Testing our Assumptions: Early Learning on the Market for Sustainable Forest Investments

Blog: Bruce Cabarle – Team Leader

The launch of our first call for concepts was a big moment for Partnerships for Forests. It’s our first large-scale opportunity to assess the appetite among private sector companies and their partners in West and Central Africa for sustainable investments in forests and land use.

But we’ve already learnt a lot in the months leading up to the call. Over our inception phase we spoke to a wide range people, from private, public and community sectors, to test our ideas and get insights into how we can help create shared value across all the projects we support in our Forest Partnerships.

Those meetings confirmed some of our key assumptions.

Firstly, a significant number of companies recognise the importance of reducing deforestation in their supply chains of agricultural and wood fibre commodities. As reported by www.supply-chain.org, private voluntary commitments to address the risk of deforestation now span over 400 companies from across the palm oil, timber, soy and beef (among other) supply chains, representing over USD $96 billion in trade.

Most encouraging from our conversations was that companies stated they were actively seeking strategic partnerships with like-minded governments and civil society actors—recognising the limits to acting alone across complex and fragmented markets, dispersed supply chains, contradictory regulatory frameworks and countless stakeholders necessary to implement sustainable practices in the long-term.

These companies understand that public funds can play a strategic role in accelerating private-sector initiatives to address deforestation, if used in flexible and adaptive ways to unite these public and private agendas to nurture and support transformative new partnerships. The discussions also supported our decision not to focus on generating new and additional demand-side commitments (other stakeholders are already working on this) but to support or accelerate the implementation of these commitments.

Secondly, our meetings demonstrated investment capital per se is no longer the critical constraint, but rather the lack of investment-ready projects. Viable projects must meet the risk-adjusted expectations of investors faced with limited understanding of due-diligence, dynamic governance environments and emerging best practices from certification schemes.

Thirdly, our initial consultations identified a number of promising concepts—including some that focus on reforesting degraded land to mixed forest, and some that establishing new value chains based on forest-grown commodities. But many of these concepts are not yet ready to attract the investment usually required to reach commercial maturity or scale. Partnerships for Forests can therefore play an important role in narrowing that gap. See our ‘how we work’ pages for more information on that.

This brings me back to the call for concepts. We’ve already identified some good ideas, but we want to hear from as many organisations as possible about potential partnerships to help catalyse investments. These don’t have to be fully developed projects. We will incubate partnerships at different levels of maturity, from those that are only ideas through to projects that have already been piloted and are looking to scale up. However all partnerships should have the potential to deliver impact at scale, either through their own operations or replication elsewhere.

The deadline is this Friday October 14th at 11:59 (BST), so if you’re working in West and Central Africa and want to contribute to sustainable supply chains for cocoa, rubber, palm oil or timber/fuelwood, now is your chance. Apply now!