Accelerating Finance for Forests Critical in Achieving Global Climate Targets
Sydney, Australia, 12 November 2025: The ability for governments in emerging markets and developing economies to introduce the necessary policies to provide investor certainty and derisk investment opportunities will be critical in protecting some of the world’s most valuable forests and achieving global climate targets.
A new report from Pollination, Financing for Forests: From commitment to action. Policymaking to accelerate forest finance in emerging markets & developing economies, examines the role of government policy in expanding private finance for forest conservation, restoration, and sustainable management.
The report provides a practical guide for policymakers in emerging markets and developing economies, outlining actionable steps to create an enabling environment for private investment in forests.
“Forests play a vital role in creating a planet that enables human societies to thrive, but they exist in a delicate balance that is not guaranteed,” says Veda FitzSimons at Pollination.
“With many communities in developing economies reliant on forests for income, more needs to be done to ensure the right policy settings are in place to mobilise capital to keep trees in the ground and ensure Indigenous communities proposer.”
The report comes following a recent study which suggests that forests across Southeast Asia have become a net source of carbon dioxide emissions due to clearing, fires, and peat soil drainage.
“There is a real need to enhance the role of private finance for forests, not only because public funding for forests is insufficient, but because the private sector can support and scale the solutions that create enduring economic incentives for forests beyond political and government budgetary cycles,” FitzSimons says.
Forests are vital to achieving the United Nations global climate, biodiversity, and desertification goals but despite this, forests still face severe threats and underinvestment.
Forests provide essential ecosystem services, including global climate regulation, that underpin the global economy, businesses, and communities. Estimates by PWC indicate that 55% of global GDP (equivalent to an estimated $58 trillion) is highly or moderately dependent on nature and the ecosystem services it provides.
However, high-biodiversity tropical forests continue to decline. Across much of the highly biodiverse tropics, 83 million hectares of primary forests were lost between 2001 and 2024, with losses reaching record highs in 2024. Since 1960, more than half of all tropical forests have disappeared.
The report explains there are three types of policy interventions to unlock private finance for forests:
Financing: measures that mobilize and blend public and private capital, such as green investment banks, forest funds, and sovereign debt instruments, to reduce investment risk and crowd in private finance.
Regulating: measures such as spatial planning, permitting requirements, environmental standards and building code requirements that set market conditions to prohibit key drivers of forest loss.
Incentivising: measures that realign economic signals through subsidy reform, targeted tax incentives, voluntary environmental markets, and payments for ecosystem services.
For further information and to download the report, visit: pollinationgroup.com.
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Media inquiries: Tom Godfrey – 0419 313 101 – tom.godfrey@pollinationgroup.com
