Priority Actions for Deforestation- and Conversion-Free Finance

The document outlines a strategic framework to transition the global financial system toward deforestation- and conversion-free (DCF) models. It details specific mandates for policymakers to reform fiscal policies and subsidies, for central banks to embed nature-related risks into prudential supervision, and for financial institutions to scale capital toward sustainable land use and regenerative agriculture. The report emphasizes that aligning financial flows is essential to meet climate and biodiversity targets, citing the loss of 6.7 million hectares of tropical primary forests in 2024 as a critical risk to economic stability.

• The global economy faces significant risks from nature loss, with 6.7 million hectares of tropical primary forests lost in 2024 alone. Agricultural land conversion is identified as the second-largest source of global emissions and the primary driver of deforestation over the last twenty years.
• Policymakers are urged to reform fiscal frameworks by repurposing harmful subsidies in agriculture, infrastructure, and extractives in accordance with Target 18 of the Kunming-Montreal Global Biodiversity Framework (GBF). Recommended actions include using differentiated tax rates for verified DCF supply chains and excluding deforestation-driving activities from sovereign loans or bonds.
• Central banks and financial supervisors should integrate deforestation and conversion risks into their oversight to prevent systemic instability. This includes mandating portfolio risk management, applying environmental stress testing, and aligning reserve asset portfolios by tilting them toward issuers with strong forest governance.
• Financial institutions must address commodity-driven deforestation in their portfolios by setting time-bound DCF targets and redefining fiduciary duty to include DCF objectives. The report notes that companies across 40 countries have already quantified USD 57.8 billion in anticipated financial effects resulting from deforestation.
• Public finance is identified as a necessary catalyst to de-risk early-stage sustainable agriculture investments. The report advocates for the use of concessional capital, support for the Tropical Forests Forever Facility (TFFF), and the scaling of results-based finance through REDD+ to attract private investment.
• The report highlights the 'debt–deforestation cycle,' where high debt burdens in forest-rich nations force resource exploitation for short-term revenue. It recommends that multilateral development banks (MDBs) restructure or cancel unsustainable debt to create fiscal space for nature-positive investments.
• The Innovative Finance for the Amazon, Cerrado and Chaco (IFACC) initiative has demonstrated tangible results, with 24 institutions disbursing USD 498.7 million to date. In 2024, USD 244.1 million was disbursed, supporting over 341,000 hectares of sustainable soy and cattle production intensification.

APA

Forest Declaration Assessment (2025). Priority Actions for Deforestation- and Conversion-Free Finance. https://forestdeclaration.org/wp-content/uploads/2025/09/2030Vision-DCFFinance.pdf

Chicago

Forest Declaration Assessment. Priority Actions for Deforestation- and Conversion-Free Finance. 2025. https://forestdeclaration.org/wp-content/uploads/2025/09/2030Vision-DCFFinance.pdf.

Wikipedia

{{cite report |author=Forest Declaration Assessment |title=Priority Actions for Deforestation- and Conversion-Free Finance |date=September 2025 |url=https://forestdeclaration.org/wp-content/uploads/2025/09/2030Vision-DCFFinance.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{forestdeclarationassessment2025priority, author = {{Forest Declaration Assessment}}, title = {{Priority Actions for Deforestation- and Conversion-Free Finance}}, institution = {Forest Declaration Assessment}, year = {2025}, month = sep, url = {https://forestdeclaration.org/wp-content/uploads/2025/09/2030Vision-DCFFinance.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }