and providing finance for them,” the report advises.

Potential investments by local businesses and farmer cooperatives often need to be supported during the development phase to reach the point where they are attractive to debt or equity financiers.

The report points out “an urgent need for major development finance institutions to establish business incubators with public-civic-private funding to provide pre-financing and advisory services to improve business performance/design and consistency with landscape goals.”

These services and funding could be paid back once the business becomes profitable.

“Collaborative landscape approaches align stakeholders in a particular place to resolve complex issues that cannot be successfully resolved by actors working alone,” said Sara Scherr, president of EcoAgriculture Partners and one of the key authors of the report.

“These partnerships reflect growing recognition that long-term business success is tied to healthy communities and ecosystems.”


Featured Image: This Kenyan farmer is happy with his thriving papaya grove, showing what investment can accomplish. (Photo by the International Centre for Tropical Agriculture (CIAT)) Creative Commons license via Flickr

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Maximpact’s consultant network has a sustainable agricultural experts that can help your organization.  Find capacity services at Maximpact Advisory and help your business and increase the capacity of your organization to influence society. Contact us at info(@)maximpact.com and tell us what you need.

Carbon Budgets Ignore Trees on Farms

Agroforestry Iowa

Trees and grass established as part of a riparian buffer on the Ron Risdal farm in Story County, Iowa. The Iowa State University AgroEcology team has helped landowners along this stream, Bear Creek, establish miles of buffers and earn the stream recognition as a U.S. national demonstration site, June 6, 2016 (Photo by U.S. Dept. of Agriculture) Public domain

By Sunny Lewis

NAIROBI, Kenya, August 30, 2016 (Maximpact.com News) – Globally, 1.2 billion people depend on agroforestry farming systems, especially in developing countries, the World Bank calculates. Yet, trees on farms are not even considered in the greenhouse gas accounting framework of the Intergovernmental Panel on Climate Change (IPCC).

Agroforestry systems and tree cover on agricultural lands make an important contribution to climate change mitigation, but are not systematically accounted for either in global carbon budgets or in national carbon accounting, concludes new research conducted by a team of researchers in Africa, Asia and Europe.

The scientists assessed the role of trees on agricultural land and the amount of carbon they have sequestered from the atmosphere over the past decade.

Their study, titled “Global Tree Cover and Biomass Carbon on Agricultural Land: The contribution of agroforestry to global and national carbon budgets,” looks at biomass carbon on agricultural lands both globally and by country, and what determines its distribution across different climate zones.

Robert Zomer of the World Agroforestry Centre in Nairobi, lead author of the study, said, “Remote sensing data show that in 2010, 43 percent of all agricultural land globally had at least 10 percent tree cover, up from eight percent in the preceding decade.

 “Given the vast amount of land under agriculture,” Zomer said, “agroforestry may already significantly contribute to global carbon budgets.

Large forest areas in the tropics are still being cleared for agricultural production to feed the world’s swelling population, now approaching 7.5 billion.

The researchers found that while tropical forests continued to decline, tree cover on agricultural land has increased across the globe, absorbing nearly 0.75 gigatonnes of the greenhouse gas carbon dioxide (CO2) every year.

Study results show that existing tree cover makes a major contribution to carbon pools on agricultural land, demonstrating the potential to add to climate change mitigation and adaptation efforts,” said Jianchu Xu of the World Agroforestry Centre.

If tree cover is accounted for, the total carbon stock is over four times higher than when estimated using IPCC Tier 1 estimates alone,” said Xu.

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Acacia tree seedlings in Ma Village, Vietnam, May 30, 2016 (Photo by the International Center for Tropical Agriculture) Creative Commons license via Flickr

In the IPCC system, a tier represents a level of complexity used for categorizing emissions factors and activity data. Tier 1 is the basic method; it utilizes IPCC-recommended country-level defaults. Tiers 2 and 3 are each more demanding in terms of complexity and data requirements.

Given the vast stretches of agricultural land where the potential for tree cover is not yet realized, the study suggests that a huge greenhouse gas mitigation potential exists and should be explored more systematically.

For this study, researchers mapped and tabulated regional and country-level variation in biomass carbon stocks and trends globally, and for each country.

Brazil, Indonesia, China and India had the largest increases in biomass carbon stored on agricultural land, while Argentina, Myanmar, and Sierra Leone had the largest decreases.

The results of our spatial analysis show that trees on agricultural land sequestered close to 0.75 gigatonnes of carbon dioxide globally per year over the past decade,” said Henry Neufeldt, head of climate change research at the World Agroforestry Centre.

If we can harness good policies to enhance positive examples and stop negative trends, trees in agricultural landscapes can play a major role in greenhouse gas mitigation,” Neufeldt advised. “But no one should say that this is already solving the problem for agricultural emissions as long as we do not know what is actually happening on the ground.

 The Global Tree Cover and Biomass Carbon on Agricultural Land analysis is part of on-going research at the Center for Mountain Ecosystem Studies, an applied research laboratory jointly managed by the Kunming Institute of Botany, part of the Chinese Academy of Sciences, and the World Agroforestry Centre. Their research is focused on mountain ecosystems, biodiversity, traditional communities, and development pressures affecting natural and cultural resources.

Identifying which climate-smart agriculture practices should be supported for upscaling is an investment question, says Dr. Leocadio Sebastian, regional program leader for the CGIAR  Research Program on Climate Change, Agriculture and Food Security (CCAFS) in Southeast Asia.

Answering this question can be most successful when it is the outcome of a participatory planning process during which local farmers share their knowledge in the development of a village-level land-use planning map to help improve community farming decisions.

As one of the most vulnerable regions in the world, Southeast Asia is on the front lines of the battle against climate change. Hundreds of millions of people are at risk as increasing temperatures, flooding, and rising sea levels threaten livelihoods, incomes and food security.

Ma Village, population 729, lies in Vietnam’s Yen Bai province. It is one of CCAFS’ six Climate-Smart Villages in Southeast Asia. These communities are prone to climate change impacts, so CCAFS has been introducing climate-smart agriculture practices to enhance food security and capacity to adapt to and mitigate climate change.

Despite its great agricultural potential, the sustainability and profitability of agricultural production in Ma Village remain inadequate as the climate-risk area suffers from the depletion of natural resources, land degradation, and water pollution.

During spring, water shortages due to deforestation compromise the supply of irrigation water, which affects agricultural production, with the rice paddies most at risk.

A community land-use planning activity this year concluded with the farmers’ decision to replace the cultivation of rice crops with drought-tolerant cash crops during the spring season and support reforestation in the upland area of the village.

In residential areas, farmers agreed to replace mixed gardens with fruit trees such as pomelo, lemon and banana.

Village leader Le Van Tam said, “Recovering natural forest and growing more trees within resident land is an option to solve water shortage, soil erosion, and many other unfavored weather events.

Community-based forestry may hold great promise for sustainable development, but it has not yet reached its full potential, according to a February report by the UN’s Food and Agriculture Organization, “Forty years of community-based forestry: A review of its extent and effectiveness.

 While almost one-third of the world’s forested areas are under some form of community management, the approach has not reached its full potential.

 The FAO report recommends that governments provide communities with secure forest tenure, improve regulatory frameworks, and transfer to them appropriate and viable skills and technologies.

Indigenous peoples, local communities and family smallholders stand ready to maintain and restore forests, respond to climate change, conserve biodiversity and sustain livelihoods on a vast scale,” said Eva Müller, director of FAO’s Forestry Policy and Resources Division.

What is missing in most cases is the political will to make it happen,” said Müller. “Political leaders and policy makers should open the door to unleash the potential of hundreds of millions of people to manage the forests on which the whole world depends for a better and sustainable future.”


 Featured Images: Trees on a tea farm in China, April 2012 (Photo by vhines200) Creative Commons license via Flickr

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The Power of Reforestation in China

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Before the Chairman Mao regime came into power, China was a heavily forested country. In fact, the Forbidden City was made entirely out of wood. When Mao took over, he wanted to make China a steel country, during the Great Leap Forward (1958–62). He forced every farmer to use backyard steel furnaces for steelmaking, which required vast amounts of wood to maintain the intense level of heat required for their furnaces. A massive deforestation effort took place to support Mao’s wishes. As a result, China tore down millions of acres of forests, which has had an enormous impact on the environment.

Take air pollution in Beijing, for example. According to data gathered by the US Embassy in the nation’s capital, Beijing experienced 200 days in 2014 in which the air pollution was considered “unhealthy”. Only 10 days of that year were deemed “good”.

People are starting to stand up and take notice. Today, China has the world’s largest reforestation program. During a recent visit, I drove four hours straight along one of its reforestation programs. Because of my work as an architect and my consequential plane travel, I wanted to personally offset my carbon footprint by planting trees there. That’s why I started a reforestation initiative in China in 2014, which has since planted over 6,000 trees. Within 17 years, the forest will grow so thick as to bring down the area’s temperature by 2.5 degrees Celsius. The cooling effect will lead to more rain, which will lead to more trees and so the cycle continues.

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Wolfgang Frey at Chinese reforestation program site.

The purpose for our reforestation project is to try to minimize our CO2 emissions by offsetting our carbon footprint. In general, we build passive houses, which are a low carbon alternative to traditional construction that requires very little heating or cooling. At the same time, even passive houses emit some level of CO2. However, not building is not an alternative.

One alternative is, however, to build with wood. Our Woodhouse project, which was showcased at the Expo in Shanghai 2010, was built with the amount of wood it would have taken to heat the building for 20 years. We had a double CO2 savings effect: first, it is a house built according to the passive house standard and does not use much oil or wood to heat (CO2 savings #1). Second, we substituted materials with a large carbon footprint such as concrete or materials that need to be burned by wood (CO2 savings #2).

Wood pellets as a heat source are more than troublesome because the emission stemming from burning wood in private ovens is a) not regulated and b) is catastrophic for the environment.

I grew up in the Black Forest in Germany. My father would chop down a tree and leave the roots, crown and branches to regenerate the soil through composting. Today, the entire tree is taken, which is an environmental disaster. This low-grade wood is especially used for pellets. 50% of minerals are in the roots and crown of the tree. Removing them from the forest floor leaves the soil barren. Deforestation and desertification are inevitable outcomes.

The good news is we architects have developed a few solutions to the world’s environmental problems. Through smart buildings, smog prevention and reforestation, we can make a difference. In my view, everyone should live more sustainably, whether they are architects or not.

While there are many ways to build in a sustainable and mindful fashion, our environment is always impacted in some way by construction. The goal is to minimize our negative impact by offsetting our carbon footprint, becoming more aware of the ultimate outcome of our building decisions. Plastic window casings, for instance, have a much higher recyclability than wooden framed windows. At first glance, wood may seem like the more ecological choice. Over the long term, it is not.

There are two major challenges to creating environmentally sustainable buildings: technology and psychology. How do we technologically solve our challenge to build sustainably? We have many ways to do that, starting with passive houses. Second, how do we improve people’s mindsets so they live more sustainably? That is the larger challenge, I think. Nonetheless, both issues have to be kept in mind in order to create environmentally sustainable buildings.

Sustainability needs to be trendy so people will catch on. The trend then needs to move toward durability, much like seat belt laws. What was once optional is now mandatory and most people abide by it without even thinking. A sustainable lifestyle should be as automatic. That is at least the goal.


portrait-wolfgang-freyWolfgang Frey, a dynamic, sought-after public speaker and architectural visionary, has headed Frey Architekten since 1991. Founded in 1959 by Friedrich Frey, the architectural office is located in the German eco-city of Freiburg im Breisgau. As one of the pioneers in sustainable architecture, Frey Architekten has been using solar panels since 1972. In addition, the office has an international presence in China, Russia and other parts of Europe. www.freyarchitekten.com

Indonesia, EU License Legal Timber Trade

IndonesiaLogs

By Sunny Lewis                                                                      Follow us at: @Maximpactdotcom

BRUSSELS, Belgium, May 10, 2016 (Maximpact.com News) – Indonesian President Joko Widodo, European Commission President Jean-Claude Juncker, and European Council President Donald Tusk will promote trade in legally produced timber between the European Union and Indonesia through the start of the first Forest Law Enforcement, Governance and Trade (FLEGT) licensing plan.

The market effects of the plan are being monitored by the FLEGT Independent Market Monitoring mechanism, a multi-year project supervised by the International Tropical Timber Organization (ITTO) and financed by the EU.

The April 21st announcement, on the occasion of President Widodo’s visit to Brussels, follows a joint assessment of Indonesia’s forest management.

Investigators found that illegal logging, which destroyed so much of Indonesia’s rainforest, has decreased since 2000, and Indonesia is fully ready to implement the Indonesia–EU Voluntary Partnership Agreement.

The EU can now complete the moves that will make Indonesia’s FLEGT licensing fully operational.

When these procedures are complete, the Indonesia–EU Joint Implementation Committee will recommend a date for FLEGT licensing to start, expected later in 2016, making Indonesia the first country to deliver licensed timber.

In a joint statement, presidents Widodo, Juncker and Tusk said, “Indonesia and the EU are close partners in addressing environmental challenges. We are committed to the sustainable management of forests and to fighting illegal logging and related illegal trade.”

“The EU welcomes the implementation for all types of wood products of the Indonesian Timber Legality Assurance System. We welcome the full implementation of the Indonesia-EU Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade and agree to move expeditiously towards the start of the FLEGT licensing scheme. We look forward to the first shipment of FLEGT-certified timber from Indonesia in the coming months.”

“The EU is committed to ensuring the uniform and effective implementation of the European Union Timber Regulation,” the three presidents said.

FLEGT-licensed products automatically meet the requirements of the EU Timber Regulation, which prohibits EU operators from placing illegally harvested timber and timber products on the EU market.

With mandatory checks of the timber legality assurance system that meet international market requirements in place, the government of Indonesia expects timber product exports to increase, delivering more rural jobs, income and growth.

Indonesia’s rainforests are the third largest in the world, but they are also among the most endangered. Much of the country’s forests have disappeared into the country’s enormous timber processing mills.

A 2007 UN Environmental Program report estimated that 73 to 88 percent of timber logged in Indonesia was illegally sourced. More recent estimates place the figure at 40 to 55 percent.

Even forests in national parks are at risk. A 2010 report by five U.S. environmental groups quotes the Indonesian government as admitting that timber is illegally harvested from 37 of the nation’s 41 national parks

With EU support and in coordination with the Indonesian FLEGT Licensing authorities, the FLEGT Independent Market Monitoring mechanism is responsible for regularly assessing the impact of licensing on trade from Indonesia and the other 14 tropical countries engaged in the FLEGT VPA process.

Benefitting from support from the European Commission and EU Member States, the FLEGT VPA in Indonesia has strengthened forest governance by increasing transparency, accountability and stakeholder participation in decisions about forests.

Indonesia has boosted legal trade, modernized and formalized its forest sector, and improved business practices, enabling many thousands of businesses to meet market demand for legal timber.

With EU support, Indonesia has trained nearly 15,000 local government supervisors, sustainable forest management technicians, staff at regional forest management offices, and village heads.

Suar wood coffee tables at IndoGemstone Bali, Indonesia's rustic home decor and natural style furniture manufacturing company. (Photo by IndoGemstone) Creative Commons license via Flickr

Suar wood coffee tables at IndoGemstone Bali, Indonesia’s rustic home decor and natural style furniture manufacturing company. (Photo by IndoGemstone) Creative Commons license via Flickr

Indonesia has used its timber legality assurance system to audit the legality of more than 20 million hectares of forests and more than 1,700 forest industries, an unprecedented level of scrutiny.

Now over 90 percent of Indonesian timber exports come from independently audited factories and forests, and the remainder will be audited in the coming months.

To ensure that small businesses such as furniture-makers are not left out, Indonesia allocated seven billion rupiah in 2015 to help more than 1,200 small and medium-sized enterprises become certified legal under the timber legality assurance system.

To date, 93 percent of Indonesia’s small and medium-sized furniture exporters have been certified legal, enabling them to export their products to an increasingly educated international market.

Indonesia is one of the world’s largest producers of tropical timber, accounting for around 17 percent of the global value of tropical timber trade in 2013, according to the IMM Baseline Report. The country exports sawnwood, plywood, pulp and paper, furniture and handicrafts.

The majority of Indonesian forest product exports are to China, Japan, South Korea and the EU. In 2014, the EU accounted for 8.9 percent of the value of all timber product exports from Indonesia, up from 8.4 percent in 2013.

EU imports of wood and wood furniture from Indonesia in 2015 had a value of €803 million, 17 percent higher than in 2014. In 2015, Indonesia was the second-largest tropical supplier of wood and wood furniture products to the EU, just behind Vietnam, and it accounted for 21 percent of all EU imports from tropical countries.


License Legal Timber Trade images:

Main image: A barge transporting logs in Central Kalimantan, Indonesia. (Photo by Achmad Ibrahim for Center for International Forestry Research, CIFOR) Creative Commons license via Flickr

Featured image: These illegal logs were seized, while in transit, and are impounded at district police offices, Riau, Sumatra, Indonesia, 2010. (Photo by Sofi Mardiah for Center for International Forestry Research, CIFOR) Creative Commons license via Flickr

 

 

World Forestry Congress: Forests Are ‘More Than Trees’

by Sunny Lewis

DURBAN, South Africa, September 16, 2015 (Maximpact News) – Investing in forestry means investing not only in trees but in people and in sustainable development, delegates to the 14th World Forestry Congress in Durban affirmed last week.

Held with the theme “Forests and People: Investing in a Sustainable Future,” the week-long meeting from September 7-11 took place under the auspices of the UN Food and Agriculture Organization (FAO). The first World Forestry Congress was held in Rome in 1926; meetings have taken place roughly every six years since.

This was the first World Forestry Congress organized in Africa. Nearly 4,000 delegates from 142 countries represented governments and public agencies, international organizations, the private sector, academic and research institutions and nongovernmental, community and indigenous groups.

Congress Secretary-General Trevor Abrahams told delegates of the importance of restoring hope, dignity and social capital for sustainable forest management, particularly amongst youth.

Prince Laurent of Belgium called for an eco-contribution from cancelled debts to be allocated to a fund to safeguard the environment.

Sessions focused on people-centered forestry, socioeconomic issues, and the role of forests, trees and forestry in national economic development.

In their outcome document, the Durban Declaration, delegates offered a vision of forests that play “a decisive role” in ending hunger, improving livelihoods and combating climate change.

The Durban Declaration says, “Forests are more than trees and are fundamental for food security and improved livelihoods. The forests of the future will increase the resilience of communities by providing food, wood energy, shelter, fodder and fibre; generating income and employment to allow communities and societies to prosper; harbouring biodiversity; and supporting sustainable agriculture and human wellbeing by stabilizing soils and climate and regulating water flows.”

“Sustainable forest management requires integrated approaches to land use in addressing the drivers of deforestation and conflicts over land use,” the declaration states. Gender equality and the enthusiasm of the youth as a source of inspiration were emphasized.

“The declaration reflects the extremely rich and diverse set of viewpoints and experiences of all participants in the Congress, who recommended ways to make the vision a reality,” said Tiina Vähänen, deputy director of FAO’s Forest Assessment, Management and Conservation Division.

An international five-year action plan to recognize the role of trees and forests in ensuring sustainable management of one of the world’s largest sources of freshwater was introduced at the meeting.

At a panel discussion on investments to build a resilient future, World Agroforestry Centre chief Tony Simons said that for sustainability and resilience to be “operational and not just aspirational,” managers must focus on individual action; sustainable production and consumption; and use the UN’s Sustainable Development Goals as a platform to promote better forestry.

Simons said there is a dearth of bankable projects. He said investors need to see strong, viable pilot cases before they can commit resources.

At the Congress, FAO released its Global Forest Resources Assessment 2015, covering 234 countries and territories.

It finds that the world’s forests continue to shrink as populations increase and forest land is converted to agriculture and development. Still, over the past 25 years the rate of net global deforestation has slowed by more than half.

Roughly 129 million hectares of forest – an area almost equal in size to South Africa – have been lost since 1990, finds the FAO’s assessment.

Yet an increasing number of forest areas have come under protection, while more countries are improving forest management with better monitoring of forests and a greater involvement of local communities in planning and policy development.

FAO Director-General José Graziano da Silva said, “The direction of change is positive, but we need to do better. We will not succeed in reducing the impact of climate change and promoting sustainable development if we do not preserve our forests and sustainably use the many resources they offer us.”

During the closing dinner gala, Gertrude Kenyangi of Uganda was presented with the Wangari Maathai Forest Champions Award 2015 in recognition of her extraordinary efforts to improve and sustain forests in southwestern Uganda and the people who depend on them. The award carries a cash prize of US$20,000.

Kenyangi described how the Women and Environment Development Organization she founded supports women to lead the way in grassroots agro-forestry initiatives in Uganda and across Africa.


Featured Image: Big trees in a Ugandan forest (Photo by Annette Bouvain creative commons license via Flickr)

Slideshow Images: 01: Miss Earth South Africa 2014, Ilze Saunders, with drummers, creates excitement in the corridors of the World Forestry Congress, September 8, 2015 (Photo copyright FAO / Giuseppe Carotenuto, Editorial Use only via Flickr) 02: Flashmob of youths at the World Forestry Congress, Durban, South Africa, September 9, 2015 (Photo copyright FAO / Giuseppe Carotenuto, Editorial Use only via Flickr) 03: Government officials enter the iNkosi Albert Luthuli Convention Center in Durban, KwaZulu-Natal, South Africa on opening day of the World Forestry Congress, September 7, 2015 (Photo courtesy Government of South Africa)

Spotlight Deal: Maximpact forestry deals achieving positive results

Maximpact spotlight deals shine a light on the forestry sector. Currently Maximpact Eco has over thirty forestry deals listed and many of these are seeing a high degree of interest from impact and sustainability investors.

The number of responsible investments in the forestry sectors of the emerging countries may still be limited due to uncertain market environments and a low level of investment experience. However, there are attractive deals in the marketplace now; and those listed with Maximpact Eco are proving attractive to investors looking to place capital in sustainable businesses.

Twenty of these deals have been chosen and show cased to a select group of the Maximpact Eco investor community. As a result six of them were short listed and three of them are now in advanced discussion.

These are very promising results for a sector where, in large investment portfolios (USD 1 billion), forests and forestry usually represent only around one percent of the total portfolio. Yet it isn’t enough: From an impact point of view, more investment is needed worldwide in order to effectively combat forest exploitation combat carbon related issues and build bridges between sustainable forestry and investors.

The fact that forestry deals are getting substantial traction is a step in the right direction, demonstrating that, when it comes to sustainable forestry and impact investors, the attraction is mutual.

Interested in forestry deals? Login or Register now.

Sustainability Drives Impact Investment in Natural Resources

by Marta Maretich

Natural resources have always been precious to mankind. Today, they are more in demand than ever. Population growth, climate change and the rising affluence of developing nations are putting a strain on the planet&rsquo;s limited resources. Water, arable land, food, fuel and raw materials are seeing a period of unprecedented demand and there is worldwide concern about future shortages and the destruction of ecosystem services, such as photosynthesis, pollination, flood prevention and climate stabilization, that results from over-exploitation.

But while the pressures on our resources are getting bigger; and the consequences of depleting them are getting clearer; there are positive developments, too. A global movement for sustainability is now maturing and this is encouraging an explosion in the kind of responsible resource businesses that belong in our impact portfolios.

Sustainability goes mainstream

Once a thing of the green fringe, sustainability is now mainstream and this is one of the factors that makes natural resources attractive investments now. Governments are the key drivers of today’s sustainability agenda as they increasingly use policy, regulation and subsidy to support the development of new kinds of businesses and convert existing businesses to more sustainable practices. Working in concert with governments, international bodies like the UN, the WEF and the World Bank are launching programs designed encourage sustainability and establish standards in a range of resource sectors. Natural resources are seen as key to development for some of the world’s poorest communities; including rural smallholders and indigenous peoples; and this puts them at the center of international efforts to raise living standards.

Meanwhile, public awareness of sustainability issues increasingly drives consumer choices. Businesses; even those that once ignored the idea; now know that being able to demonstrate sustainability makes economic sense. Jobs in sustainability are multiplying as businesses hire analysts, consultants and other specialists to manage their sustainability and reporting commitments.

Resources take center stage

With sustainability a growth area for world markets; and a priority for many world governments; there is a new focus on natural resource investing. The emphasis now is on finding ways to make more of nature’s gifts while preserving and maintaining them for the future. New businesses; and new ways of doing business; are springing up, encouraged by government policy and shaped by the expertise of development and philanthropic organizations who have blazed trails in the areas of sustainable use of resources.

This is good news for impact investors looking to place their capital in the natural resources sector. Here are some of the trends and developments in four resource areas: Oceans, Minerals, Forestry and Land.

Oceans

The world’s salty waters have been a focal point for resources-based activity in recent months. Concerns about overfishing and acidification, a consequence of the seas absorbing high CO2 emissions, are leading governments, environmental campaigners and business leaders to place a new emphasis on the oceans and this is changing the investing landscape.

On the governmental side, 2013 saw the US instituting the National Oceans Policy, joining other governments including Australia, South Africa, Namibia and the Philippines in establishing comprehensive, future-focused policies for ocean resource management. The social enterprise sector kept in step, highlighting the issue by including an ocean themed “track” at SOCAP13. For the first time veteran campaigners and ocean champions discussed ocean topics along with journalists, entrepreneurs, and impact investors from other sectors including small scale agriculture, health, and poverty alleviation; all of which are connected to ocean and coastal issues. Meanwhile, in the private sector, The Economist is throwing its weight behind sustainability issues as it plays host to the World Oceans Summit in California in February of this year.

These developments set the stage for a mini-boom in sustainable marine businesses in areas like fishing, aquaculture and energy and mineral extraction. New government regulations will also drive growth in compliance industries, such as environmental remediation and business-to-business services providing sustainability reports and the like.

Minerals

Mining; and its products, mineral; have a bad reputation in the world of sustainability. Mineral extraction is widely associated with human rights violations, environmental damage and conflict. For those reasons it remains a largely unexplored sector for impact investors. Yet in the mainstream financial markets, mining is big business, with growth driven by demand from the resource-hungry emerging economies like China, India and Brazil; demand that is not going away anytime soon. This fact, plus the alluring possibility of helping to bring change to the mining sector, means that impact and sustainable investors should think again about minerals when looking for places to commit their capital.

The tools for change may already be in our hands. An excellent piece of research conducted by the International Institute for Environment and Development (IIED) charts the significant progress made in mining policy, oversight and governance over the last decade, especially by the International Council on Mining and Metals (ICMM), a coalition of mining companies that has embraced sustainability standards and put issues like indigenous rights, community development and climate change on its agenda.

The IIED report indicates a rising awareness and acceptance of sustainability in the industry itself; a hopeful sign for the future. The challenge for the next 10 years, it concludes, will be implementing those standards we now have more widely. Such a move could transform the mining industry; and impact investors, with an insistence on standards and reporting, could play an important part in this transformation.

Groups like the Alliance for Responsible Mining (ARM), which works on behalf of an estimated 20 million small-scale and artisanal miners worldwide, are already hard at work bringing change. They have developed supply chains for sustainably mined products and created the Fairtrade and Fairmined gold standards for the industry. Deals have already been struck with jewellery manufactures and, like conflict-free diamonds before them, these ethical products should find favor with consumers as they hit the marketplace in the near future.

Conflict minerals have been a contentious issue for some time and a measure of progress has been made in addressing the human and environmental costs of mineral extraction in places like the Congo. Electronics industry giant Intel has now moved to make all its microprocessors free of conflict minerals. The industry pressure group, the Electronics Industry Citizen Coalition (EICC), has compiled a useful list of conflict-free smelters and refiners, while the NGO the Enough Project has ranked companies for their use of conflict-free minerals.

Yet the path ahead is not yet clear for sustainable mining; and this is another reason for impact and social investors to enter this market. A powerful coalition of business leaders recently petitioned a panel of federal judges to overturn a provision of the 2010 Dodd-Frank law that requires companies to disclose their use of minerals from Africa. This would be a major setback for the movement for sustainable mining. However, the presence of more social investors and conscientious corporations in this resource sector could make all the difference to the way mining develops in the future.

Forestry

Unlike mining, forestry is already a popular focus for impact investors. Many sustainable forestry enterprises have cropped up in recent years, working to conserve; and sustainably exploit; wooded environments across the globe and these remain attractive investments.

It hasn’t all been plain sailing, though. Carbon offset schemes were central to many forestry enterprises and the collapse of the world carbon markets in 2012 was a blow to the sector. Some forestry sustainability accreditation programs have come under fire, too, and there has been a shakeout in certification schemes that many hope will lead to a more reliable system.

Despite this, impact investors, like the Packard Foundation, have largely stuck with forestry because of its many wider benefits. Sustainable forest management supports biodiversity and habitat conservation, creates local jobs, protects indigenous communities, fosters eco-tourism and recreation, contributes to food stability, and aids climate stabilization; as well as having the potential to generate diverse revenue streams and attract tax breaks.

Meanwhile new technologies are expanding the horizons of sustainable forestry. Innovations, such as the use of drones and sophisticated geo-mapping techniques, are advancing the science of forest management, making it possible to do more with woodlands while we protect them. Eco-tourism and boutique woodland businesses are taking off in many parts of the world. The link between agriculture and forest habitats is contributing to the search for ways to bring prosperity to some of the world’s poorest communities. At the same time, big multinationals such as paper manufacturers are bowing to regulatory pressure and seeking ways to develop more sustainable supply chains, a shift which will have implications for sustainable forestry businesses.

Land

Land is a resource that offers a host of opportunities for impact investing both in emerging and developed economies. Essential to human life and prosperity, land produces food, water, wood, fibre, fuel and minerals and, when managed responsibly, it also provides vital ecosystem services such as photosynthesis, pollination, nutrient cycling, water purification, soil formation, climate stabilisation and flood prevention.

Increasingly, land use and ownership is seen as the key to solving many of the world’s most pressing environmental and social problems. Large international organizations like the United Nations Convention to Combat Desertification (UNCCD) are now promoting responsible land investments as a way to halt land degradation and preserve the integrity of our natural capital. Land and property rights are also central to poverty alleviation, and securing land for use by rural populations is a priority for many development organizations.

Yet, as is true across the natural resources sector, there is a right way and a wrong way to invest in land. Oxfam has raised concerns about a global land grab where big investors, often foreign governments and pension funds, buy up large tracts of farmland, especially in parts Africa, Latin America and Asia, squeezing local people out. Their report drew attention to the negative impact on local communities of the wrong kind of investing and led to a call to the World Bank to end its participation in these deals.

To make sure they are part of the solution, not part of the problem, impact investors need to be aware of the issues. The right kind of investing respects the rights of locals to “Free and Prior Informed Consent”, promotes land rights and good land governance and fosters food security both locally and internationally. To avoid possible pitfalls, investors would do well to tune into the conversation about land use here and here, and subscribe to sets of principles like these and these.

In the developed world, land investment is often part of a move to a more green and sustainable lifestyle. Iroquois Valley Farms, chosen as one of the Impact Assets 50, leases farmland to organic farmers, while Beartooth Capital acquires western ranches for conservation and use as eco-tourism destinations. In cities, land acquisition plays a part in neighborhood regeneration and community home ownership schemes. With these models turning profits, and the movements behind them gaining popularity, we can expect to see more opportunities for land investment in developed economies in the future.

Conclusion

Natural resources have long been a promising sector for impact investors, especially those with an emphasis on the environment. What’s new is the increasing involvement of governments in supporting sustainability. For some natural resource industries, this is putting sustainability on the map for the first time. For others, government support and improved standards are advancing the development of sustainable practices and sparking innovation. All of this is good news for impact investors who want to put their capital behind businesses that contribute to the future health and prosperity of the planet and its inhabitants.

Image credit: 123RF

Building Bridges Between Impact Investors and Sustainable Forestry

photograph of trees in a woodGuest post by Alexander Watson, CEO OpenForests

My name is Alexander Watson, I am a forestry scientist with a background in Social Banking and Social Finance and founder of OpenForests, a consulting company with the mission to finance and develop social and biodiverse forestry projects.

The challenge

The annual worldwide deforestation is about 13 million hectares, predominantly in the tropics. We believe that reforestation is one opportunity to counter deforestation. At the same time it can help to satisfy the increasing demand for timber, which is estimated to grow by 50 percent by 2050.
This is why considerable investments in the forestry sector are needed to effectively combat forest exploitation. Responsible investments in the forestry sectors of the emerging countries are still limited due to uncertain market environments and a low level of investment experience.

Lessons Learned

The goal of OpenForests is to understand these barriers and deliver services to overcome them and unleash the existing investment potentials. But how do we do this in practice? In this article I am going to share our experience working with project developers and investors and present tools of which we think are useful to build strong bridges between investors and projects.

In recent years we have been working in Latin America, Europe and Asia and conducted various feasibility studies and developed sustainable forestry and agroforestry investment projects. We found that the major limitation for project developers to scale up their operations was a lack of sufficient funding. As reforestation projects are very capital intensive in the beginning, project developers often need of seed funding. This is especially true in the case of sustainable reforestation with long rotation cycles.

But why do some projects obtain funding and others not? On the project level we found common patterns that kept investors from funding these projects.

The Power of Data Management and Reporting

First, we learned that the data management and reporting was often insufficient. Although in many cases project developers have shown a high level of experience in managing their forest assets, forestry projects often needed to improve the consistency and timeliness of their forestry data.

A plausible, consistent and complete project documentation is required in order to make projects attractive to investors. Such documentation has to include financial data as well as social and environmental performance metrics. Only by understanding project processes it is possible to improve performance while facilitating a transparent project insight for investors. At OpenForests we improve project management and documentation by providing a customized Forest Information System, a centralized geo-database to organize and share project information amongst all participants.

Investors Need Better, More Transparent Information

Now turning to the investors’ side. When working with investment groups from the U.S. and Europe they revealed their great interest in extending their investment activities to emerging forest investment countries in Latin America, Africa and Southeast Asia. This interest is mainly due to the higher returns that can result from the relatively higher forest growth rates and lower land and labor costs, than it would be feasible in developed countries.

However, investors hesitate because of the lack of high quality information about the forestry sectors of these countries. Furthermore forest investment markets are often poorly organized and non-transparent which makes it difficult to source investment opportunities.

To help investors get the information they need, we developed services and tools like a set of risk assessment guidelines, a marketplace for sustainable forest investments and drone-based remote sensing system, to help investors to assess risks more accurately. Using modern information technology, the complexity and heterogeneity of forest ecosystems, management and market environment can be captured and understood more easily. Equipped with these tools, investors are able to explore high potential emerging forest forest investment markets more securely.

With our work, we wish to reinforce and unleash the potentials of the emerging forest investment markets and make Impact Investing for Sustainable Forestry a strong force countering deforestation.

For more about OpenForests and to source forestry deals.

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How to Find Impact Investors to Finance Your Sustainable Business

By Marta Maretich

Originally posted on the OpenForests blog. OpenForests is a consultancy specializing in sustainable forestry projects.

So, you’ve written the business plan. Congratulations! (And thanks to OpenForests for their useful guide to writing a business plan for a sustainable forestry enterprise.) Now you’re ready to look past the trees and focus on the forest; the wide world of impact investment. It’s time to go out and raise capital. But where do you start?

Decide what kind of investment you’re looking for

Capital is capital, right? Not exactly. There are many different ways of structuring finance and many different ways a business can relate to its investors. Writing your business plan has given you an idea of the amount of investment you need. Now it’s time to think about the kind of investment you’re looking for.

Are you looking for debt or equity? How long will you need the money for? Do you want partners who will offer more than just capital, who will give you advice and contacts, for example? Do you need pure capital, or a blend of capital and grants?

To find out which model might work for you, tune in to the wider world of impact investing and learn about your options. Find projects similar to your own and research how their funding is structured and who their investors are. Websites and company reports can help you form a picture of what’s out there and develop more knowledge about funding choices.

Build impact measurement into your business plan

In the world of impact investment, impact measurement is as important as financial return. Impact investors look for financially viable businesses that have clear, defined and above all measurable social and/or environmental outcome targets.

To succeed with impact investors, impact metrics need to be prominent in your business plan and your pitch. You’ll need to decide which measures will mean success for you, then define how you will measure and report them. This blog by Jonanthan Kuo shows how important metrics are to Acumen, a successful impact investing pioneer.

How do you know which metrics to include? There are several systems on offer right now but IRIS, from the GIIN is a good starting place for those new to impact metrics. This standardized system offers a broad range of metrics that can be adapted to suit the needs of your business. The key is to choose metrics that are realistic, practicable, fit into your operations and serve your strategic goals. For more on the best way to “do metrics” see my recent blog post for Maximpact.com.

Research investors

The range of impact investors is growing and so is their spectrum of approaches. Some impact investors simply provide capital, others mix catalytic capital with grants to promote growth. Still others work as venture philanthropists, bringing hands-on expertise and networks to help businesses grow. Getting familiar with the different types of investors will help you target the ones that can help you most.

Conferences like SOCAP are a good place to learn about and meet potential impact investors; and if you can’t be there in person, they make videos of many of their discussions and panels available on the web.

Industry blogs like OpenForests, media streams like FastCoexist or Huffpost feature stories about impact businesses and the investors that support them. Our impact deal portal, Maximpact.com, hosts all of these types of investors on it, all of them actively looking for deals. Do your groundwork and understand your options.

Types of impact investors

  • Accelerators, Hubs and Intermediaries
  • Angel Investors
  • Venture Philanthropists
  • Enterprise Capitalists
  • Large corporations with sustainability agendas
  • Foundations
  • Family offices
  • Governments
  • International development agencies

Cultivate relationships

Business, like life, is all about relationships. Cultivating good relationships with a number of potential investors will pay off now and in the future.

Make a short list of impact investors to approach with your business plan and research them carefully before you set up a meeting. Identify their impact mission- do they want to stop deforestation, protect indigenous communities, promote synergies between agriculture and forest habitats?

Find out what investments they’ve made in the past and learn the names and backgrounds of key personnel; impact investing remains a sector where personal values matter, even at the highest levels.

Once you understand your investor, you can speak to their interests and demonstrate how your project will help them meet both their financial and social or environmental impact goals.Be prepared for a two-way dialogue. Your investors may have strong views about your business model and impact goals. Keep an open mind and be prepared to negotiate.

For more insights into how impact investors think about business, see this post by Tilman Ehrbeck.

Find out more about Maximpact.com or list a deal on our global platform.

[Image credit: 123rf]