WASHINGTON (Landscape News) – The private sector is increasingly urged to embrace green business models. As it happens, ventures have their own ideas on how public partners could support these investments in sustainable landscapes.
Clarifying land tenure rights, pushing for a global carbon price and helping bring externalities into the balance sheet are three asks that emerged during the third Global Landscape Forum (GLF) investment case in Washington on Wednesday.
A World Bank Group-hosted session and companies from land-based sectors discussed the challenge of investing in both productive and sustainable landscapes.
A key issue, speakers noted, are externalities. “By pricing them and giving companies a chance to green its supply chain, we can start building an asset class for landscapes,” said Vikram Widge, Global Head of Climate Finance & Policy at the International Finance Corporation (IFC).
Lead Agribusiness Specialist at the World Bank Chris Brett agreed with Widge. “It is key to bring externalities into the balance sheet,” he said. “If there was an invoice sent by nature, business models would change much faster. The public and private sectors should work closer to see what these invoices might look like.”
Another aspect flagged by panelists was land tenure rights. Juergen Voegele, senior director of Food and Agriculture Global Practice at the World Bank, noted the importance of clarifying land rights to unlock potential investments.
“What matters is that there is clarity on land ownership, whether customary or not. Otherwise, there is little you can do,” Voegele said. Especially, when it comes to attracting investment for restoration projects, which often target areas under customary land use.
Paula Guimaraes, head of Forest Certification and Conservation at The Navigator Company, corroborated his view. In Mozambique, for example, the firm works to replicate the responsible forest management model they implement in Portugal.
“We need to engage with customary land right holders to be granted access to the land and be able do our job,” Guimaraes said, and noted that setting the stage to operate a commercial plantation in such a context may take years.
One of the jobs of the Multilateral Investment Guarantee Agency (MIGA) is to lend a hand to investors facing these barriers.
“We assist private sector investors in managing risks in countries with an uncertain business climate. For example, as a result of new laws or land tenure issues,” noted Nabil Fawaz, sector manager for Agribusiness, Manufacturing and Services at MIGA.
Adopting sustainable business models may result in more expensive products, but this is not necessarily negative, agreed various panelists.
“Markets are changing. More and more large [industry] players need [sustainability] certification schemes to protect their brands,” said Bas Ruter, director of Sustainability and Lead on the Forest Protection and Sustainable Agriculture Fund at Rabobank.
Chris Brown, vice president of corporate responsibility and sustainability at Olam International, pointed out at the competitive edge of green companies. “We would love to see a global carbon price, and companies that innovate on this distinguishing themselves from others,” he said.
Brown also looked at what the private sector can do better: “we want to move from implementing [sustainability] activities to measuring impact and how we are maintaining the natural capital. This would offer such a big opportunity for competitive advantage.”
At least 7 million hectares of tropical forest landscapes are cleared and degraded each year, putting livelihoods, biodiversity, and food security at risk, exacerbating climate change, conflict and human migration.
The GLF event, also hosted by the World Bank, drew 250 delegates to discuss how to align the financial system with environmental sustainability targets and the challenge of funding the restoration of more than 2 billion hectares of degraded land worldwide, an area larger than South America. Land degradation is estimated to cost the global economy as much as $4.5 trillion a year, while economic benefits of restoration efforts are an estimated $84 billion a year.