The Science Based Targets Initiative (SBTI) is best-known for creating guidance — informed by climate science — that helps drive ambitious action in the private sector by defining and promoting best practices for corporate emission reductions. The SBTI rules apply primarliy to greenhouse gas emissions directly associated with the products and services that a corporation provides to its customers or clients. On Wednesday, February 28, SBTI released its long-awaited report on “Beyond Value Chain Mitigation (BVCM),” outlining how the private sector should contribute to climate change mitigation that is not directly associated with its particular products and services.

Above and Beyond: An SBTI Report on the Design and Implementation of Beyond Value Chain Mitigation (BVCM) is launching in a context of burgeoning public and private sector interest in “contributory” climate- and nature-positive finance (vs. “compensatory” offsets). This shift represents growing recognition that ecosystem services, especially climate regulation and biodiversity conservation, underpin our economies although no one is paying for them. Hence, we are “free riders” on nature — even as pressures on ecosystem services, including from climate change itself, threaten our life support systems.

Recognition that corporations ought to concern themselves with BVCM is a major development, insofar as it acknowledges the economy-wide material risks that climate change presents to corporate success. Among the areas that SBTI’s BVCM report highlights as critical for corporate funding are:

Payment-for-ecosystem-services (PES) projects/programs that work to protect natural ecosystems; and
Activities that protect the sink function of intact forests and other natural ecosystems.

WCS’s pilot HIFOR project in the Republic of Congo is located in Nouabalé-Ndoki National Park. Photo credit: Emilio Vilanova ©WCS.

Intact or “high integrity” tropical forests are the highest biodiversity ecosystems on the planet and provide critical natural climate infrastructure that has helped to keep the planet much cooler than it would otherwise be, even as the climate crisis has worsened. Based on available data, we estimate that high integrity tropical forests absorbed at least 139 billion tons of CO2 (net) from the atmosphere between 1980–2020 and could absorb at least an additional 28 billion tons of CO2 (net) between 2020–2040. The climate-positive impacts of these forests are enhanced by their biophysical cooling characteristics, which enhance their overall cooling impact by an estimated 50–100%.

However, these forests and the services they provide are under threat. High integrity tropical forests have declined by over 12% since 2000, with associated losses of billions of tons of their carbon stocks. By incentivizing the protection of intact, high integrity tropical forests and their ecosystem services, corporate funding aligned with the SBTI BVCM report could help catalyze a major advance in nature protection in which private sector actors no longer behave as free-riders on the ecosystem services that they depend on. At WCS, our high integrity forest (HIFOR) investment initiative is designed explicitly for this purpose, while recognizing and compensating IP and LC stewardship of these forests.

The WCS HIFOR Initiative aims to create a new (non-offset) asset class to incentivize protection of high integrity tropical forests and the ecosystem services they provide, prioritizing climate regulation and biodiversity conservation. One HIFOR unit represents a hectare of tropical forest with high ecological integrity, located within a large well-conserved landscape. HIFOR units are nature- and climate-positive and may be associated with contributory claims (but not compensatory “offsets”) that purchasers of the units can make. HIFOR areas also embed social and cultural values, particularly as many of them are home to Indigenous cultures.

Working with governments and local communities, we are developing pilots for existing Sustainable Development Reserves in Amazonas, Brazil, and a National Park in Republic of Congo. We are co-developing HIFOR revenue distribution models with government and community stakeholders, with the shared intent that most funds will support community members and community-level interventions in ways that contribute to livelihood improvements while maintaining ecosystem services. HIFOR financing is intended to promote innovative development trajectories that are rooted in forest conservation and sustainable resource management, rather than the exploitation of natural capital through deforestation and forest degradation.
The launch of SBTI’s BVCM report contributes to the growing evidence that lived experience of the climate crisis, in particular, is forcing business and government leaders to recognize that a “free rider” relationship between human economies and nature is no longer tenable. Even more, the SBTI BVCM report itself points toward important opportunities for corporations to move away from that dysfunctional relationship and own their responsibility for mitigating the risks that the climate crisis poses to the global economy.

Daniel Zarin is Executive Director for Forests & Climate Change at WCS (Wildlife Conservation Society) and a member of the Technical Advisory Group of the Science Based Targets Initiative (SBTI) and the Expert Advisory Group for SBTI’s Beyond Value Chain Mitigation Guidance.

HIFOR is an innovative finance mechanism to scale up investment for the conservation of high integrity tropical forests

These large areas of intact tropical forests provide climate, biodiversity, and socio-economic benefits and are critical for a healthy planet. But our global economies do not pay for those benefits, valuing instead the products of their destruction. HIFOR provides a step away from a world in which global economic systems are a “free-rider” on the services that nature provides – a step toward a world in which our economies pay to maintain essential natural infrastructure we all depend on, beginning with the most complex ecosystems on Earth.

 

HIFOR units represent one hectare of well maintained, high integrity tropical forest located within a large well-conserved landscape. Investments in HIFOR directly support tropical forest conservation and help maintain the critical biodiversity and ecosystem services that they provide.

 

A single investment, with multiple benefits:

• Claims: Purchasers of HIFOR units can make claims related to land conservation, climate, biodiversity, wildlife populations, and socio-economics.
• Long-term investment: HIFOR is an investment, not an offset. Maintaining high integrity areas is the cost efficient form of conservation.
• Climate and biodiversity derisking: Improves outcomes across the whole investment portfolio by accounting for systemic risk (climate regulation and nature loss). Between 35% and 54% of assets held by financial institutions are highly or very highly dependent on ecosystem services supported by biodiversity.
• Geographically diversified: Reduces the risk of natural capital investment portfolio from natural disasters through a geographically diversified portfolio. The HIFOR portfolio spans the geographic range where high integrity forests are found.
• No greenwashing: Maintenance of high integrity tropical forests can be demonstrated through easily accessible metrics. HIFOR claims rest on the idea of a global contribution, not a corporate offset.