Tracking private finance in tropical forest countries – COP26 side event
On the second day of the UN Climate Change Conference (COP26) in Glasgow, world leaders announced a pledge to save and restore our planet’s forests. With that deal came a long list of commitments from public and private sector actors to combat deforestation.
These included ambitious financial commitments to support forest protection and zero-deforestation commodities – including $7.2bn from the private sector – as well as commitments to align investments to sustainable land-use objectives. For instance, CEOs from more than 30 financial institutions, with over $8.7 trillion of global assets, have committed to eliminate investments in activities linked to agricultural commodity-driven deforestation. These commitments add up to almost a decade of announcements aimed at mobilizing private finance to support forests.
Despite this global recognition of the importance of unlocking private finance at scale to address deforestation, there is still very limited information available on the volume of capital flows into land use. These financial flows are not tracked or reported consistently. Monitoring of private finance is challenging across any sector, yet tracking flows related to land-use change in tropical forest countries is particularly challenging for many reasons. These include the issue of defining what constitutes sustainable land-use; the difficulties in accessing disaggregated data on private flows due to confidentiality and market regulations; and the very nature of land-use activities which are embedded into often largely informal rural economies.
Building robust approaches to track private flows in land-use is essential to increase the transparency of investments impacting forests and ecosystems, hold actors accountable to their commitments, and measure progress.
On 8 November, the EU REDD Facility hosted a COP26 side event to explore tracking private finance in tropical forest countries. The virtual event provided a public platform for practitioners who are paving the way towards building approaches that shed light on the private sector’s role in financing nature-based solutions and sustainable land-use.
Three presenters spoke to this topic from different angles:
- The Forest Stewardship Council’s Chief Climate and Ecosystems Officer Asger Olesen discussed the diversity of angles through which private land-use investments can be approached, and made practical recommendations on how to implement tracking studies.
- Gabriela Coser from Climate Policy Initiative shared a country perspective, namely Brazil’s experience in identifying private investments into land-use, and lessons learnt from that comprehensive exercise. The study demonstrated that supporting tropical forest countries in understanding their financial landscapes and the leverage effect of their public policies is key to enhancing domestic resource mobilisation efforts.
- Ivo Mulder, head of UNEP’s climate finance unit, presented results of UNEP’s efforts in quantifying global investments into nature-based solutions, and described concrete steps for action to deliver on the ambitious pledges coming out of COP26.
Their remarks were followed by a question and answer session. We invite you to watch the event recording.