Commercial Conservation:Innovative Financing Mechanism for Conservation of Forests

Agus P. SariCEO, Sustainable Conservation

Deforestation

Forests are among the world's largest carbon sinks. By cutting down a forest, carbon is released that contributes to climate change.

Conserving forests is the cheapest and simplest way to mitigate climate change.

Globally, around 13 million hectares of forests are converted to other land uses or lost through natural causes each year between 2000-2010.

In the 1990s, Brazil and Indonesia had the highest loss of forests.

Source: FAO, Global Forest Resources Assessment 2010

EcologicalGoal

CSRGoal

FinancialGoal

CARBON MARKETCompliance Inexistent Low price & Volatile

INVESTORS

COMMODITYMARKET

FINANCIALMARKET

Conservation & Buffer Zone

Commercial Zone

NGO

INVESTMENTACTIVITIES

managed by Fund Manager

DONOR

INVESTOR

Return Investment

1

2

ENDOWMENT/TRUST FUND

Conservation & Buffer Zone

PrivateInvestors

ConservationFUND

PrivateInvestors

ConservationFUND

Commercial Diagram

High credibility for Corporate Social Responsibility

Conservation Units

Carbon content in the conservation area, measured in CO2 equivalents

Carbon stocks, not flows

Valued at US$0.25 per ton per year

Immediately retired on sale (no secondary market)

No offset of emissions elsewhere

LEGALCOMPLIANCE1

MANAGEMENT PLANNING & PROCEDURES

2

ENVIRONMENTAL RESPONSIBILITIES3

SOCIAL RESPONSIBILITIE

S4

MONITORING & REPORTING5

ENVIRONMENTAL SERVICES

CALCULATION6

Principles & Criteria

Benefits To The Corporate Community

Sustainable Investmentpays back with reasonable return

Sustainable Regional Developmentnot donor driven / dependent

Sustainable Forest Conservation

Lasting “Green” Image

CSR collaboration that is teaching to fish, not giving a fish