Why companies must invest in innovative solutions for forest conservation and restoration

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Marina Ruta, Business Engagement Lead, 1t.org., Allison Voss, Innovation Ecosystem Lead – Nature, World Economic Forum

• 21 March is International Forest Day, this year with the theme of innovation.
• Natural forests can contribute up to 30% of the carbon emission mitigation needed by 2030.
• Nature-based solutions remains severely underfunded, only currently receiving one-third of the investment needed by 2030.

Today marks International Forest Day, an occasion to raise awareness about the importance of forests and trees. This year’s theme, Forest and Innovation – New Solutions for a Better World, underscores the urgent need for innovative approaches to address the challenges facing our woodland areas. From mitigating climate change to preserving biodiversity and supporting local communities, investing in forest conservation and restoration is crucial for a sustainable future.

The scientific consensus is clear: Natural forests, if allowed to recover, can contribute significantly to carbon emission mitigation efforts. According to a study recently published in Nature, natural forests have the potential to mitigate at least 30% of the carbon emissions needed by 2030, provided conservation and restoration efforts prioritize healthy biodiversity and the well-being of local communities. This underscores the vital role forests play in combating climate change and preserving ecosystem health.

Corporate awakening to nature’s value

In recent years, there has been a notable shift in corporate consciousness towards valuing natural capital. Over 300 companies have adopted recommendations from the Taskforce on Nature-related Financial Disclosures (TNFD) for including nature-related financial disclosures in their corporate reporting. This signals a significant shift towards integrating nature-positive strategies into business operations and decision-making processes.

Despite this progress, investment in nature-based solutions (NBS) such as forest conservation and restoration remains woefully inadequate. Current finance flows to NBS fall far short of what is needed, with private investment lagging behind, accounting for less than 1% of investments with a direct harmful impact on nature. Bridging this financing gap is essential to scale up conservation and restoration efforts and unlocking the full potential of NBS.

The business case for forest action

Fortunately, there is cause for optimism. 1t.org, a global platform for the conservation, restoration, and growth of trees, emphasizes the strong business case for investing in forest action and increasing private financial flows to high-quality projects removing carbon, enhancing biodiversity and improving local livelihoods.

To support corporates in articulating the case, 1t.org have developed an executive briefing on why forest conservation and restoration matter for business. Companies that prioritize these efforts stand to benefit in several ways: Firstly, by increasing business resilience, staying ahead of shifting investment policies demanding corporate action on biodiversity loss, and mitigating supply chain disruptions caused by ecosystem shocks. Secondly, embracing innovation in this space can drive profitability and growth, unlocking new market opportunities and enhancing brand reputation as a value-based market leader. Finally, by engaging in collective action on forests, companies can ensure the long-term sustainability of their operations while hedging capital risks and fostering stronger relationships with local communities and ecosystem partners.

Over the past four years, 1t pledgers and members of the 1t.org Corporate Alliance have demonstrated the economic viability of conserving, restoring and growing trees. Their commitment underscores the potential for businesses to align profit with environmental stewardship.

Just this month, 1t.org has celebrated four new pledges with great geographical diversity: OCP Group, our first African company, with a commitment that spans harnessing the value of local trees, empowering communities, and nurturing livelihoods in Africa and beyond; Hari Krishna Exports, who aim to grow 10 million trees by 2030 to improve and conserve ecosystems in India; China’s Xiamen Airlines, who will restore and grow 15,200 trees, enhance ecological functions, empower youth and local communities in Inner Mongolia’s Tengger Desert and the mountainous areas in Liaoning Province; and EPM with a pledge to protect and conserve 26,000 hectares of forests and donate 20 million trees by 2030 in Colombia.

Innovations driving change

Moreover, there are encouraging signs of innovation and investment in this space. Through UpLink, the Forum’s open innovation platform, 12 Top Innovators were selected from a recent challenge on “Restoration at Scale”. These businesses offer great examples of investable solutions for companies ready to take action. These solutions span a range of approaches, from technology-driven conservation methods to innovative financial products and community-led initiatives that promote sustainable land management practices.

Corporates are already starting to partner with and support the growth of these types of innovators. For example, in 2021 Accenture provided an initial grant to Wilder Climate Solutions to build a platform, Squiirrel, which is focused on building the supply of source-identified, locally adapted seed. Among other notable solutions Uplink awarded was Terraformation, which is working with corporates in the US on a seed-to-carbon accelerator, demonstrating how nature-based solutions can drive carbon sequestration. Meanwhile, Treeapp’s innovative model rewards users for watching ads by planting trees, and is partnering with companies like L’Oreal and Marriott. Diverse solutions such as these can offer new means of tackling critical bottlenecks, such as seed supply, and at the same time offer new opportunities, such as unlocking new ways of financing forests.

Through 1t.org, corporates are also providing direct mentoring and advisory support to help grow and scale innovative business solutions. For example, Ericsson is leveraging its expertise to support the growth of innovative forest conservation and restoration efforts. Through its volunteering programme, the company is providing information and communication technology experts to mentor select UpLink Top Innovators in refining AI-based software models and other tech-driven approaches.

Similarly, Rabobank has taken steps to innovate financial products internally, such as its ACORN platform, while its Carbon Bank team is also providing select UpLink Top Innovators with pro bono capital advisory and blended financing mechanisms. Such collaborations allow for technical know-how to be applied and tested in new ways, which is needed to find more efficient and effective ways to conserve and restore forest landscapes.

It is clear that the tools and mechanisms for forest protection we have today are not sufficient. Innovation is needed and must be applied at the required speed and scale. So as we commemorate International Forest Day and reflect on this year’s innovation theme, let us heed the call to action. By harnessing the power of technology, finance and collaboration, companies can play a pivotal role in safeguarding our forests for generations to come.