The latest insights from the We Mean Business coalition

Financing the Future Forest: Private Sector Pathways for Change

Tropical forests sit at the heart of the global economy. They store carbon, regulate climate, protect water, safeguard biodiversity, and sustain hundreds of millions of livelihoods while supporting global supply chains, public health, and energy security. Yet they’re disappearing at alarming rates — a record 6.4 million hectares were lost in 2024, from a combination of agricultural land conversion, fire, logging, and mining.

To reverse this trend, the Forest Finance Roadmap for Action launched at Climate Week NYC 2025 outlines a pathway to close the USD 66–80 billion annual gap in tropical forest funding. The roadmap’s message is clear: the private sector must be more than a donor — it must be a co-architect of solutions. A global shift towards more productive and resilient land use systems is already underway, yet the pace and scale of progress is insufficient.

Three opportunity areas stand out for businesses ready to act: the forest bioeconomy, jurisdictional REDD+ (JREDD), supply-chain finance and private-sector alignment. Each offers real potential for growth, innovation, and impact when paired with local capacity building and technology-driven transparency.

The Forest Bioeconomy: Building Value from Nature

The forest bioeconomy is reshaping industries — from construction and packaging to textiles and pharmaceuticals — around renewable, low-carbon materials.

According to UNEP and the World Bank, scaling sustainable forest enterprises could unlock USD 15–20 billion a year in new investment. Opportunities include:

• Sustainable timber and engineered wood for low-carbon construction.
• Bio-based materials and textiles, such as bamboo, resins, and fibers.
• Agroforestry and regenerative farming, integrating trees and crops to boost yields and biodiversity.
• Circular bio-industries that turn forest residues into energy, materials, or chemicals.

Companies are already seizing the possibilities of the bioeconomy. Veja shoes for example, are manufactured using 50% sustainably sourced Amazonian rubber, while the Brazilian pulp and paper supplier, Suzano, has committed to producing 10 million tons of products made from renewable raw materials by 2030 that can replace plastic and petroleum-based products.

Blended finance and risk-sharing facilities — like the proposed Tropical Forests Forever Facility — can help de-risk additional ventures and attract private capital.

Yet financial returns alone aren’t enough. The roadmap emphasizes inclusive value chains that partner with Indigenous populations and local communities (IP&LCs). These groups hold traditional knowledge, manage vast forest areas, and must share directly in the benefits. Models such as Forest and Farm Producer Organizations (FFPOs) demonstrate how local cooperatives can drive both conservation and economic growth.

Investing in the forest bioeconomy means investing in people as much as in products.

Jurisdictional REDD+: Scaling Integrity and Investment

REDD+ — the system for rewarding reduced deforestation — is evolving. The jurisdictional approach (JREDD+) moves beyond individual projects to track and reward emissions reductions across entire regions or countries. Individual projects can also be nested into the jurisdictions.

This shift matters for the private sector because it produces high-integrity carbon credits at scale, aligned with government policies and social safeguards. For companies, JREDD+ opens several doors:

• Purchasing jurisdictional credits for credible net-zero commitments.
• Co-investing in jurisdictional programs alongside governments or multilateral funds.
• Developing digital MRV (measurement, reporting & verification) tools using satellites, AI, and blockchain to increase transparency and reduce costs.

Investment platforms like Silvania are opening new opportunities to scale jurisdictional approaches. Today, Silvania has a program in Tocantins, and is developing new ones in Piauí Brazil and Peru in partnership with Grupo Perú – a coalition representing three Indigenous Peoples organizations in the country: AIDESEP, ANECAP, and CONAP – which is the world’s first JREDD+ program on Indigenous lands. Through its collaborative Race to Belém campaign, Silvania aims to unlock private finance to curb deforestation and support Indigenous peoples, traditional and local communities in the Brazilian Amazon by providing $1 of upfront capital for every ton of carbon purchased from high-integrity jurisdictional programs.

Meanwhile, tech-driven monitoring firms like Pachama and Nature Metrics are already setting new standards for data-based integrity.

Critically, JREDD+ frameworks are designed to ensure benefit sharing with local and Indigenous forest custodians — channeling finance to the people whose stewardship makes emissions reductions possible. Despite managing more than 1/5th of the world’s land, indigenous populations and local communities receive less than 1% of climate funding. Done right, JREDD+ channels finance more directly to these groups while helping deliver a triple win: climate mitigation, resilient local economies, and restored ecosystems.

Supply Chain Finance: Aligning Profit and Protection

Global supply chains in palm oil, cocoa, soy, and beef are among the largest drivers of deforestation — but they also represent powerful leverage points for change.

With initiatives like Finance Sector Deforestation Action Initiative, ISSB, and the Taskforce on Nature-related Financial Disclosures (TNFD) now demanding traceable, deforestation-free sourcing, financial institutions and corporates are redesigning incentives:

• Banks and investors can create green credit lines or sustainability-linked loans for verified producers.
• Corporates can provide pre-finance or premium pricing for deforestation-free supply.
• Tech innovators can deliver digital traceability platforms combining satellite data, blockchain, and geolocation mapping.

These mechanisms transform compliance into competitive advantage. For example, Danone’s Soy Traceability Project in Brazil ensures that soy used in its supply chain is fully traceable and deforestation‑free, demonstrating how finance and sourcing incentives can drive sustainable practices. Meanwhile, Rabobank’s Acorn platform helps smallholders generate verified agroforestry carbon credits that corporate buyers can purchase directly — combining supply-chain finance and carbon markets.

Ultimately, aligning finance with forest protection isn’t just ethical — it’s risk management. Transparent, traceable supply chains reduce exposure to regulation, reputation damage, and market loss while securing long-term resilience.

Capacity Building and Local Partnerships

No forest finance model can succeed without local ownership. The roadmap stresses that strengthening capacity, governance, and entrepreneurship among IP&LCs is essential.

The private sector can play a transformative role by funding technical assistance, incubating local enterprises, and supporting the recognition and protection of local land rights. Together, these investments deepen local ownership and improve project durability.

Across Africa, Latin America, and Asia, examples abound: Indigenous cooperatives producing certified timber and non-timber products; smallholders restoring degraded land through agroforestry; and local women-led enterprises creating jobs in sustainable forest products.

Investing in capacity building ensures that climate finance translates into long-term prosperity — and that the people protecting forests are the ones who benefit most.

Technology and Monitoring: The Backbone of Credibility

Technology is the invisible infrastructure of modern forest finance.

Remote sensing, drones, AI, and blockchain are enabling real-time monitoring of deforestation, carbon stocks, and supply-chain performance. These tools make carbon credits verifiable, supply chains transparent, and community projects accountable. For example, Brazilian based environmental services firm, Geonoma, leverages advanced geoprocessing capability to create MRV frameworks that are adding credibility to carbon market projects in Tocantins and other regions.

The market for forest monitoring and traceability technology is booming; precision forestry technology alone—the use of tools like remote sensing, GPS, drones and GIS—is projected to reach a market value of roughly $10 billion by 2032. For startups and investors, this is a rapidly expanding ecosystem and a key enabler of integrity across all other finance mechanisms.

When transparency improves, confidence grows — and so does investment.

From Roadmap to Reality

The Forest Finance Roadmap offers a vision of forests as engines of sustainable growth — not victims of it.

For businesses, three messages stand out:

1. The bioeconomy is a rising market for renewable products and circular innovation.
2. Jurisdictional REDD+ offers scale and integrity in climate finance.
3. Supply-chain alignment turns deforestation-free commitments into tangible financial incentives.

Across all three, success depends on inclusion, innovation, and integrity — engaging communities as partners, harnessing technology for transparency, and upholding rigorous standards for environmental and social performance.

Forests are not just a climate solution—they’re a foundation for resilient markets and shared prosperity if we choose to finance them that way. Companies that invest in them today won’t just meet sustainability targets — they’ll help build a future where nature and business grow together.