SCALE INNOVATIVE FINANCE FOR SUSTAINABLE PRACTICES
INTENDED OUTCOMES
- Mainstream deforestation-free commodity finance
- Existing sources for sustainable finance linked with innovative approaches involving the private sector in key forest landscapes to support a shift to sustainable commodity production and other alternative livelihoods
- Carbon finance and other mechanisms alongside private sector finance implemented at scale
- Finance for sustainable alternatives provided in just and equitable ways that furthers the livelihoods of Indigenous Peoples and local communities.
PRIVATE SECTOR ROLE
- Gain a better understanding of the potential tools, including blended and/or layered finance, results-based or milestone-based payments, concessional and bilateral finance that enable investments in commodity-rich jurisdictions and support increased sustainable commodity production.
- Support the development of the infrastructure and capacity needed to spur sustainable commodity production.
ROLE OF OTHER ACTORS
- Civil Society promotes good investment practices and exposes harmful investments and green washing.
- Stakeholders working in specific landscapes align their approaches to facilitate streamlined investment at scale.
- Forest countries help build enabling conditions for investment, which requires technical and financial support from civil society and donors respectively.
TFA ROLE
- Support the engagement of supply chain actors with interested parties from civil society and the public and private sector to better understand and implement collaborative approaches to sustainable finance.
RATIONALE
- To scale forest friendly finance, sustainable funding mechanisms must leverage other efforts and actors by linking to private sector investment and integrating with jurisdictional approaches.
- This requires pioneering replicable, scalable models that can be adopted in the financial mainstream.
- Results-based payment approaches could be amplified if they occur in parallel to robust sustainable financing from major financial institutions.
CURRENT STATUS
- Several actors have pioneered results-based payments approaches, but these efforts have not reached the critical scale to present a compelling business case to prevent deforestation.
- Innovative approaches, such as the &Green Fund, Agri3 Fund and the Tropical Landscape Finance Facility (TLFF) are beginning to show promise by unlocking significant private sector investment but require additional support and replication.
- Binding financial approaches in the EU such as the taxonomy are underway.