Supporting communities and suppliers to become

FOREST POSITIVE

June 2, 2022
Charlotte Opal, charlotte@[Link]
CONTENTS
INTRODUCING THE FUND
EXAMPLE PROJECTS
FCF GOVERNANCE AND OPERATIONS
FAQs
INTRODUCING THE FUND
 Our forests are
IN TROUBLE
We are losing forests fast. Despite an increasing number of
No Deforestation pledges from companies, the rate of global
forest loss remains stubbornly high. In 2021 we lost 3.75
million hectares of primary tropical rainforest.
Commercial agriculture is the most important driver of
deforestation, accounting for 70-80% of deforestation
worldwide. And to feed a growing population shifting to
meat and dairy-heavy diets, agricultural production will need
to increase by 25% by 2050.
The financial crisis caused by the COVID-19 pandemic is
contributing to an increase in deforestation, as cash-strapped
governments de-fund forest protection efforts and choose to
Source for graphic: WWF, Living Forests Report 2015. Business as usual
stimulate economies by expanding extractive industries.
scenario as modeled by IIASA.

4
WHY WE CAN’T SIT BY AND LET
FORESTS DISAPPEAR
Pictures of orangutans being rescued from burning forests tug at our
heartstrings and losing something so beautiful seems wrong in itself. But even
taking a human-centered approach, forests are essential to our survival:
• 1.6 billion people depend on forests for clean water, fisheries, fuelwood,
and wild food plants.
• Forests are a critical store of carbon - 861 billion tons of carbon, to be
exact. Our annual emissions from fossil fuel are almost 10 billion tons of
carbon, so that’s almost 90 years of fossil fuel emissions stored in our
forests that we can’t afford to lose.
• Forests absorb carbon as they grow. Each year they pull a billion tons of
carbon out of the atmosphere.
• They stop erosion by slowing down rainwater flow that hits their leaves,
and fixing soil with their roots.
• They are home to most of our land-based biodiversity - tropical forests
harbor 50% of all known plant species. Forests offer habitat for
pollinators important for coffee, cocoa, and commercial fruit and tree
crops. Medical drug discovery from wild forest species remains critical.
 Businesses don’t have the right tools to fight
deforestation
• In the last five years, over 400 consumer goods companies
have committed to Zero Deforestation in their supply
chains.
• Yet the palm oil sector in particular cannot seem to shed its
reputation for deforestation, and calls for palm oil boycotts
continue.
• Agricultural expansion is still responsible for 80% of
deforestation today.
• Certification of agricultural commodities, the main solution
on offer, is failing to protect forests. Agricultural companies
with forests on their lands give them back to the
government, or sell them on for someone else to deforest.
Small-scale deforesters are hard to reach – buyers don’t
even know who to talk to until it’s too late.
• But what if global commodity buyers became part of the
solution?
WE HAVE AN
OPPORTUNITY
We still have forests left – 1/3 of our planet’s ice-free
land is covered by forest.
The Global Deal for Nature is a time-bound, science-
driven plan to address both climate change and the
extinction crisis. GDN advocates for 30% of terrestrial
areas protected by 2030 and 50% protected by 2050.
The most efficient gains for biodiversity and carbon
can be made in the tropical forest biome, where less
than 25% of the land is currently protected.
The Forest Conservation Fund links companies with
high-impact conservation projects in their supply
chains, and helps them become part of a global
movement to become not just deforestation-free, but
forest positive.
HOW DOES IT WORK?
Companies using or growing commodities in forest
landscapes donate to a central Forest Conservation Fund
(FCF).
FCF vets and monitors local conservation and restoration
projects, passing financing through to suppliers and
communities protecting forests linked to the company’s
supply chain.
FCF provides coaching and support for conservation
management and reports back to companies about how
their donation is being used.
Instead of offering a ‘stick’ of decertification or delisting a
supplier, the market can offer a ‘carrot’ of financial support
for forest protection. Farmers in the US and Europe are paid
to protect biodiversity. Why not farmers in tropical
countries?
 THE FCF MODEL

80% of donations
Satellite monitoring
Brands, $ Technical advice
retailers,
traders, Impact Activity reports
donors info Financial audits
Impact/field data
 FCF’s first thirteen
projects
118,487 hectares
20% funded

• Tropical agricultural commodities have a forest footprint – even if the forest was cleared for
PROTECT farms long ago.
• Through the FCF, companies can compensate for this plantation footprint with an equivalent
YOUR forest conservation footprint, to create a forest positive supply chain: responsible production
FOREST linked with active forest protection.
• FCF has vetted conservation projects in key palm oil, timber, cocoa, coconut, rubber, and pulp &
FOOTPRINT paper landscapes, and will build up the project portfolio over time to match donors’ sourcing
volumes with numbers of hectares protected.
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HOW WILL DONOR
COMPANIES BENEFIT?
Direct links with supply chains – opportunity to
engage with mid-sized growers.

Build back the reputation of their industry by

directly conserving forests – easy to
communicate to customers, investors, and
employees. Instead of offsetting impacts,
“insetting” by working in current supply
landscapes.

Transparent use of funds, with visible impacts

that don’t just avoid deforestation but are ‘forest
positive’. Potential to visit projects and tell stories
from the field, building both employee and
customer loyalty.
 HOW MUCH SHOULD COMMODITY USERS CONTRIBUTE?
We encourage commodity users to build up to eventually support the conservation of an area equal to the
plantation footprint necessary to grow their products. As a compliment to companies’ efforts to clean up their
supply chains, this will deliver truly deforestation-free products. Below are the prices per ton of conserving an
area equal to that needed to grow the ton of product.

Product Yield per hectare Annual conservation Conservation donation as

(global average) donation per ton (at percentage of 5-year
$40/hectare) average market price

Palm oil (CPO) 5 MT $8 1.2%

Cocoa 450 kg $90 3%
Coffee 870 kg $46 1.4%
Coconut oil $8 (≈1% of FOB price because it’s a byproduct)
Rubber 1400 kg $0.03 1.6%
Paper products 4 MT $10 1-1.4%
Palm kernel oil (PKO) $10 (≈1% of FOB price because it’s a byproduct)

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EXAMPLE PROJECTS
 Supporting local projects, with
community and government
support at their core
Conservation projects do not work without the support of local
communities and governments. The Forest Conservation Fund
differs from other approaches through its focus on grassroots
projects led by local NGOs, communities, and suppliers.

Funds can be used to support sustainable business projects for

communities living in or near the forest – ecotourism, marketing
of non-timber forest products, or even agriculture projects that
increase yields on existing farms and reduce the pressure to
clear new lands.

When local communities benefit from conservation projects,

they become additional forest protectors – important eyes and
ears in the field.
KENYIR STATE PARK Forest size: 30,000 hectares
CO2 savings through avoided
TERENGGANU, PENINSULAR MALAYSIA
OIL PALM, COCOA, AND RUBBER LANDSCAPE
deforestation: 50,000 tons/year

Much of the forest on peninsular Malaysia has been converted to oil palm plantations, but
important tracts in the north remain. This ‘Central Forest Spine’ provides critical habitat for tigers,
forest elephants, and gibbons, but palm oil mills and plantations are expanding into the forest Spine Kenyir
State
from both its eastern and western edges. Park

In 2018 local FCF partner Rimba Research worked with the Terengganu State Park to create Kenyir
State Park, covering 30,000 hectares of rainforest and bordering Malaysia’s only national park.
Kuantan
FCF donors can support Kenyir State Park by helping Rimba to train rangers, create a poaching Port
patrol team, and help local communities to develop forest-friendly livelihoods. By supporting
conservation in Terengganu State, an important frontier for palm oil expansion, buyers would send a
clear message of support for a vision of responsible palm oil development for peninsular Malaysia
that goes hand-in-hand with protecting standing forests.
INAINA WILDLIFE MANAGEMENT AREA Forest size: 4,176 hectares
CO2 savings through avoided
PAPUA NEW GUINEA LOWLAND FORESTS deforestation: 6,230 tons/year
COCOA, COCONUT, COFFEE AND OIL PALM LANDSCAPES

Papua New Guinea’s forests house species found nowhere else on earth, including paradise birds and the Queen Alexandra’s birdwing
butterfly, the largest butterfly in the world.
PNG is a high forest cover country, with 70% of its land still covered by forest, but it is disappearing at a rate of over 3% per year. A
typical pattern of deforestation is either intense logging followed by complete conversion to oil palm or coconut, or gradual conversion
to coffee and cocoa plantations under the canopy.

FCF is partnering with the local NGO Partners with Melanesians, which trains
communities to do wildlife patrols and biodiversity monitoring and helps them gain
legal protected area status for their forests. In 2017 they helped the Fagagara
indigenous group create the Inaina Wildlife Management Area, covering almost 4,200
ha. In 2021 Inaina will use FCF funds to:
• Restore 1,500 hectares of degraded forest through planting native tree seedlings
• Build a lodge and watchtower to better be able to identify illegal logging and
sawmill activities
• Train and equip rangers to patrol and monitor biodiversity
• Develop alternative livelihoods pathways for the community
MARUPIARA FOREST Forest size: 1,142 hectares
CO2 savings through avoided
PARA STATE, BRAZILIAN AMAZON
deforestation: 9,632 tons/year
OIL PALM, COCOA, SOY, TIMBER AND CATTLE LANDSCAPE

Marupiara Forest is an area of untouched native

Amazonian rainforest owned by rural cattle rancher
Mauro Lucio de Castro Costa. In 2011 Mauro created the
Pecuária Verde Program (Green Cattle Ranching Initiative),
an innovative program that aims to promote social and
environmental transformation in animal ranching through
animal welfare techniques, intensification of pasture
rotation and pasture fertilisation.

Brazilian law requires Mauro to protect 50% of his land,

but in addition to this, he wishes to protect 1,142 ha in
partnership with FCF.

Deforestation in Pará state is the highest in Brazil, with

almost 27 million hectares lost between 2000 – 2018.
Mario and local partners will use FCF funds to not only
protect the Marupiara forest, but to train other local
farmers in how to increase their yields without resorting
to deforestation, and inspire them to protect even more
forest.
PHILIPPINE EAGLE
Forest size: 24,630 hectares
ANCESTRAL FOREST CO2 savings through avoided
SIERRA MADRE BIODIVERSITY CORRIDOR, deforestation: 66,920 tons/year
PHILIPPINES
COCONUT LANDSCAPE
This forest is protected as the ancestral domain of the Dumagat and Alta Indigenous communities. It
consists of old-growth forest, home to the critically endangered Philippine eagle and several other
threatened species. The forest borders the Aurora Watershed Forest Reservation and Aurora
Memorial National Park, and is of major historical and cultural importance to the two indigenous
groups.

The Dumagat and Alta are historically hunter-gatherer communities with a strong affinity for nature.
Their forest, rivers and coastal waters provide them with ferns, palms, honey, wild rambutan, shrimp,
crabs and fish as sources of nutrition, livelihoods, medicine and structural materials. Daluhay (a
Philippine NGO) has been working with the Indigenous communities since February 2016. Together
they created a Community Conservation and Protection Plan for the area and developing a network of
community conserved areas to protect the Sierra Madre Biodiversity Corridor from infrastructure
projects and encroachment.
With FCF support, the communities plan to carefully document and disseminate
their Traditional Ecological Knowledge on conservation systems and practice;
restore 400 ha with native trees; train 50 members of their tribal council on
improved governance and leadership; and research and develop two forest-based
sustainable livelihoods programs.
FCF GOVERNANCE AND OPERATIONS
 Forest Conservation Fund Board
• Not-for-profit foundation registered under Swiss law.
• Appoints Financial Administrator, Secretariat, and Grant Committee members
• Legally responsible for FCF activities

Financial Administrator Secretariat

Grants Committee
• Comptabilis, a Geneva-based social • Responsible for day-to-day Fund
business operations, including supporting the • Conservation and social specialists.
• Receives donations and manages bank Board, managing Financial • Meets quarterly via teleconference.
account (UBS) Administrator, supporting Grants Approves new projects and
• Disburses funds quarterly to Grantees Committee, donor recruitment, project monitors/re-approves existing projects
and Secretariat. development, project monitoring, annually
• Prepares financial info for Board public communications, supporting • Global, English language for now. Can
meetings, annual filings, auditor grantee network. create country or language-specific
(KPMG) • Earthworm Fdtn. nominated to serve committees in the future.
• Invests surplus capital (if any) this role for a 3-year period

= nominates = manages and/or supports

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 Richard McLellan
Simon Lord
- CHAIR - Angel Manembu Bastien Sachet
Former Chief Sustainability
Former Head of WWF’s Executive Director, Global CEO, Earthworm
Officer, Sime Darby
Global Forest and Trade Concern Institute Foundation
Plantations Berhad
Network

MEET THE FCF BOARD

 Inza Kone
Liza Zogib Sam Moko Rob McWilliam
Director of the Swiss Center
- CHAIR - Papua New Guinea REDD+ Technical Director,
for Scientific Research,
CEO, DiversEarth Project Manager, UNDP Earthworm Foundation
Ivory Coast

MEET THE FCF GRANTS COMMITTEE

MONITORING AND IMPACT
CARBON, LAND COVER AND BIODIVERSITY
• FCF uses Airbus/Earthworm’s Starling tool for near
real-time monitoring that forest cover is
maintained.
• An estimate of current carbon stored and
sequestered each year can be provided
• Project must do field monitoring of land cover and
biodiversity, e.g. SMART field tool.
IMPACT INDICATORS
• Main impact indicator is forest protected. Will also
be able to report on biodiversity impacts,
depending on other tools used.
• Grantees also indicate how they will measure their
impact, including social impact.
FINANCIAL
• Require third-party financial audit (paid for by
grantee; can be part of their normal annual financial
audit).
• Field visits of at least 10% of projects.
 CARBON METHODOLOGY
• FCF projects provide carbon savings through avoided deforestation. Because they are located in
frontier landscapes for agricultural expansion, they can potentially be used in carbon footprint
calculations for agricultural products.
• Carbon savings are not certified, but could be used in reporting offsets of Scope 3 emissions.
Many FCF projects will investigate getting carbon certification in the future as a source of long-
term conservation funding.
• Emissions estimate of x tons CO2 equivalent/hectare/year using the Verra methodology
(VM0015). Key assumptions:
• Province-level background deforestation rates from Global Forest Watch, or more specific baseline (BAU) case if
known (for instance planned conversion to plantation)
• Additionality: FCF projects achieved conservation tenure only within the previous 5 years. All new finance is also
considered additional.
• No field data collected. Use best available science for carbon storage in the relevant biome. Other sources include
Roundtable on Sustainable Biomaterials default values for carbon storage, RSPO GHG calculator for forest/palm
carbon sequestration.
• Conservative methodology: 20% buffer.
• Forest health metrics (species mix, potentially some tree measurements) will be tracked over
time and could contribute to more refined carbon calculations in the future – to be explored.
 POTENTIAL SOCIO-ECONOMIC METRICS
Potential metric Expected impact/goal
#of community members involved in conservation TBD. Community-led patrols are an easy way to involve
project as %age of total community lots of people, and bring multiple benefits. Education
#of trainings/educational activities programs also planned.
Market activity; household cash income Increase with investment in alternative livelihoods. Could
potentially see impact in 3 years.
%age participation of women in conservation/livelihoods Aim for at least 50%
activities
Diversity of food crops cultivated Increased diversity could show improved nutrition (but
baseline study needed to determine if nutrient-deficient)
Health indicators, e.g. replacing charcoal used for Improving through interventions financed by FCF donors
household energy generation, access to critical care
Access to primary and secondary education Improving through interventions financed by FCF donors

Poverty Probability Index Improving through interventions financed by FCF donors

PROJECT
ELIGIBILITY CRITERIA
ORGANIZATIONAL
REQUIREMENTS
• Legally registered community-based organization,
private company, private individual, NGO, research
institution, university, or religious entity

PROJECT AREA • Tenure compatible with conservation for at least 20

years
REQUIREMENTS • Organization has legal use or management rights
• Human and financial resources to ensure protection of
• Natural forest (non-native species the area and active involvement of the surrounding
<15%) community in conservation activities
• At least 500 contiguous hectares • A policy that they will not deforest any natural forest
• Conservation status granted in the areas
last 5 years • Demonstrate an understanding of risks to the project
ELIGIBLE ACTIVITIES FOR FUNDING ACTIVITIES NOT ALLOWED IN
CONSERVATION AREA
• Management and monitoring of the site, including for
biodiversity (SMART or equivalent) and social impact
• No commercial logging or hunting
• Land taxes, licenses, or permits for the conservation
area • No hunting, fishing, harvesting of rare,
threatened, or endangered species
• Human resources and overheads related to
conservation • No planting of non-native species

• Restoration with naturally occurring local forest • No cultivation of non-native species (except
species when already planted and <15% of area)

• Re-introduction of native fauna

• Development of income-generation activities within . . . Commercial and subsistence activities which
the site (must comply with rules on right) do not harm the long-term integrity of the forest
are allowed. This includes sustainable collection
• Development of income-generation activities with of non-timber forest products, sustainable fishing,
local communities off-site (must be part of a plan to subsistence logging/hunting, ecotourism.
gain support from communities for conservation)
• Legal support to finalize conservation-based tenure
Company, NGO, or community submits project plan and budget. CONSERVATION
FCF Secretariat prepares packet, including forest Area of Interest to be
PROJECT
monitored through Airbus/Earthworm’s Starling forest mapping tool.
LIFECYCLE
Grants Committee reviews application for five-year grant.

Once approved by the Grants Committee, Financial Administrator disburses

first 3 months of funds.

Each quarter, project submits brief activity report and budget of how grant
was spent to FCF Secretariat.

FCF checks that forest is intact & approves next quarterly payment to be
transferred by the Financial Administrator from the Fund.

Grants Committee reviews and re-approves projects on an annual

basis. Can request specific or random field visits.

28
FAQs
HOW DOES FCF DIFFER FROM OTHER CONSERVATION PROJECTS?
• The Fund is the first of its kind to offer a simple hectare-for-hectare ‘footprint’ model for
commodity users. Brands can simply calculate the plantation footprint they need for their
ingredients, and conserve an equivalent area by supporting high-impact, locally-managed
projects.
• The Fund is not-for-profit and fully transparent about how funds are used. The project financials
will be available on the website, along with the monitoring results of biodiversity protection and
other impacts.
• The Fund aims to ‘uberize’ conservation by empowering local communities and private sector
actors to protect forest under their control. We will build a knowledge-sharing platform to
connect grantees and help them learn from each other, and partner with large environmental
NGOs to recommend local projects and share best practice.

HOW CAN YOU EXPECT PLANTATION COMPANIES TO BECOME CONSERVATION

ORGANISATIONS?
• Cocoa companies have had to learn how to ensure the provision of schooling and education for
farmers’ children, after child labour scandals. Plantation companies can, and must, learn how to
conserve natural areas. The Forest Conservation Fund can help companies identify credible local
NGOs to support implementation, but having the plantation company directly engaged will build
long-term sustainability of the project.
DO YOU FUND FOREST RESTORATION AND TREE-PLANTING?
• Forest restoration can encompass many activities along a spectrum, from building a nursery and
actively re-seeding cleared areas with native species, to simply protecting the forest and letting it
restore naturally. Trying to re-create natural forest in open areas is very difficult and expensive
and can take decades – tropical forests can contain hundreds of species per hectare, so it is
impossible to plant them all. Forest Conservation Fund projects will certainly practice both active
and passive restoration activities, but will probably focus on protecting high-quality standing
forest and letting it restore with little assistance, since this is a more certain outcome and creates
important carbon and biodiversity benefits at a lower cost. In our view, Nature is the best tree-
planter!
WHAT ABOUT THE PRICE OF BUYING THE LAND? WHAT ABOUT OPPORTUNITY COSTS?
• Land acquisition is much more expensive. We will focus on working with companies who already
have titles to forests, and helping communities gain titles to their forests. Millions of hectares can
be saved without having to buy forests.
• It’s almost impossible to calculate the real costs and benefits, both environmental and socio-
economic, of conservation vs. conversion to agriculture. We believe that communities can still
thrive while forests are protected, especially if they are involved in protection.
IS $40 PER HECTARE ENOUGH?
The cost of conserving forests varies according to the level of threats (it is easier to control access to remote
places) as well as the salaries and income levels in the region. $40 per hectare per year is an average cost of
conservation taking into account these factors, as well as inflation in future years. This number should cover
natural restoration efforts but not intensive tree-planting.

The table below shows average costs for a variety of conservation projects.

Price per hectare to protect,

Country Source
in 2020 USD
Brazil, Malaysia, Indonesia $6-$60 E. Meijaard, M. Ancrenaz, B. van Balen (2020).
Indonesia $5-$24 State Min. of Env. (2006), “Protected Area Funding in
Indonesia”
Indonesia $5 Private protected area, Sumatra (2017)
Indonesia $16 Forest restoration concession, Sumatra (2018)
Congo – DRC (Virunga) $2.5 2006 Expert appraisal report for World Bank/GEF
Belize $16 International Tropical Conservation Fund (2017)

Ecuador $2 IIED (2008)

Want to get involved? Write us at info@[Link]