Katie McCoy l Palladium - May 24 2024
Partnerships for Forests - £1 Billion Catalysed and a Living Legacy for Nature

Katie McCoy in the field. 

In 2017, I joined Palladium to work on the Partnerships for Forests (P4F) program, a UK funded grants and technical assistance program managed by Palladium and Systemiq with ambitious goals to achieve by 2023. Not only were the goals ambitious, but P4F was also trying to do something different – to provide a proof of concept that public funds can leverage private finance into nature.

2017 was a limbo time for the world of investments in forests and sustainable land use. Many international corporates failed to meet their 2015 sustainable sourcing goals and instead stretched their goals to 2020 or even 2025.

Manufacturers and retailers need to commit to more sustainable and transparent supply chains. But those commitments also need to factor in the realities on the ground - including investment in new ways of working and the landscapes from which commodities are sourced.”

Tropical landscapes are complex. They are often multi-use and home to communities that depend on them for livelihoods, health, energy, and food security, just to mention a few. The solutions were never going to come from one set of stakeholders alone and this is what P4F was trying to do differently.

Over the course of the program, we were incredibly successful in mobilising private finance (£1.35 billion at a ratio of 1:11), bringing 8.6 million of hectares of land under sustainable management, and directly benefitting 326,000 people on the ground. One of the critical means of getting to those milestones was through supporting our Forest Partnerships, what we call the partnerships established between companies, communities, and others in the public sector across the tropical belt, through grants and technical assistance.

With such impressive headline figures, it might be easy for me to say that P4F successfully proved the concept.

But I believe P4F’s real living legacy goes deeper than the numbers.

For trusted, effective partnerships to thrive, they should be locally led.

Over its lifetime, P4F supported 98 Forest Partnerships.

In each of our operating areas, we had a regional team, building and delivering local strategies for P4F support on the ground. Our regional teams found the right local partners and worked closely with hem to ensure that any strategies for supporting partnerships were responsive, targeted, and impactful.

They also helped to establish partnerships that would build the local ecosystem of entrepreneurs and scale early-stage businesses.

Just one example is the Restoration Factory, a partnership between UN Environment Programme, UN Food and Agriculture Organisation, and Bridge for Billions (an entrepreneur support organisation), we helped refine the design and delivery of their entrepreneur incubation program to target those operating in restoration enterprises in and around tropical forest zones. We worked with cohorts of entrepreneurs to deliver impact in Kenya and then in Brazil. That support resulted in stronger cohorts supported by local and effective entrepreneur support organisations.

Scaling, growth and replication in nature-based solutions of all sizes is required at pace.

The fundamental design of P4F as a private sector-focussed program has been highly impactful, providing evidence that business incubation support via grants and technical assistance works.

It’s important to note that some but not all nature-based businesses can scale into large enterprises. There’s also an important role for small to medium enterprises, and this is often where some of the greatest positive social impacts are seen.

For example, Mahorahora are an Indonesia-based company that empowers farmers and communities to produce quality arenga sugar that is produced from tree sap, for sale in local and global markets, whilst protecting the landscape and providing sustainable livelihood models. They are currently working with around 150 smallholder farmers close to Halimun-Salak National Park, producing around 20 tons of arenga sugar per month. P4F supported Mahorahora to strengthen its impact by integrating a forest protection and forest regrowth model into the business plan as well as providing advisory support on how to scale the business.

While these types of business models demonstrate it is possible to create sustainable livelihoods and protect forests and landscapes, many small businesses in tropical forest countries might not be immediately attractive to large scale capital. A need remains for a variety of financial instruments and financial institutions to play different roles in financing and scaling nature-based solutions.

A living legacy

While this phase of P4F may be ending, the program leaves behind a living legacy of which the team and I are very proud.

The UK Government has committed £576 million in forests programming, which includes an additional £466 million beyond the £1.5 billion announced in Glasgow at COP26. At Palladium, the legacy of our work on P4F is seen very clearly in the launching of new impactful nature-based solutions initiatives such as REBUILD, a returnable grant facility that supports economically and environmentally sustainable businesses in the specialty coffee and cocoa sectors.

Since its launch in 2020, REBUILD has helped secure the livelihoods of more than 42,000 cocoa and coffee farmers, unlocked close to 20 million euros of finance for grantee companies, and placed over 78,000 hectares of land under sustainable land use.

Looking ahead

It’s undeniable that the challenge remaining to halt and reverse the joint climate and nature crises is enormous. In fact, the total primary forest loss during the lifetime of P4F – 2015 to 2023 – was 37.2 million hectares.
P4F brought 8.6 million hectares of land under sustainable land use in that same period.

However, the opportunities that lie in nature are equally vast. The work we started with P4F has shown the potential for transformational change in the world’s forests and the communities, economies and wildlife that rely on them.

But it’s only a start and the work must continue because these are landscapes on which we are all – locally and globally – dependent on being healthy in order to have a regenerative and just future.

For more, visit Partnerships for Forests or contact info@thepalladiumgroup.com.