FORESTS & FINANCE

The document details a high-level dialogue on the disparity between 'gray' finance (subsidies and investments driving deforestation) and 'green' finance for forest restoration. It highlights the systemic barriers facing small-scale forest enterprises, the need for better supply chain transparency to avoid stranded assets, and the potential for innovative financial models—such as blended finance and carbon monetization—to accelerate the goals of the New York Declaration on Forests.

• There is a massive imbalance between finance that harms forests and finance that protects them; annual public 'gray' finance for land use sectors with negative forest impacts totals USD 777 billion, while 'green' finance for protection and restoration is only USD 16 billion.
• Private sector 'gray' finance exceeds sustainable forest action by a ratio of more than 150:1, with a significant portion of this capital flowing through tax havens; specifically, 70% of Amazon deforestation in 2017 was linked to private finance moving through nine tax havens.
• Despite the potential for forests to provide one-third of climate mitigation solutions, they receive only 2% of climate-related mitigation finance.
• Financial institutions are slow to operationalize sustainability commitments; a study of 150 institutions representing over 2.8 trillion in loans and holdings found that less than one-third had commodity-specific policies for palm, soy, and cattle.
• Small-scale agricultural ventures are primary drivers of deforestation in certain regions; in Peru, 90% of deforestation is attributed to ventures smaller than five hectares, primarily producing cacao and coffee.
• Smallholders face significant barriers to accessing capital because investors often lack an understanding of their business models, while smallholders lack the capacity to create 'investible packages' or business plans.
• Innovative financial mechanisms are being proposed to bridge the funding gap, including blended finance models for regenerative investing, the use of blockchain and cryptocurrency for crowd investing, and the monetization of carbon.

APA

Forest Declaration Assessment (2018). FORESTS & FINANCE. https://forestdeclaration.org/wp-content/uploads/2018/10/Shifting-Private-Sector-Finance-to-Accelerate-Forest-Action-Goals-8-9-low-res.pdf

Chicago

Forest Declaration Assessment. FORESTS & FINANCE. 2018. https://forestdeclaration.org/wp-content/uploads/2018/10/Shifting-Private-Sector-Finance-to-Accelerate-Forest-Action-Goals-8-9-low-res.pdf.

Wikipedia

{{cite report |author=Forest Declaration Assessment |title=FORESTS & FINANCE |date=27 September 2018 |url=https://forestdeclaration.org/wp-content/uploads/2018/10/Shifting-Private-Sector-Finance-to-Accelerate-Forest-Action-Goals-8-9-low-res.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{forestdeclarationassessment2018forests, author = {{Forest Declaration Assessment}}, title = {{FORESTS \& FINANCE}}, institution = {Forest Declaration Assessment}, year = {2018}, month = sep, url = {https://forestdeclaration.org/wp-content/uploads/2018/10/Shifting-Private-Sector-Finance-to-Accelerate-Forest-Action-Goals-8-9-low-res.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }