Guest post by: Lucy Almond, Director and Chair, Nature4Climate
After decades of debate, we finally have the tools to finance tropical forest protection at scale. As COP31 approaches, the question is whether enough companies will step forward to help deploy one of the world’s most powerful climate emergency brakes.
I have a confession to make. As a teenager in the 1980s, I was mildly irritated by Sting. Not because of his music, but because every television appearance and magazine interview seemed to come back to saving the Amazon rainforest.
But looking back at it now, what’s remarkable is not that people were talking about tropical deforestation then, but that four decades later, we’re still talking about it. Despite countless commitments and campaigns over the years, millions of hectares of forest continue to disappear every year.
But, perhaps, this time will be different. Last week’s UN Emissions Gap Report delivered a stark warning: the world is now set to exceed 1.5°C of warming. The question is no longer how we avoid crossing dangerous thresholds. Increasingly, it is how we minimise the damage and buy ourselves time while the larger energy transition continues.
That means deploying every credible climate ‘emergency brake’ available, alongside the deep decarbonisation of our economies. And if we want to get specific, two actions stand out as immediate priorities. Cutting methane and other short-lived climate “super” pollutants can deliver rapid benefits. And so can stopping tropical deforestation, which prevents enormous quantities of carbon from entering the atmosphere. Neither of these approaches is waiting for a technological breakthrough. They depend largely on scaling solutions we already know how to implement.
When it comes to the latter, the extraordinary good fortune is that, just as the need becomes most urgent, the systems needed to finance forest protection at scale are finally coming of age.
We already know that government-led action is key to reducing deforestation at scale. Brazil demonstrated this in the 2000s and again more recently, while Indonesia has achieved significant progress through stronger governance and forest protections. These experiences show what political commitment, enforcement and sustained investment can achieve.
The challenge has always been creating the economic incentives to maintain that progress over time. We of course are all bolstered by the recent election results in Brazil, and also by the steady progress being made by the Tropical Forest Forever Fund. But I am actually talking about jurisdictional REDD+, or JREDD+. Unlike individual forest carbon projects, JREDD+ operates across entire countries, states or provinces. It creates a mechanism for rewarding governments and communities for independently verified reductions in forest emissions, generating carbon credits that companies and other buyers can purchase.
The concept is straightforward, but its development has been anything but.
Over two decades, governments, Indigenous Peoples, local communities, scientists and standards bodies have worked to develop the monitoring systems, safeguards, verification processes and benefit-sharing arrangements needed to make these investments credible. There have been delays, disagreements and legitimate questions along the way. But these years of scrutiny have produced increasingly robust systems capable of directing substantial private finance towards forest protection.
Now, programmes are moving from preparation to delivery. Guyana has demonstrated the potential for large-scale transactions. Costa Rica has issued credits recognising forest restoration, while Argentina’s Misiones province has secured approval for its jurisdictional forest carbon programme. Ghana is also advancing towards issuance. Across the tropics, more jurisdictions are preparing to follow.
After decades of building supply, the defining challenge for this emergency brake solution is now demand.
Early corporate leaders have played an indispensable role. Through initiatives like the LEAF Coalition, which sent a $1-billion demand signal back in 2021, a small group of companies helped bolster this system at a critical time. But these pioneers alone cannot deliver the scale of finance needed to make a meaningful dent in tropical deforestation. That requires a much broader base of corporate buyers.
From a climate perspective, the case is compelling. Few investments offer the potential to support a global climate emergency brake, while also protecting biodiversity, supporting livelihoods and strengthening local economies.
And I wish that argument alone were sufficient. But the reality is that businesses face genuine barriers to investing in climate action beyond their own value chains.
First, companies need a stronger business case for these investments. That means demonstrating not only their climate impact, but also clarifying how carbon credits contribute to corporate climate commitments, how companies can be appropriately recognized for their climate investments, and how reputational and legal risk can be managed.
Second, businesses need greater clarity and consistency. Today, overlapping standards, voluntary guidance and regulatory approaches create uncertainty about how companies can responsibly use carbon credits and communicate their investments.
Third, policymakers must ensure emerging rules do not inadvertently exclude some of our most valuable climate tools. Debates in Europe and under Article 6.4 of the Paris Agreement could have far-reaching consequences for nature-based credits. Frameworks must recognise the complementary roles of both emissions reductions, including avoided deforestation, and carbon removals, rather than prematurely closing the door on either.
These are challenges that governments, standards bodies and the environmental community must work together to resolve, without compromising environmental integrity. And if we can deliver clearer rules, stronger incentives and greater confidence, businesses must be prepared to respond.
Corporate climate strategies should not end at the boundaries of a company’s operations and supply chain. Alongside ambitious internal decarbonisation, investing in high-integrity jurisdictional forest protection should become a mainstream component of corporate climate action.
COP31 offers an opportunity to accelerate that transition.
We have spent decades asking whether tropical forests could be protected through credible, large-scale climate finance. We are finally beginning to demonstrate that they can. The question now is whether enough companies will step forward to make that promise a reality.
After forty years, I finally understand why Sting kept talking about the rainforest. What I struggle to understand is why, with so much more at stake and the tools now within reach, we are still hesitating to act.
