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  • Scaling up sustainable forestry projects key to attracting finance

Scaling up sustainable forestry projects key to attracting finance


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An aerial view of Burkina Faso, Africa. Photo by D. Tiveau/CIFOR
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Paul Hol assesses the age of a teak tree in a plantation in Ghana.
©Form International

Continuing this new interview series on inclusive landscape finance, we hear from the corporate sector.

Paul Hol, CEO of FORM International, shares his views with Tropenbos International’s Nick Pasiecznik on what is already being achieved and, more importantly, what still needs to be done to attract more investment for reforestation of degraded forest landscapes.

FORM International is a forest management and services company that manages forest assets in Africa and delivers a range of management and financial services. It is coinvestor in the investment company Sustainable Forestry Investments (SFI).

 “The main issues are the lack of projects and the problem of scale,” states Paul. “There is also a need for stakeholder involvement, but financial sustainability and a sound business case are paramount to success.”

How are you involved in sustainable forest landscapes?

FORM International has supported sustainable forest management for more than 25 years, assisting Sustainable Forestry Investment (SFI) to attract more than USD 60 million of investment, directly benefiting more than 2,400 employees. Founded in 1992, FORM International has provided innovative services to support the implementation of best practices. In 2007, we focused our operations through the establishment of FORM Ghana Ltd.

The transformation of a degraded forest area in the Tain II Forest Reserve, Ghana, between 2014 and 2018. ©FORM International

This FSC certified plantation company integrates large-scale reforestation of degraded forest land with the needs of local villagers and the environment, while not compromising economic viability. Today, FORM Ghana manages some 18,000 hectares in close collaboration with smallholders and communities. Following successes here, SFI Tanzania Ltd. was set up in 2013 and now sustainably manages timber and sisal production on 10,000 hectares of formerly degraded forest in the Tanga region.

The transformation of a degraded forest area in the Tain II Forest Reserve, Ghana, between 2014 and 2018. ©FORM International

 

In parallel, FORM International partnered with SFI in 2009. SFI is an investment company based in the Netherlands. While FORM International implements projects, SFI attracts institutional and impact investors who share FORM’s belief in sustainable reforestation and who want to make a real contribution on a large scale.

It is aiming to secure investments of about USD 150 million by 2022, and wants to increase the area of reforested land to 40,000 hectares. This commitment was made during COP 21 in Paris in 2015, in partnership with the African Forest Landscape Restoration Initiative (AFR100), which is an initiative of the World Resources Institute and the New Partnership for Africa’s Development, a program of the African Union.

Read also: Forest finance partnerships more productive than competition

You have invested in sustainable forestry, but why have so few other organizations followed suit?

There is plenty of money, but there are too few ‘good’ projects! And it not just the lack of project ideas, but also the problem of bringing good projects to scale. The Netherlands Platform for Microfinance (NPM), for example, has significant capital to invest, but they, and similar institutions, cannot finance just a handful of farmers. To ensure impact at a large scale, we need vehicles or mechanisms that are effective and adaptable.

A very simple way to develop project ideas would be to gather a group of experts together, and send them around the world to identify good land-use practices that can be translated into bankable projects and would benefit communities and the environment.

However, there are two prerequisites. First is the essential need to listen to people, lots of different people, to understand their land-use interests. Second is the need to develop a ‘technical concept’ that works for one hectare, but that can also be scaled up. Importantly, a structure is needed to handle the finance aspects in a uniform way – and this requires organizing farmers into formal groups or associations.

What must not be forgotten is the overriding element for success, which is financial sustainability. At the moment, we are making efforts towards environmental restoration in a rather chaotic and haphazard way. Some organizations focus on protecting a single species or ecosystem, for example, others focus on a single commodity, while what we obviously need is something much broader than that.

Specifically, how is your organization addressing inclusive finance, and what are your experiences and key lessons?

We have the knowledge – look how we made this work in Europe. We started with the ‘technical concept’, mapping soil and climate types, and linked this to inputs and financial returns. Governments were strongly involved. But we didn’t consider long-term impacts.

Teak afforestation in Akumadan, Ghana – putting forests back where they once were.
©FORM International

We do include sustainability in our technical concepts, though we are still only at the early stages of analyzing, testing and determining the best ways forward. Once we do find the right answer, doors will open to accessing more finance, and convincing other stakeholders to participate

As a plantation company, we and others like us are in a key position to offer ‘good’ projects to investors, and to scale them up, i.e. to overcome the main obstacles in offering finance for reforestation. But how do we define ‘good’?

By using transparent and globally agreed standards. FORM International’s plantations are certified according to the Forest Stewardship Council’s Ten Principles for Sustainable Forest Management, or to other certification standards with similar sustainability principles.

Read also: Strengthening producer organizations is key to making finance inclusive and effective

What examples do you have of successful or promising ‘model’ approaches or innovations?

We feel that the three specific pillars of our unique investment concept offer one possible model. First, establish a good relationship with traditional landowners, farmers and local communities to ensure that plantation development will be beneficial for all, leading to a stable and long-term situation. Second, respect strict ecological and environmental standards. And third, develop plantations in a way that will allow us to meet target returns on investment.

We also need to continue to set realistic goals – and to build momentum to ensure that we meet them. For example, I led the organization of ‘Forests for the Future: New Forests for Africa’ in Accra, Ghana, in March 2016, to discuss the implementation of reforestation goals in the AFR100.

What is your vision on how best to increase finance and investment in sustainable forestry?

We must understand local needs and concerns. If landscape restoration is to succeed, it needs stakeholder involvement in a way that is financially attractive and sustainable. This means ‘inclusive finance’. This is a term that is now being used to describe what we have been doing for some time regarding reforestation of degraded lands. What makes it different from other forms of finance is that it includes local people, right from the start.

I also believe in voluntary and spontaneous development. It cannot be forced – but it can be helped. Consultant advisors, for example, will fail if they try to implement a one-size-fits-all system to build bridges between smallholders and investors.

But they can support a better positioning of farmers, organizations and companies, and build the capacities of smallholders and their organizations as a basis for what might follow organically.

I strongly believe that people can help to build such important relationships, but only in the region they work in and know, culturally, socially and economically. They can then assist in formulating and putting into place adapted, tailor-made approaches, developed from hands-on experience. Importantly, this must involve the expansion of links with local governments.

Government support for, and cooperation in this kind of project is essential, but private sector involvement is crucial to drive success, attract much-needed investments and achieve the third component of sustainability, i.e. increase the financial independence and improve the financial position of all stakeholders involved.

Forest and landscape restoration is one of the answers to climate change, but in most cases it will not be the main motivation for participants, and is likely to be different for each land user. To make such projects successful, we need each other, and every single partner – company, authority or farmer – to see the added value of participation.

By Nick Pasiecznik, Tropenbos International.

This interview has also been published on the Tropenbos International website.

This article was produced by Tropenbos International and the Center for International Forestry Research (CIFOR) as part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA). FTA is the world’s largest research for development program to enhance the role of forests, trees and agroforestry in sustainable development and food security and to address climate change. CIFOR leads FTA in partnership with Bioversity International, CATIE, CIRAD, INBAR, ICRAF and TBI. FTA’s work is supported by the CGIAR Trust Fund. 

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  • FTA event coverage: Gaining traction on climate goals

FTA event coverage: Gaining traction on climate goals


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Deforestation in Jambi, Sumatra, Indonesia. Photo: Asep Ayat for 2014 Global Landscapes Forum Photo Competition
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Deforestation in Jambi, Sumatra, Indonesia. Photo: Asep Ayat for 2014 Global Landscapes Forum Photo Competition
Deforestation in Jambi, Sumatra, Indonesia. Photo: Asep Ayat for 2014 Global Landscapes Forum Photo Competition

By Catriona Croft-Cusworth, originally posted at CIFOR’s Forests News

An increasing number of states are embracing commitments made under the Paris Agreement to reduce greenhouse gas emissions and limit global temperature rise. But how do these grand ambitions play out in reality?

In practice, climate action gains traction at the ground level — ‘where the rubber hits the road’, so to speak — and that requires collaboration among a whole range of different stakeholders.

Besides national governments, subnational governments are increasingly involved in action on climate change in the land use and forestry sectors. Non-state actors, including indigenous groups (which sometimes own and manage important territories), non-governmental organizations and the private sector, are also playing a growing role.

So how can the efforts of these various groups be best coordinated to meet national and international pledges, bringing real action on climate change?

A political world

Anne Larson, a Principal Scientist with the Center for International Forestry Research (CIFOR), has led research on this issue in five countries as part of the Global Comparative Study on REDD+ under the CGIAR Research Program on Forests, Trees and Agroforestry, including two national studies on systems of monitoring, reporting and verification (MRV).

Planting Mangroves. Photo: Putu Budhiadnya for 2016 Global Landscapes Forum Photo Competition
Planting Mangroves. Photo: Putu Budhiadnya for 2016 Global Landscapes Forum Photo Competition

She says that even with apparently technical issues like MRV, political tensions tend to emerge both horizontally and vertically among stakeholder groups when trying to turn ideas into reality. This shouldn’t discourage efforts to take action but suggests that we need to take a different approach.

“We can’t ignore political realities,” she says. “We have many great ideas, but no matter how great they might sound technically, we always bump into reality when we hit the ground and try to start implementing.”

Also read: FTA project update: Understanding REDD+ across the globe

“Politics is not necessarily good or bad, it just is. We need to embrace this and learn to work in this reality.”

Pham Thu Thuy, another CIFOR scientist involved in the study, says her research in Vietnam found that politics not only influenced coordination, but also shaped perceptions of goals and challenges among different levels of governance.

“Different levels perceive different problems. But also how they actually define the problem is based on their own perception and their political interest,” Thuy says.

The answer to coordinating those differences, she says, is to take a landscape approach.

Click to read: Exploring the agency of Africa in climate change negotiations: the case of REDD+
Click to read: Exploring the agency of Africa in climate change negotiations: the case of REDD+

You have to be aware of these politics and think about how you can bring together every piece of information and every active group to make a policy work,” she says.

“And I think that for the land-use system, if you want something to work, basically it has to be at the landscape level.”

A landscape view

At the Global Landscapes Forum in Marrakesh, subnational and non-state actors were invited to share their perspectives on the matter of catalyzing action on the ground.

The term ‘non-state actors’ includes researchers, civil society and other community-level groups, but via global climate negotiations in recent years has become shorthand for the private sector.

Also read: COP22 Special: REDD+ monitoring is a technical and political balancing act

Bruce Cabarle, Team Leader of Partnerships for Forests, an initiative for investment in sustainable use of land and forests, said in discussion at GLF that public-private-people partnerships were key to applying lessons learned into the future.

“The more interesting question is: How do we get synergies and complementarity between voluntary certification schemes and government regulations so that they are mutually reinforcing?” he asked.

Christoph Thies, a forest campaigner for Greenpeace, welcomed cooperative efforts among sectors, but maintained that states should take the lead.

“The private sector should never replace the roles and responsibilities of governments,” he said.

For Thies, the answer lies in understanding political factors as both challenges and opportunities for change.

“Technical barriers can be overcome,” he said. “To really address the landscape requires political will.”

On the ground

Fernando Sampaio, Executive Director of the PCI (Produce, Conserve and Include) Strategy State Committee in Mato Grosso, Brazil, acknowledged the importance of both private-sector and civil society involvement in ground-level efforts, from a subnational government perspective.

“The private sector is an important part of the process, but we also need to include other stakeholders who are excluded from the process,” he said.

Excluded groups often include indigenous peoples, whose land rights are not always recognized. Norvin Goff, President of MASTA, an indigenous federation that represents the Miskitus of the Honduran Mosquitia, said that blueprint approaches to land and forest use rarely work at the ground level for indigenous communities.

“We don’t need a set formula that has been used in the past, we need to create an approach together,” Goff said.

He urged closer partnerships between government and indigenous groups.

“Instead of an enemy, they should consider us as part of the solution,” he said.

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  • The best science is nothing without local voices: Partnerships and landscapes

The best science is nothing without local voices: Partnerships and landscapes


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Photo: Aulia Erlangga/CIFOR
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Photo: Aulia Erlangga/CIFOR
Photo: Aulia Erlangga/CIFOR

By Meine van Noordwijk, Coordinator of the FTA Flagship on Landscape management for environmental services, biodiversity conversation and livelihoods

Per definition, we have three types of partnerships within FTA: The partnerships for research, the partnerships for impact, and the partnerships for capacity development. The three guiding values are legitimacy, salience, and credibility.

In partnerships that are primarily for research we work to get more credible and higher quality science outputs.

We have partnerships that are primarily aimed at the salience aspect which means that whatever is done has the chance to modify policies, to be picked up at practical decision levels. We do the research and somebody else implements it. We need to be upfront in dialogue with whoever might possibly implement it to make sure that what we do is actually relevant for them.

Also read Influence flows both ways, by Fergus Sinclair, Coordinator of FTA Livelihood systems research

Under the premise of legitimacy we specifically find local partners and make sure that whatever knowledge we produce is in tune with local issues, is understood at local level, has local voices that can represent that story.

These three types of partnerships were traditionally seen as following one another, so science came first and the others followed.

But now we see them as being of equal importance. If we want our science to be relevant and to be used, we have to be fully tuned in with whoever could use it. Otherwise there’s an awful lot of good science that stays on the shelves because it doesn’t have the people who can represent it.

Also, in many cases, the partnerships within FTA don’t follow the lines of our Flagships but go across our themes.

Photo: Ollivier Girard/CIFOR
Photo: Ollivier Girard/CIFOR

Academic partnerships

In terms of partnerships that relate to academic credibility we have just as many and divers ones as the other flagships so I only want to highlight a few.

One thing that is specific for our Landscapes Flagship is that we are part of something fairly big called the Ecosystem Services Partnership (ESP) which started off as a network between European an North American universities, working on valuation of ecosystem services. We connected with them to have a more explicit tropical developing country focus.

One of our staff is organizing the Asian ESP network, and we are involved in the African ESP network which will have its first meeting in Nairobi on 21 November.

An interesting one is an informal group of scientists from the Center for International Forestry Research (CIFOR), the World Agroforestry Centre (ICRAF) and other institutions who believe that forests and climate change are not just about carbon.

The aspect of rainfall is maybe even more important. And we want to get that on the table. Our upcoming paper “Cool insights for a hot world” is about to come through. It’s a group work that covers trees, forests and water, the hydroclimate.

At the Global Landscapes Forum 2015, Danone co-hosted a discussion on smallholders and supply chains. Click to watch.
At the Global Landscapes Forum 2015, Danone co-hosted a discussion on smallholders and supply chains. Danone is a key private sector partner in FTA research. Click to watch.

Partnerships for impact

Under the category uptake or use of knowledge in policy arenas we have a number of people involved in the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) that is in the middle of its first major assessment now. Some scientists that are also funded by FTA are involved in that network. We want to make sure that our research gets connected with other policy-relevant work and keep track of emerging questions that we should take onto our agenda.

We also work with IDH The sustainable trade initiative, a grouping of public-private partnerships that support sustainable trade, sustainable landscape interfaces. They are also connected to the trade and investments Flagship 5.

We sometimes work with them as contractors, sometimes in partnership, trying to influence their agenda. This is only one of many partnerships with organizations that are at the interface of private sector and public interest in sustainability.

Another partnership that works well is the collaboration with Danone on some diagnostics of landscapes, asking questions like: Where do they get their water from? and Where are they trying to improve their relationship with the people in that landscape?

We learn from them what really are the issues of a drinking water company that interacts with the landscape and wants to help improve the overall functioning of that landscape.

Partnerships for capacity development

Where the main motivation of a partnership is legitimacy we often deal with capacity development, working under the assumption that even the best knowledge and science, even if it is policy-relevant, will be ignored if it doesn’t have local voices.

In this category we often collaborate with national partners, national research institution such as the Research, Development and Innovation Agency FORDA in Indonesia, or the network of South East Asian universities SEANAFE that want to bring agroforestry into their curricula.

It’s good for us to connect with them on the ground and it is important that whatever science emerges from FTA research is also communicated by local voices. We need the scientists in partner countries to develop their own line of research within a certain topic and get it connected with others globally.

A good example is the recent open letter by 139 scientists contesting the Malaysian governments position on peatlands, in which Malaysian scientists were very vocal.

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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

29 March, 2016

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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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