PRIVATE SECTOR ROLE
- Ask investors to adopt forest positive investment policies and regulations, requiring transparency and disclosure.
- Advocate for national regulation discouraging lending for unsustainable practices and requiring disclosure of those practices.
- Work with donors and private lending institutions to de-risk incentives for farmers to shift practice.
- Include deforestation in strategic conversations about climate risk and disclosure internally and externally.
ROLE OF OTHER ACTORS
- Governments evaluate their financial systems to require disclosure and consideration of deforestation and land-use related activities in lending decisions.
- Governments work with international financial actors to consider beneficial financial regulation.
- NGOs better understand debt markets and other lesser-explored arenas harboring deforestation-linked finance; and quantify financial risk related to deforestation.
- Actors collectively push for divestments from finance related in any way to commodity-driven deforestation.
TFA ROLE
- Use convenings to increase communication and engagement between supply chain actors and the investment and banking community.
- Highlight the importance of understanding the risks of deforestation-linked finance to stimulate action.
RATIONALE
- Companies require credit and other financial services to operate and while there has been progress on increasing sustainable finance flows in commodity production, they only represent one-fifteenth of agriculture finance.
- Zero-deforestation criteria for finance should be implemented and become the new status quo.
CURRENT STATUS
- Supply chain actors recognize the key role the financial sector plays in perpetuating deforestation, but there is a lack of understanding and action to change the behavior of the financial sector in this regard.
- Without large financial actors and regulatory bodies with market-leading impacts shifting their practices and actions, isolated efforts related to tools, data, and disclosure will not be enough to create meaningful change.
- While climate risk platforms, such as the Task Force on Climate-related Financial Disclosures (TCFD), implicitly incorporate deforestation-related risks, progress remains to be made in implementation and translating risks across fragmented supply chains.
TFA Partners
We work with a considerable number of public, private and civil society actors, indigenous peoples, and international organizations to catalyse high-impact partnerships to reduce commodity driven deforestation and build a forest positive future.
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