February 10, 2022 – Convergence Blended Finance, with funding from the Good Energies Foundation, will launch a Climate-Smart Forest Economy Investor Collaborative Pilot. The Pilot aims to increase investor awareness and interest in transactions focused on supporting interventions and ventures that could help unlock the full climate potential of forests and forest products by ensuring that investors coordinate to maximise all the available climate functions of forest value chains (sequestration, storage, substitution).
The Investor Collaborative (IC) will be made up of a working group of up to 15-20 investors who are all interested in and well-positioned to direct investments into ‘Climate-Smart’ forest economies. Concretely, the pilot will involve undertaking and developing a series of networking, education, and capacity building sessions for participating investors that will be transaction oriented and curated to increase awareness and interest amongst these select investors.
The objective of the pilot is twofold, 1) to build awareness with investors of opportunities across Climate-Smart forest economy value chains and to support them in origination, and 2) to test whether such an investor collaborative is a suitable solution to increase investments into Climate-Smart forest economies; with the ultimate objective of sustainably unlocking the full climate potential of forests and forest products.
Although headway is being made with a recognition of the role that forest value chains could play in decarbonizing the built environment and in improving carbon capture and storage in landscapes, significant gaps persist that prevent scaled and coordinated investments that could work in unison to maximise the carbon sink, storage and substitution functions of forest value chains. Specifically, for developing geographies, gaps persist in the early part of the forest value chain where know-how, incentives for sustainable forest management, tree nurseries and reforestation investments are frequently missing. As market demand for timber continues to rise, such investments into carefully considered nature-based climate solutions in forests could, in turn, encourage increased investor interest in associated manufacturing and construction industries to absorb a welcomed demand for sustainably sourced and produced wood products.
Financial investment, based on sound carbon modelling and safeguards, is fundamental to the success of a climate-smart forest economy and to increase reforestation, as capital from investors could be used to leverage improved forest management and create new forests as well as funding cutting-edge technologies, R&D, and more traditional investments into manufacturing, real estate, and recipients of forest products.
Convergence will draw upon its experience convening working groups such as i) its partnership with the UK Foreign, Commonwealth & Development Office (FCDO) to convene the COP 26 Blended Finance Platform in the lead up to COP 26, and 2) the Scale Working Group with USAID, that brings together leading ministries, development agencies, and philanthropic foundations to identify and support a series of blended finance vehicles that can achieve scale.
Further, Convergence has built expertise in natural capital specifically through its Design Funding program which has increasingly focused on market-based blended finance structures for climate and nature-based solutions.
About Good Energies Foundation
Good Energies Foundation is a Swiss-based private foundation. It was established in 2007 as an integral part of Good Energies Inc., a private equity company specialised in investing in the renewable energy and energy-efficiency industries. It works in partnership with Porticus, the international organisation that manages and develops the philanthropic programmes of charitable entities established by Brenninkmeijer family entrepreneurs.
Convergence is the global network for blended finance. On top of market acceleration through its Design Funding program, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence’s global membership includes over 200 public, private, and philanthropic investors as well as sponsors of transactions and funds.