Ashley Camhi, director of innovative finance, forests and climate change at the Wildlife Conservation Society and leads the engagement with the private sector on HIFOR. Camhi explains HIFOR's work in providing an investment solution that bridges the gap between nature and climate.
Environmental Finance (EF): What is HIFOR and what is its mission?
Ashley Camhi (AC): HIFOR is the High Integrity Forest Investment Initiative. Our goal is to scale financing for the largest (>100,000 ha), most intact and highest integrity tropical areas – those that are least degraded – around the world. The remaining intact tropical forests exist in the Amazon and Congo Basins and some areas of southeast Asia.
Until very recently, the focus on forests has been on restoring areas that have already been deforested or slowing deforestation where it is already occurring. But for very large areas of high-integrity forest that provide considerable ecosystem services, there are no real scalable finance solutions.
So, the Wildlife Conservation Society started this initiative about two years ago to think about how we scale financing for these areas. These areas are owned by many different stakeholders, such as governments, indigenous peoples, local communities, nonprofits, and so on. Most people assume these forests are protected and nothing needs to be done. But these areas are facing significant threats. Many are at risk of development, whether it is mining, agriculture or roads. They also face considerable risks due to climate change and are degrading.
Historically, these areas have been funded – often insufficiently – by governments or philanthropy. But there is a growing realisation of the role to be played by the private sector finance. Across the world, businesses are dependent on natural capital but are not paying for it.
That's where HIFOR comes in.We are aiming to build a market around these ecosystem services, so the private sector contributes to protecting and conserving them by compensating the stewards of these areas. One of the sectors that has started to understand the importance of these areas is the financial sector because they are thinking about the risk to their portfolios. And when you think about systemic risk, these ecosystems, these habitats are critical for global climate and water regulation.
EF: What is HIFOR doing to mobilise capital to help protect these key assets?
AC: One of the things that WCS has been doing is working with a range of organisations to create a HIFOR methodology and a standard. These are publicly available at www.hifor.org
Through the process of creating a methodology, we have created what we call a HIFOR unit – a land-based unit, which represents one hectare of high- integrity tropical forest maintained over a 10-year period within a large landscape. It's a reflection of what we are seeing, or lacking, in the climate space and biodiversity credits. The areas that HIFOR focuses on address a wide range of issues such as ecosystem services support, biodiversity, climate, and water use. In comparison, many carbon credits are insufficient for removing carbon or considering other aspects.
Buyers will be able to purchase a HIFOR unit and can make claims based on those purchases. We have a paper that goes through all the different claims that can be made and how those map into voluntary and regulatory frameworks. The units could play an important role as the landscape evolves from voluntary frameworks to potentially more regulation.
They are also important for investors' bottom line when you think about risk and risk mitigation. The areas HIFOR focuses on are maintaining and stabilising most of our global systems. So, we are increasingly seeing the importance of being able to invest in them sufficiently.
We have also been doing a lot of work with governments, indigenous peoples, local communities and other stakeholders to demonstrate that these projects can work. We have already identified several pilot schemes. Our first pilot is Nouabalé-Ndoki National Park in the Republic of Congo, an area that includes over 300,000 hectares of the most pristine tropical forest with extremely high levels of biodiversity and carbon absorption.
EF: What are the main differences compared with biodiversity credits?
AC: The conversation around biodiversity credits is still relatively nascent, although there are a lot of institutions working at setting those standards. But what we have seen in that conversation is the emergence of two different goals.
One is biodiversity uplift and how you increase biodiversity. The areas that HIFOR focus on already have some of the highest levels of biodiversity, our goal is to conserve and protect it, so it doesn't fit into this category.
The other is nature stewardship. For HIFOR, nature stewardship fits very well into that conversation because our projects already have high levels of biodiversity, and we want to maintain those. As the nature stewardship category emerges in the biodiversity credit discussions, we see an explicit opportunity for HIFOR.
We also think the HIFOR unit will help to bridge the gap that currently exists for climate and nature-focused investors through our commitment to protecting and conserving these critically important areas with high biodiversity. Hence, HIFOR's tagline: Nature is complex. Investing in it shouldn't be.
EF: What challenges do nature-focused investors face and what is HIFOR doing to help address those?
AC: A lot of the conversation we hear from the private sector surrounds the lack of data when they are thinking about the risks and opportunities of investing in nature. It is a legitimate concern for measuring impact. We are very cognizant of this and have very good scientific data to show the benefits of investing in HIFOR areas.
When investing in these areas, we need to think not just about a company's impact within the supply chain, but also the impacts they have globally and the benefits they are receiving. It's a new type of conversation about how biodiversity and natural capital play a role in supporting the private sector that we haven't seen before. There are a lot of organisations emerging to drive this conversation forward, such as Nature Action 100, and others bringing financial institutions together, like UNPRI. But it is going to take time, which we don't have. These areas are at risk of degradation, one road can completely change things, and we can't adequately restore them once they're lost.
EF: What do you hope to see emerge from COP16?
AC: The private sector has certainly been galvanised to act and embrace nature in recent years. But the question is, what actual commitments will they make to help the achievement of the Global Biodiversity Framework's 30x30 goals, for example? Showing up will be an incredibly important demonstration of support by the private sector, but we need to see financial commitments.
The private sector needs to work together with other organisations to start getting some of this financing out quickly. It's very feasible. It's just a matter of bringing disconnected sectors together.
EF: What is next for HIFOR?
AC: We are going to continue working with a wide range of public and private sector stakeholders to move the HIFOR unit into action. We are expecting the sale of the initial HIFOR units within the next eight-to-12 months for our pilot in Nouabalé- Ndoki National Park in the Republic of Congo and we have additional pilots in the Amazon Basin under development, which is also quite exciting.
You can keep up to date on the HIFOR Initiative via our website hifor.org or following HIFOR on LinkedIn.
