If you’ve attended some of the big global and regional forestry events lately, including the Asia-Pacific Rainforest Summit in 2016, you may have found yourself rubbing shoulders not only with the usual government officials, technical experts and forestry companies, but increasingly with bankers and financial analysts and advisers as well.
Today, there is a broad consensus that the private sector must incorporate social and environmental objectives in business operations and that the management of forests has moved beyond being about just forests to being about a range of sustainable development issues.
The Paris Agreement which urges countries to take action to conserve and enhance their forests, has widely been seen as a signal to global financial and energy markets of the need to shift investment away from sectors that have traditionally contributed to the problem of climate change, to low carbon sectors.
The forestry sector in Asia Pacific, where 500 million people depend directly on the forest, and many millions more indirectly through the production, sale and use of wood products, is one such sector. However, sustainable forestry projects in the region remain predominantly publicly funded, with very little private capital finding its way to the forest floor.
With the growing interest from the financial sector and recognition of the scale of investment needed to transition large and complex forestry sectors to a new, sustainable business model, there is clearly an opportunity as well as an imperative to direct more private capital towards sustainable forestry projects in the region.
But the multi-billion-dollar question remains – HOW?
RAFT has talked to some experts to understand further what are the obstacles and the actions needed to unlock large-scale financing for sustainable forestry in Asia Pacific.
Paul Tregidgo, Vice Chairman, Debt Capital Markets, Credit Suisse on the role of private capital in funding sustainable forestry and how to get there.
Howard Bamsey, Honorary Professor, College of Asia Pacific, Australian National University, on the role of governments in unlocking large-scale financing for sustainable forestry.
“The answer for forests and the answer for climate change is to change the direction of investments. Governments play a very important role –they can do that; and when they do, the investment will follow that new pathway”.