Terry Slavin asks whether the Leaf Coalition, a private-sector driven partnership that has raised $1bn for tropical forest countries, can unlock the flood of funding needed, when Brazil and Indonesia are refusing to take part

The precipitous decline in the world’s rainforests, particularly in the Amazon, Congo Basin and Indonesia, is responsible for an estimated third of global CO2 emissions, so the agreement by 134 leaders to halt and reverse forest loss by 2030, backed by $19.2bn funding, was seen as one of the most important results at COP26.

The pledge by the Glasgow Leaders’ Declaration on Forests and Land Use was accompanied by a blizzard of nature-based commitments by both the public and private sector. Among the most significant was news that the Leaf Coalition, a partnership launched in April between the UK, U.S. and Norway and a handful of companies, has managed to raise $1bn a year in finance for forests. 

Eron Bloomgarden, executive director of Emergent, the U.S. non-profit that is acting as the transaction intermediary for the coalition, announced that the number of participating companies had more than doubled to 19 in seven months, with BlackRock, Burberry, EY, Inditex, Intertek, SAP and Walmart.org the latest to join. (See below for full list)

Meanwhile, 30 jurisdictions, which together encompass over half a billion hectares of forest, have submitted proposals for funding, and five of them, Costa Rica, Ecuador, Ghana, Nepal and Vietnam, signed the first letters of intent.

This interest from the corporate sector to use nature-based solutions as part of their climate goals is significant

It is dizzying progress compared with REDD+, the moribund UN system for helping tropical countries reduce deforestation - raising more finance in seven months than REDD+ had disbursed in the past 14 years.  

But some critically important forest countries, as well as active REDD+ funder Germany, have declined to participate in the new funding mechanism, while activists fear it could set off a new global “carbon land grab” that excludes indigenous groups.

Leaf, which stands for Lowering Emissions by Accelerating Forest finance, was designed as a high-integrity platform for companies to buy emissions reductions credits to meet their net-zero commitments, while at the same time channelling billions of dollars into tropical countries to help them fight against deforestation. (See Can corporates’ net-zero drive put tropical countries on a rapid road to ending deforestation?)

Corporate carbon offset schemes have had a chequered history, but the difference with Leaf on the buyers’ side is that companies can only participate if they have a 1.5C aligned science-based target, and are signed up to the UN Race to Zero campaign, which sets strict rules on offsets only being used when companies have done the utmost to cut their own emissions.

An indigenous woman taking part in a protest at COP26. (Credit: Dylan Martinez/Reuters)

On the sellers’ side, projects are chosen by the countries themselves, and must contribute to meeting their commitments to cut emissions under the Paris Agreement. To be accepted, the countries’ plans should also demonstrate equity, inclusivity and transparency, reach local communities, particularly indigenous people, and “support wider climate goals”.

“This interest from the corporate sector to use nature-based solutions as part of their climate goals to address supplemental emissions is significant,” Bloomgarden said in an interview.

“The leading multinational companies, most of them, want to do it the right way, and I think having appropriate guidance that provides a pathway for them to do this will unlock significantly more finance private finance [for forests] then we've been able to so far.”

Over time, the expectations of communities wane because they have to wait 10 or 20 years to deliver on some minimal credits

At a panel discussion at COP26, Nathaniel Keohane, president of the Center for Climate and Energy Solutions, said Leaf is distinctive both in collaboration between the private and public sectors, and in the amount of finance being raised. “It’s not about walling off forests and reducing economic output, it’s about funding a new model that can allow tropical countries to become ‘green’ superpowers.”

Roselyn Fosuah Adjei, director of climate change at the Forestry Commission of Ghana, said Leaf’s ability to raise funding in such short order gave her hope that Ghana could get early finance for its plan to protect existing forests from further encroachment by helping impoverished cocoa and shea farmers become more productive.

“Many reforestation projects [in cocoa] take too much time to generate the emissions reductions and [CO2] removals that we need. Over time, the expectations of communities wane because they have to wait 10 or 20 years to deliver on some minimal credits. It’s not paying off. …. We need commensurate alternatives to deforestation and we need sustainable finance, at speed,” Adjei said.

Indonesia's President Joko Widodo speaking at COP26. (Credit: Yves Herman/Reuters)

Bloomgarden said the companies have all promised to pay a minimum of $10m over the next five years, with some paying significantly more, while about half of the $1bn committed thus far will come from the three donor governments, which have been leading supporters of REDD+, though another significant REDD+ funder, Germany, has not joined the partnership.

He said the difference between Leaf’s model and REDD+ is that recipient countries will get twice as much per tonne of avoided CO2: $10 vs $5. Forest countries also stand to gain if companies who buy the credits sell them later for more than $10, as any profits will go to the jurisdictions.

The fact that Leaf is backed by private sector buyers is key, he said. “Our aim is to build a market that provides ongoing and long-term financing, as opposed to relying on donor aid.”

He added that because there will be third-party verifications of emissions reductions according to a single standard used globally, he expects payments could begin to flow within 18 to 24 months – far faster than existing REDD+ agreements, which have been subject to protracted bilateral negotiations over frameworks, monitoring and verification procedures.

I’m sanguine that we will find a path forward with Indonesia, but it has to be on their terms

“With Leaf, it’s a very clear proposition for emissions reductions that are certified to our TREES standard. There’s no other political discussion happening,” Bloomgarden said.

In September, Indonesia pulled out of an 11-year-old agreement with Norway, which had agreed to pay $1bn to combat deforestation. Indonesia cited lack of progress during two years of negotiations on transferring the first payment of 530m krone ($59m).

But the critically important forest nation is no better disposed to LEAF, and has refused to participate in the new funding mechanism, complaining that it had not been consulted.

Another significant Leaf refusenik is the Bolsonaro government in Brazil, where deforestation rates in October hit their highest levels since monitoring began in 2015. Although Emergent has signed memorandums of agreements with six Brazilian Amazonian states, which had been the most active participants in REDD+ before Bolsonaro came to power two years ago, their applications can’t progress further unless they can get authorisation from the federal government.

Ecuador is exceptional in its inclusive approach with indigenous groups. (Credit: Fotos593/Shutterstock)

Bloomgarden acknowledged that participation by Brazil, Indonesia and sub-Saharan Africa in Leaf will be needed to win the war on deforestation. “I’m sanguine that we will find a path forward with Indonesia, but it has to be on their terms and to their benefit.”

As for Brazil, he said the country’s willingness to compromise over Article 6 of the Paris Agreement, establishing rules for carbon markets, was key to finally reaching agreement at Glasgow. “Our hope is that there’s a pathway forward with the national government in Brazil.”  

The other question mark is whether Leaf will be able to succeed in its stated objective to direct climate finance to indigenous people and local communities, who hold some 80% of the planet’s remaining biodiversity and at least 24% of the world´s tropical forest carbon, but have received less than 1% of climate finance. (See also Can focus on nature in Glasgow’s COP finally turn the tide on deforestation?)

It pains me how difficult it has been for countries to access REDD+

Indigenous groups have received REDD+ funding in the past to implement projects in Ecuador, and will be involved in the programme that will receive funding through Leaf, said Karina Barrera, Ecuador's undersecretary of climate change.

But the country is exceptional in its inclusive approach. Some land rights activists fear that Leaf will set off a global “carbon grab”, further marginalising indigenous people, who have legal title to only 10% of their forests.

Nonette Royo, executive director of the Tenure Facility, an NGO working to secure land and forest rights for indigenous people, said the TREES standard requires indigenous people to work in partnership with governments, but there are many unanswered questions, particularly how land rights will be secured from governments that have not been prepared to give them in the past.

There are also concerns that Leaf is too market-driven, with indigenous communities distrustful of a price being put on ecosystem services that they have provided for free for thousands of years.

A squirrel monkey in the Ecuadorian jungle. (Credit: Ludmila Ruzickova/Shutterstock)

Charlotte Streck, founder of Climate Focus and a former senior counsel with the World Bank, said she welcomes Leaf, but sees challenges, including how a privately run fund with its own standard will align with international bodies like the World Bank, which has spent $900m since 2008 in its Forest Carbon Partnership Facility, helping 47 countries build their capacity to participate in REDD.

“It pains me how difficult it has been for countries to access REDD+,” she said. “I hope this money will flow, and it will flow quickly, but there are hurdles… such as the question of [how countries will access] input-based finance and soft loans and risk capital.”   

Ecuador's Barrera underlined what’s at stake if Leaf fails to mobilise the sums needed to rise to the challenge of reversing forest loss. “Ecuador just contributes 0.18% of global emissions, but if we deforest our forest we can emit 6bn tonnes of CO2,” she said. “It is very dangerous for the world.”

Who is in Leaf?

Corporate members: Amazon, Airbnb, Bayer, BlackRock, Boston Consulting Group, Burberry, Delta Airlines, E.ON, EY, GSK, Inditex, Intertek, McKinsey, Nestlé, PwC, Salesforce, SAP, Unilever and Walmart.org

Governments: UK, U.S.A. and Norway

Main picture credit: Bruno Kelly/Reuters


This article is part of the December 2021 issue of the Sustainable Business Review. See also:

ESG Watch: Pockets of progress, but still far from where we need to be on climate

Brand Watch: Big brands in push to take their suppliers on net-zero journey

Analysis: Why delivering on net-zero promises is ‘now absolutely the order of the day’

’Here comes the cavalry’ as brands vow to help accelerate climate solutions in heavy industry

Sustainable aviation fuel seeks clearance for lift-off


LEAF coalition  Emergent  deforestation  Glasgow Leaders’ Declaration on Forests and Land Use  Amazon  Brazil  Indonesia  REDD+  SBTs  UN Race to Zero  Ghana  Ecuador 

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