Accelerating finance to reduce forest emissions

The document highlights a severe funding gap for forest protection, where annual needs range from USD 45 to 460 billion but current funding averages only USD 2.4 billion. While there has been growth in REDD+ commitments, private finance from voluntary carbon markets, and ESG funds since 2015, 'grey finance'—investments driving deforestation—continues to dominate. The brief identifies systemic barriers such as perverse economic incentives and weak governance, and calls for governments and the private sector to align budgets, reform subsidies, and increase investment transparency to meet global climate goals.

• There is a massive disparity between the financial requirements for global forest protection and actual funding; annual needs are estimated between USD 45 and 460 billion, while current international and domestic funding averages only USD 2.4 billion, representing 0.5-5% of the need.
• Since 2015, there has been a measurable increase in green finance and tools for the finance sector: REDD+ commitments rose from under USD 1 billion to over USD 6.7 billion, and private finance from voluntary carbon markets for forest protection and restoration grew from under USD 50 million to over USD 159 million.
• Assets under management in ESG funds increased from USD 655 billion in 2012 to USD 1,048 billion in 2018, with a specific surge in the US from USD 5.4 billion in 2018 to USD 51.1 billion in 2021.
• Despite some progress, systemic barriers persist: 62% of financial institutions lack deforestation policies, and of those that have such policies, only 40% report on their implementation.
• At COP26 in November 2021, 30 financial institutions managing over USD 8.7 trillion in assets pledged to stop investing in commodity-driven deforestation in the pulp and paper, palm oil, soy, and beef sectors by 2025, while 12 countries committed USD 12 billion in forest-related climate finance for 2021-2025.

APA

Forest Declaration Assessment (2022). Accelerating finance to reduce forest emissions. https://forestdeclaration.org/wp-content/uploads/2022/02/Finance-for-forest-action-Progress-since-2014.pdf

Chicago

Forest Declaration Assessment. Accelerating finance to reduce forest emissions. 2022. https://forestdeclaration.org/wp-content/uploads/2022/02/Finance-for-forest-action-Progress-since-2014.pdf.

Wikipedia

{{cite report |author=Forest Declaration Assessment |title=Accelerating finance to reduce forest emissions |date=February 2022 |url=https://forestdeclaration.org/wp-content/uploads/2022/02/Finance-for-forest-action-Progress-since-2014.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{forestdeclarationassessment2022accelerating, author = {{Forest Declaration Assessment}}, title = {{Accelerating finance to reduce forest emissions}}, institution = {Forest Declaration Assessment}, year = {2022}, month = feb, url = {https://forestdeclaration.org/wp-content/uploads/2022/02/Finance-for-forest-action-Progress-since-2014.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }