In this section:
This section includes resources on financing sustainable landscape projects, including methodologies for designing and marketing financial mechanisms and disbursing funds.
Why is this important?
For a growing number of financial institutions, environmental and social safeguards are now a basic requirement for investments. There is also growing momentum in ‘green’ investments to address climate change, although most so far have been in infrastructure sectors such as energy or transport. Equivalent investments in sustainable landscapes are relatively new.
Sustainable landscape initiatives will need financial mechanisms which are tailored to specific circumstances, such as the type of investor and the instruments used to distribute the money, such as loans or grants. To support this design process, the Unlocking Forest Finance project brought together an Advisory Group made up of representatives from global financial institutions.
A well-designed financial mechanism should be appealing to investors and also attractive to farmers and other producers on the ground. For farmers who have difficulty securing credit or are deterred by the complexity of the process, a well-targeted mechanism can help them access the funds they need. Other producers may be attracted to the scheme because of preferential borrowing rates or other novel features, such as weather insurance to protect from increasingly unpredictable conditions.