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  • Getting down to business: Seminar promotes shift toward inclusive investment

Getting down to business: Seminar promotes shift toward inclusive investment

Carpenter Hervé Bougar makes a living from doors and furniture in Yaoundé, Cameroon. Photo by O. Girard/CIFOR
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Tropenbos International Director Rene Boot speaks during the seminar on inclusive investments and business models. Photo by Nguyen Phuong Ha/Tropenbos International

A growing number of investors want to have a greater positive impact on people’s rights and livelihoods in areas where they do business. 

Tropenbos International (TBI), one of the CGIAR Research Program on Forests, Trees and Agroforestry’s (FTA) partner institutions, held on Sept. 14 a workshop titled Towards inclusive investment and business models for improved land governance and livelihoods: Are we on the right track? in Ede, the Netherlands.

Part of a broader series of annual seminars on sustainable forest management in the tropics, the event brought together finance, business, land use and development experts to address how to work with smallholders and learn from existing business cases.

Amid cases in which large-scale agricultural investments have damaged local livelihoods and ignored biodiversity and traditions, international organizations have established guidelines to help mitigate the adverse effects of investments. However, a growing number of businesses and investors want to exceed such guidelines, aiming for a positive impact on local communities’ livelihoods and tenure rights through their investments.

Carpenter Hervé Bougar earns a living from making doors and furniture in Yaoundé, Cameroon. Photo by O. Girard/CIFOR

“A growing number of investors aspire to make the transition from ‘doing no harm’ toward ‘doing good’,” TBI director René Boot said in opening the seminar. “The positive news is that this can be done.”

The discussions not only raised awareness on the importance of moving from the do-no-harm to the do-good approach in investing in smallholder land management, but also provided evidence of the feasibility and scaling-up opportunities from such an approach.

Participants shared experiences on best practices and made recommendations on strategies, mechanisms and follow-up actions to enhance investment in inclusive business models that improve the livelihoods, land security and entrepreneurial potential of smallholders.

Read more: Attention to detail is necessary for zero deforestation intentions to succeed, say scientists

Furthermore, the seminar contributed to the improvement of a working paper titled “Improving the positive impacts of investments on smallholder livelihoods and the landscapes they live in.”

Discussions on the paper covered ways for investors to improve the positive benefits of their investments, namely recognizing rights, effectively engaging, and the need to “think landscape.”

The findings of the seminar indicated that by recognizing local practices, as well as working with local communities, investors can benefit from greater local support. The findings also stated that understanding on a landscape scale could lead to production diversification and improved local food security.

The seminar, which was organized by TBI and other organizations working in the Netherlands, can be seen as a precursor to future work that TBI will carry out as part of FTA’s research theme on sustainable value chains and investments to support forest conservation and equitable development.

Timber is piled outside a building as part of the Kanoppi Project in Yogyakarta, Indonesia. Photo by A. Erlangga/CIFOR

Key scientists intend to build upon the body of work under FTA in order to make explicit the connections between responsible financing schemes and the development of inclusive business models, as part of the conditions needed to support more sustainable landscapes.

“The approach undertaken by TBI constitutes a key piece in building financing schemes that can contribute more positively to business models that work for the environment and smallholders, supporting broader agendas on sustainability and inclusivity,” said FTA Flagship 3 leader Pablo Pacheco.

“The research on value chains and finance in FTA will continue building in these innovative approaches,” he added.

Read more: Sustainable value chains and investments

“At TBI, we see the report and the seminar – and all the preliminary work – as an important contribution to FTA research and engagement work, in advancing the agenda for it, and on which to base further collaborative activities, particularly in the field of inclusive business and finance,” said TBI program coordinator Herman Savenije.

“We see this topic of inclusive finance and business as an important one in which we can learn a lot by actively engaging with those worlds. In the Netherlands I feel the thinking in the finance and business worlds on inclusiveness has advanced somewhat, though still with some frontrunners, and we have started building networks with them,” he added.

The day of presentations from nine speakers yielded numerous insights and ideas – including that scaling up is easier if one can show clear profits; that there is a clear ‘missing middle’ between small and large investments; and that transparency is vital – many of which are contained in the summary report.

Evidently, research on investments for improved land governance and livelihoods, which will be built upon by TBI and other institutions as part of FTA, is indeed on the right track.

By Hannah Maddison-Harris, FTA Editorial and Communication Coordinator

This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.

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  • Sustainable value chains and investments

Sustainable value chains and investments

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The CGIAR Research Program on Forests, Trees and Agroforestry’s (FTA) work on sustainable value chains and investments to support forest conservation and equitable development is one of its five research themes. This work facilitates innovations in public policy, business models, private investments and finance to stimulate the sustainable supply of timber from natural and planted forests, enhance the sustainable production of high-value tree crops and reduce the impacts of agricultural expansion in forests.

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  • FTA event coverage: Connecting funds to farms and forests

FTA event coverage: Connecting funds to farms and forests

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By Leona Liu, originally published at Forests News

OO0A5669-2Private sector investment in landscapes is no passing fad. It’s here to stay. That was the driving consensus among the 300+ participants of the Global Landscapes Forum: The Investment Case, which took place at the Royal Society of London on June 6. The Global Landscapes Forum is a key event under the CGIAR Research Program on Forests, Trees and Agroforestry (FTA).

“We’ve all noticed a very important paradigm shift in how the private sector has been contributing to concrete tangible solutions for climate change challenges all over the world,” said Forum attendee Ayman Cherkaoui, the UNFCCC COP 22 Adviser to the Environment Minister of Morocco.

“The future is synonymous with landscapes,” said Mark Burrows, Managing Director and Vice Chairman of Global Investment Banking at Credit Suisse. “This is going to be a five to seven-trillion dollar investment space within the next 10-15 years. Every bank and every institutional investor is now turning their attention to this space. The biggest problem today is not the weight of money. The capital is there. The main problem we’re dealing with now is: ‘How do we get this large bulk of money to trickle down to those who need it the most- the smallholders?’”

During the one-day, invite-only experts symposium, bankers and fund managers rubbed shoulders with government agencies and NGOs, and agriculture and forestry researchers in an attempt to provide solutions to this challenge. While at first glance they appear to be strange bedfellows, each of them holds a critical part of the green investment puzzle.
Participants favored a landscape approach. Photo: Tim Cronin/CIFOR
Participants favored a landscape approach. Photo: Tim Cronin/CIFOR

Indeed, a ‘landscape approach’ is largely about working across traditional institutional boundaries, which can hinder the integration needed to achieve progress. Among the biggest boundaries that exist today in relation to landscape approaches is the one between the private finance sector and the land-based sectors- hence the need for such an event.

“We need to move out of our comfort zones. That’s the philosophy of the Global Landscapes Forum– to bridge academic disciplines, expert communities and economic sectors to create a forum where everybody talks to everybody and crosses the traditional boundaries and innovates,” said Holmgren in his keynote speech at the Opening Plenary.

Given their diverse institutions, expertise and terminologies, the public and private sectors need to come together to find a common language in order to develop innovative solutions. The current climate and development frameworks provide a strong rationale and momentum for this to happen.

Post-Paris, private sector engagement is needed more than ever

In 2015, three major policy outcomes reinforced the need for the private sector to step up to the plate: the UN’s Third International Conference on Financing for Development in Addis Ababa, Ethiopia, the signing of the Sustainable Development Goals (SDGs), and the adoption of the Paris Agreement.

Also watch the video on the event. Click to play.
Also watch the video on the event. Click to play.

Delivering on the promise of the Paris Agreement and the SDGs will not only require strong political commitment, but substantive capital. At the COP 21, more than 180 countries submitted their Nationally Determined Contributions (NDCs) pledges to the UNFCCC. According to these plans, $16.5 trillion is needed over the next 15 years to finance climate action. The public sector alone cannot meet this need.

“The Paris Agreement set a new playing field for us all. It set out the level of ambition to mobilize $100 billion by 2020,” said Andrea Ledward, Head of Climate and Environment Department at DFID and UK Board Member of the Green Climate Fund (GCF).

“It set out a particularly important role for the private sector and multilateral development banks (MDBs) to play. MDBs – being the largest financiers- are essential to catalyze the large sums of money needed to get us to the $100 billion. As a donor government, it’s important that we start thinking about how we use our public financing to mobilize these much larger flows that are coming through the private sector and MDBs.”

The Green Climate Fund (GCS)– established in 2010- is gearing up as the main vehicle for achieving the climate change objectives as defined at the COP 21. The Fund invests in low-emission and climate-resilient development. It is the only stand-alone multilateral financing entity that aims to deliver equal amounts of funding to mitigation and adaptation. This is extremely significant given the present parity between the two.

In the lead up to the COP 21, the think-tank Climate Policy Initiative (CPI) analyzed figures and found that climate finance flows in 2014 were $64 billion. Within that, only 16 percent of funding was used towards climate adaptation. This shows that mitigation projects are essentially larger and easier to finance. They also tend to occur in middle-income countries. Adaptation projects, on the other hand, are seen as more complicated and tend to occur within the poorest and most vulnerable countries.

The attention to equalizing private sector investment in mitigation and adaption is also a key priority for the COP 22 that will take place in Marrakech, Morocco this November.

“When it comes to private investment on the mitigation side, it’s becoming stronger and stronger with each passing day. We are seeing record levels of investment all over the world,” said Cherkaoui. “But at the same time, the investment case for the adaptation side needs to be strengthened. We are now seeking all types of inputs on how to do that.”

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  • Combining public goods and private interests--heads of CIFOR and ICRAF discuss forest finance

Combining public goods and private interests–heads of CIFOR and ICRAF discuss forest finance

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The Center for International Forestry Research (CIFOR) and the World Agroforestry Centre (ICRAF) are engaging with the private sector to promote sustainable land use, sustainable supply chains and responsible investments. A big part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) is focused on smallholder farmers and the impacts of trade and investment. Peter Holmgren, Director General of CIFOR, and Tony Simons, Director General of ICRAF, looked at the challenges in their research.

Holmgren stressed that private sector firms were increasingly working toward more sustainability in their dealings, partly due to consumer pressure. He mentioned commitments to reduce deforestation such as the New York Declaration on Forests from 2014 that now needed to be implemented.

Simons spoke of the challenge to overcome misconceptions that public goods were private bads and vice versa. Only then would it be possible to better combine public goods with private interests.

Watch the second part of their talk on the occasion of International Day of Forests.

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