Experts’ views on the role of the financial sector in driving and stopping deforestation
As part of the Solution Hack “Hacking Finance to End Deforestation” organized by the Lookout Station of EFI, we trained journalists to explore the role of the financial sector in stopping deforestation together with leading experts. Find out how our panelists, coming from international organizations, the financial sector, civil society and research see the link between the financial system and forests. What challenges and opportunities are there currently? How do they address these issues in their work? And what is sustainable finance for them?
During the Solution Hack, we discussed potential ways towards deforestation free finance. We identified data gaps that make it challenging for financial institutions to assess their deforestation risks and why we need a diverse range of data from different sources. Some concerns were raised over the fact, that data and deforestation policies alone are not enough and that extending the application of such policies and implementing commitments is even more important. We also learned about the need of the public sector to push financial institutions to take action and how financial and international organizations can cooperate to trigger change on deforestation, for instance, in Brazil.
In a second panel session we turned to solutions on how to overcome the finance gap for forest protection, sustainable management and restoration. Currently, there are still challenges and barriers such as different cultures, lack of awareness and also physical distance between financial and forest/environmental sectors to increase investments into nature. Experts emphasized that private investments into forests conservation, restoration and management are limited in the tropics due to social, economic and governance barriers, which are different from the northern hemisphere facing other issues such as mass production and price dumping of agriculture products. Against this background, we explored solutions to convince investors to increase investments into local projects and how blended finance and the public sector can support this.
Concerning the role of journalists, panelists emphasized the need for more communication on the topic. Experts expressed that there is a need for journalists to also communicate solutions and positive developments in the sector. Forerunners and innovation need support so that the financial sector at large moves away from being foe to being friend.