 Welcome to this issue briefing, which we look at how companies, governments, jurisdictions and local communities can scale up forest conservation. My name is Nicole Schwab. I'm the co-director of Nature-Based Solutions at the World Economic Forum, and I will be moderating today's session. There is no tackling climate change without forests. Deforestation alone is responsible for nearly 15 percent of global CO2 emissions. Conversely, natural climate solutions, which include forest conservation and restoration, can provide one-third of the mitigation needed to limit global warming to 1.5 degrees. Last year's climate conference in Glasgow, COP26, was a step in the right direction for forests. 141 countries joined the Leaders' Declaration on Forests, the LEAF Coalition announced their first $1 billion investment commitment for forest countries, and the 12 largest traders and processors committed to a roadmap to achieve 1.5 degrees, enabling further progress in eliminating commodity-driven deforestation. At the same time, we are witnessing a major expansion in the voluntary carbon markets. Transactions reached over 300 million tons last year, valued at over $1 billion. The market demand is expected to continue growing at least tenfold over this decade, with forestry credits contributing to at least half of the transactions as more high integrity and large-scale or jurisdictional projects emerge steadily. And that's what we want to talk about today. Jurisdictional approaches to REDD+, which stands for reducing emissions from deforestation and forest degradation, and how such landscape approaches can offer the potential to convene diverse stakeholders around common environmental, social and economic goals, unlock funding at scale through results-based payments, such as carbon credits, and enable co-benefits for the local communities maintaining the forests. The World Economic Forum is launching a new white paper on the subject of jurisdictional REDD+, next week, called The Forests for Climate, Scaling up Forest Conservation to Reach Net Zero. And I now have the pleasure to introduce our panel, who will share their views on the way forward with Jurisdictional REDD+, Integrity, Scale, and Opportunities for Private Sector Investment. Joining me today are Frances Seymour, Distinguished Senior Fellow at the World Resources Institute, Erin Blumgarden, the CEO of Emergent and the LEAF Coalition, Fernanda Sampaio, Executive Director of PCI Institutes, and Jamie Mulligan, Senior Scientist at Amazon. Thank you for joining us. And let me turn to you first, Frances. Can you tell us a little bit about jurisdictional approaches and how these have been evolving towards high integrity solutions? Well, thanks, Nicole, and thanks so much to the Web for hosting this session on such an important topic. You know, we made an enormous amount of progress in evolving REDD+, when we first started talking about it 15 years ago. Forest carbon credits were exclusively being produced at the project scale. And while project scale interventions will certainly continue to be needed to address deforestation and promote restoration, there's been a growing realization that standalone projects can't in and of themselves address the underlying drivers of deforestation and certainly not at the required scale. It's clear that we have to incentivize governments to do what only governments can do, such as enforce the law, since so much of forest loss is actually illegal. And crediting forest carbon at the scale of large jurisdictions really helps to manage many of the risks to environmental integrity in the REDD+, space. For example, assessing forest cover loss over a large-scale jurisdiction automatically addresses many different kinds of market-shifting leakage, in other words, just displacing deforestation from one spot to another. And truing up the accounting at jurisdictional scale also helps us manage the risk of over-crediting of project-scale interventions due to inflated baselines. And the good news is that since the Bali Conference of the Parties of the UNFCCC in 2007, forest countries have made an enormous amount of progress towards their ability to produce market-ready jurisdictional-scale credits. The technology of measuring forest emissions has continued to improve, has had the ability of forest countries to use that information to target and address what's causing forest loss. We've also got improved methods to manage risks to environmental and social integrity, not least the acceptance of norms such as free prior and informed consent, and a recognition that we need not think about social integrity as just a do-no-harm agenda, but actually enlisting Indigenous peoples and local communities as full partners in forest conservation who are entitled to a fair share of the benefits. And all of this learning is now embedded in the latest generation of standards, such as art trees, which we can talk about later, that enable the independent verification of adherence to those standards and produce market-ready jurisdictional-scale credits. Thank you, Frances. And if we move now a little bit to the investment side of this, you've been observing the space for a long time, and what trends do you see in terms of the forest-related investments? Well, let me talk about two different kinds of forest-related investments. I mean, I'm not going to talk about the need to invest, companies to invest in getting deforestation out of their own supply chains. I think that goes without saying. But I think one of the key points that I'd like to get across today is about the power of advanced demand signal and advanced purchase commitments for jurisdictional-scale credits. Because for much of the history of Red Plus, this kind of ex-post payment as a form of investment in forest conservation has been provided through donor agencies out of development assistance funds. And in these programs, the price was usually fixed and, frankly, low in the perspective of the seller countries, and non-negotiable. But the standards were somewhat flexible, as we were learning by doing. And pledges from those donor sources typically averaged about a billion dollars a year. And payments were often slow to follow. But we're now at a moment of transition to market-based finance that's going to be enabled by this boom that we've seen is in demand from a voluntary market over the last 18 months, which, as you mentioned, is a lot of that is composed of nature-based solutions, and particularly forest carbon credits. In my role as the chair of the board of the Architecture for Red Plus Transactions, I participated in the process of developing a new standard called Trees for Jurisdictional Scale Red Plus Crediting. And it builds on all this body of experience from the bilateral and multilateral agreements that have been financed by donor funds. But it's designed to facilitate more business-like transactions with clear prescriptive methodologies so that the standard is non-negotiable, but the price can be flexible. And we're hopeful that this application of this kind of standard and independent verification can really build confidence in the market that can lead to a rapid buildup of demand for these credits that I think Erin will speak to. For now, companies can enter into forward purchase agreements for these kinds of credits. And when they do so, that provides a real incentive for governments to do what is often really politically difficult work of challenging the forces behind deforestation, as usual, and can also incentivize them to engage more effectively with Indigenous and local communities to recognize their rights and roles of leaders on the front lines of forest conservation. The second type of forest-related investment is the kind of upfront finance that's needed to actually produce these high-quality credits. Some of these are costs and actually investing in doing things in the landscape to produce emission reductions and removals. But others are the kinds of investments that are still needed in what we used to call Red Plus Readiness in terms of developing capacity to engage in best practices for social integrity. And I think companies have a role to play in investing in those kinds of processes. But may need to channel their funds through independent third parties to manage the potential conflict of interest between their role in providing that support and their role as buyers of the resulting credits. And the good news is some new funds are being set up as we speak to serve exactly that function. Thank you, Frances. So let me turn to you, Erin, and let's also zoom out a little bit with my first question, which is really about how can carbon finance towards forests help mitigate climate change? Yeah. Thanks, Nicole. And also, before I start, let me thank the forum for hosting this and excited for the light paper. So the question is, how does carbon finance or how can carbon finance help mitigate that climate change? So in my view, really the highest and best use of carbon finance is to solve big global challenges, right? And to do that, we need to address these challenges in a coordinated way that really moved the needle on a climate wedge. And to do that, again, in my view, I think we need collective action to incentivize more capital flowing to change incentives on the ground to make nature worth more alive and dead, as we sometimes like to say. So to do this at scale, I think we need mechanisms, again, for collective action. There is not one NGO, there's not one company, there's not even a government that can do this alone. So we need a collective action response to get to the scale, to align public and private resources and get them moving in the same direction, and only then can we actually move the needle on mitigation in a meaningful timeframe. We know we're in a climate emergency, we're in an extinction crisis, time is of the essence. We need to move far and we need to move fast. As you said initially, we know there is really no plausible pathway to the Paris Agreement temperature targets that does not involve protecting nature, and in particular, ending tropical deforestation within the next decade. We can do all the other things to decarbonize the economy, but we don't reverse deforestation. A 1.5 degree future really is not in the cards. So protecting nature is urgent, effective, and essential, not only for climate mitigation, but also for all the other co-benefits that intact ecosystems provide for local communities and the planet. And there is also a well-established scientific consensus that the urgent priority is really protecting tropical forests, even above planting new trees, which is also important, but we really need to protect the forests that we have right now because the world loses tropical forests at the rate of about 13.7 million hectares per year, equivalent to about a central park. They are the size of central park every 18 minutes. So carbon finance can provide an important mechanism for companies to compensate for the emissions outside their operations and their value change as they work towards net zero. If all companies with science-based targets compensate even a portion of scope 1 to 3 emissions, they can aggregate, generate billions of dollars of financing for forest protection. So investment in high-quality, gestational red emission reduction credits represents, we think, one priority source of low-cost, high-integrity emission reduction credits. We think we need a billion tons per year in climate finance to protect the wild forests. We've been part of an initiative that's called for this, called the Green Digitone Challenge, and we think jurisdictional-scale action is really the way to do this. Thank you. And you're talking about collective action. So my next question is around LEAF and the LEAF coalition. Can you tell us a little bit more about how that came about and what has been achieved so far? Sure. So LEAF, which stands for Lowering Emissions by Accelerating Forest Finance, is a collective action platform, bringing together public and private actors. It was launched last year, per day, at President Biden's White House Leader Summit on climate, with founding participants, including three governments, Norway, UK, US, and nine leading companies, including Amazon, Bayer, Unilever, and others. And the goal of LEAF is to bring together public and private sector really to provide this collective action to reverse tropical deforestation at massive scale. It's, as far as we know, the world's largest public-private coalition focused on ending tropical deforestation. And what we intend to do is unlock and provide predictable, long-term results-based finance for tropical forest countries to provide them with the incentive, the financial incentive, which hopefully translates to political will, to increase ambition to protect their forests. So in terms of progress at COP26 last year in Glasgow, we announced that we had achieved our initial goal of raising a billion dollars in funding commitments from a combination of governments and now over 20 corporate participants. And I want to make just one key point. So in order to participate, companies must meet strict integrity criteria. And I think this was one of the really important things about LEAF. The carbon market has asked the supplier to meet high integrity criteria with third-party standards for a long time. What we need to do also is ensure that buyers are also meeting integrity criteria to ensure that the emission reduction credits are used just to cover residual emissions and that these companies are doing all they can do to meet within their own operations to meet bear net zero targets. So in terms of achievements to date, we now, the coalition now includes 25 corporate participants, we're engaging with additional sovereign donors beyond the UK, US and Norway and looking to bring on additional countries. In our first call for proposals from forest jurisdictions, we received 23 eligible proposals that we're working through right now. We've signed on the supply side, we've signed letters of intent with five countries, Costa Rica, Ecuador, Ghana, Nepal and Vietnam. And we've signed MOUs, Memo's of Understanding with the Interstate Consortium for the Legal Amazon representing eight Brazilian states, also Mexican states of the Alisco, Quintana Roo in the province of Trafa and also four other countries. And we're just beginning, right? We know this is just beginning a billion dollars. Of course, there's a lot of funding in voluntary carbon markets. But again, as I said, we think we need a gigaton per year, which would be 10 billion a year. So we're just beginning and we invite a partnership and participation from other companies, other governments and individuals. Thank you very much, Aaron. Very exciting to see this progress in such a short time. So let's now turn to the corporate perspective. And let me turn to you, Jamie, as part also of the Leave Coalition. Can you tell us more about Amazon's journey towards net zero? Yeah, happy to. Nice to be here. Well, Amazon's first priority, of course, is to drive down our own emissions within our value chain. And that's a difficult task, but we're making real progress in a number of areas. I'll share with you quickly. The Amazon has been for a number of years now the world's largest corporate buyer of new energy. We've ordered 100,000 electric delivery vans and are innovating in areas like bike and foot deliveries. We've already cut packaging waste per shipment by more than a third. And we're innovating in material science to create new low carbon packaging materials that we're putting low carbon concrete into our buildings. We're buying sustainable aviation fuel. We're investing now in green hydrogen and the list goes on. But these investments take time to play out. And even when they do, they won't completely zero out all emissions. So that's the basis for engaging in climate mitigation outside of our value chain. And if we're going to invest real money outside of our value chain, we wanted to start with the biggest and most urgent gaps to the Paris targets and mountain effort that we think could actually make a difference at a global scale. So with that in mind, Amazon worked together with the governments of Norway, United Kingdom, United States, and alongside our friends at urgent and Aaron here to co-found the leaf coalition. And we're joined now by by dozens of other companies, but we're also making and looking ahead to long term investments in carbon levels. But over the course of the next decade, there's really no, no better place and more urgent place for us to put our investment in reducing deforestation. Thank you. And from this, this from your perspective and what you've seen in terms of encouraging more companies to to join, what needs to change or what needs to improve in the carbon finance system? If we are to reach the type of scale that Aaron was talking about, talking about in terms of getting more companies to invest in forest related climate strategies. Yeah, I mean, an objective is scale. But in order to get scale, we need scale. We need a carbon market that has scale. There are a lot of buyers that think they're sitting on the sidelines because because the market's not big enough to accommodate them. So we need scale and we need trust. And right now the carbon market we have neither, frankly. But if you're a big business and you're implementing an ambitious decarbonization plan, it should be straightforward for you to also compensate for your emissions while that plan plays out to buy the number of carbon credits that you need to do so and to have confidence that those credits represent what they claim to and to know that your stakeholders can trust that as well. So today, big companies can't do this and it's a major impediment to climate finance. And that was an impetus for a leaf. Everyone who helped to build the leaf coalition will tell you the reason they did it was to save the rainforest and that's true. But it's also geared in part to address the scale problem in the carbon market and in part to address the trust problem. The leaf alone could be larger than the entire voluntary carbon market is today by multiple. And the crediting approach in the core protocol we're using in leaf is pioneering relative to how the market operates today. The credits are only issued for actual full reductions in deforestation rates over time. Wall to wall across entire large jurisdictions. It's it's a it is a change in the game. It's almost a different currency, frankly. And I'll just add if I may and echo some of Francis's up front points. There are lots of advantages to the jurisdictional approach. But what resonates most clearly to me is the theory of change. And that's ultimately why I'm here is to create change. The science says we have to halt deforestation within the decade. Well, there's no end game on deforestation without effective government policy. You know, the project based red has been doing very important work in in places all over the world for many years and needs to continue to do so. But no matter how many NGOs we send into the forest, we still need legal protections for the forest. We need enforcement of those legal protections. We need recognition of indigenous rights. We need better natural resource planning. All of those are public sector mechanisms. And so if you want more than incremental change, you have to support action by governments. The governments in these regions tend to be low capacity. So if you want them to act and in an enduring way, we need to bring capital. We need to bring a lot of capital. And that's why we helped go found the least coalition. Thank you, Jamie. So talking about policy, let's turn down to Fernando and hear a little bit from the perspective of a forest country. So Fernando, what do you see happening in your jurisdiction that makes Jay Redd an attractive investment? And Nicole, well, thanks for the invitation to be here. So the first thing it's about the scale that everyone is talking about. Look at the state of Mato Grosso. It's the largest commodity producing state in Brazil. It's about the size of Germany and France together. But we still have 60 percent of our territory in forests. So there's a lot of space to produce more, but also to conserve this environmental assets that we have. But I think we see the carbon finance as a way to make this transition on the landscape to a sustainable development and low carbon development that we want. So the second thing is about ambition. We need to create the flow of investments to the landscapes and jurisdiction that are trying to do the right thing. And how do we know that they are trying to do the right thing? So we have the political will. And in spite of everything that we hear about Brazil, there's a lot of will at the subnational level. Mato Grosso is committed to net zero in 2035. The produced concern includes strategy that I represent. It has a wide set of targets for sustainable production, for forest conservation, restoration and inclusion of small holders and indigenous communities. We have this governance that puts together the government, the civil society, the producers and the private sector around these targets and the net zero commitments. So it's also about residents. We have the governance. Mato Grosso has since 2013 a red plus regulation. We already have the radio removers program that is financed by Germany and co-financed by the United Kingdom work in Mato Grosso. We have the benefit sharing. We consulted all the indigenous people in the state to define priority for this kind of investment. And we really see the carbon as the game changer, you know, creating value for the standing forest. This is what we need to achieve all these targets of net zero and sustainable development. So, yeah, there's not only commitment and speeches, but also has taken a lot of action, especially on the deforestation. We have today the best monitoring system and deforestation control enforcement in among all the legal Amazon states in Brazil. So there's a lot of effort being done and we need the kind of incentive that's coming from carbon finance to continue the work that we are trying to do. Thank you, Fernando. And you mentioned the consultation with indigenous communities. Can you say a little bit more about that and about how this approach can help to support sustainable livelihoods for local communities and indigenous peoples? Yeah, if we look at the state of Montgrosso and we see where this population of traditional communities, the smallholders and indigenous people are concentrated, we still have a lot of forests there. We still have all these environmental assets, but these are also the regions inside Montgrosso with the most vulnerable social and economic conditions. And that's where I believe that the carbon finance is the game changer, because we need to bring value and make sure that the low carbon development is not a combination to poverty. We have already working with the Rider-Lewis program. Look at the largest consultation process of indigenous ethnic groups in Montgrosso. We have 43 different indigenous people in Montgrosso in 75 territories, and they all participated in the definition of their priorities, what they need as investments. As we speak now, we are starting a three-day dialogue with indigenous people in Montgrosso to talk about arteries and emergent and leaf coalition. We are trying to bring this opportunity to support their territories, the supply chains that they are involved with, and to really boost a forest-based economy on those regions that can support the livelihoods of these people and contribute to the state's sustainable development. Thank you very much, Fernando. We have a couple of minutes left, so in closing, maybe Frances and Erin, I want to ask you, because J-RED, it's quite complex for a lot of people. They're trying to make sense of it. If you had one key takeaway message for a corporate watching us today, learning, thinking about how to invest in this, what would be your 32nd key takeaway to a corporate audience? Maybe Frances turning to you first. I think I would just echo Jamie's point that tropical deforestation is the key urgent priority for climate mitigation overall, not just because of the role of forests in the global carbon cycle, but because of all of the local sustainable development benefits, as well as science showing that actually the global cooling effect of tropical forests is much more than just that generated through the carbon cycle. So for all kinds of reasons, we really need to incentivize protection of those forests. And the best way we know to do that is to move forward with crediting for carbon at jurisdictional scale to provide the governments of those jurisdictions with the value proposition they need in dealing with their domestic political economies to do the hard work of challenging the drivers of forest loss that are currently leading to the large rate of losses that we're seeing today. The only thing I would add is a lot of corporates have been involved in, if they've been involved in carbon markets or carbon finance, they've probably been involved in projects. And I think there have been some very good projects and some projects I think, as Jamie said, projects have done some very good things on landscapes. But we're at a critical turning point in the fight against climate change and deforestation, frankly. And it's very hard to envision how we get to the scale and speed that we need with lots of little projects. So the only way to do that, in my view, is through a jurisdictional approach. We've got to move far and fast. And so if a corporate is interested in actually really joining an effort to help solve the global challenge, there's really no other solution than to move towards a jurisdictional approach. It's really about scale and speed and impact. Thank you very much. So I'd like to thank you all for your contributions and a very interesting panel discussion. And I'd also like to thank our viewers who tuned in today to listen to this session and finally, in closing, if you're watching us today and you want to give your feedback, there's a QR code that's gonna appear shortly. You can scan the QR code and answer the questions. And so thank you all. Stay tuned for the release of our report next week and have a good rest of your day. Bye-bye. Thank you.