Nature and Biodiversity

How can companies protect and restore forests in a global climate crisis?

A ground-up view of a forest canopy, illustrating the need for forest conservation

Companies worldwide have a responsibility to get involved in forest conservation. Image: kazuend/Unsplash

Daniel Schneiders
Director Climate Program, Bayer
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Climate and Nature

  • Global businesses operate internationally and are well placed to act on the global crises of climate change and nature loss.
  • Now, with environmental action rising ever higher up the agenda, companies are ready to financially commit to forest conservation.
  • We need jurisdictional forest conservation programmes that harness the power of every stakeholder, including businesses, to deliver climate mitigation at scale.

Faced with a global crisis, we need action from the stakeholders adept at delivering products and solutions on a global scale. National governments are used to putting their country’s interests first, but global business leaders are in a different position. It is in the corporate interest to work internationally – it is their modus operandi.

The natural world holds enormous capacity to mitigate global climate change. Worldwide, trees absorb twice as much carbon as they emit, but 6.6 million hectares of trees were lost to deforestation in 2022 alone.

We need to invest at least $460 billion every year to halt and reverse deforestation by 2030, but we currently direct a mere $2.3 billion to forests annually. This investment gap cannot be filled solely by government funds. Large corporations have the experience and the desire to channel capital into trustworthy markets. And, with environmental action rising ever higher up the agenda, companies are now ready to financially commit to forest conservation.


What’s the World Economic Forum doing about deforestation?

Corporate solutions to a global crisis

When a company invests money in forest conservation, it does not slow its decarbonization. The opposite is true - companies that use carbon credits are 1.8 times more likely to decarbonize year-over-year than non-credit purchasing companies.

What’s more, over 70% of corporations purchasing carbon credits recently reported that the voluntary carbon market helps them to scale their climate action beyond what could be achieved in the voluntary carbon market's absence. It’s voluntary, it’s additional and with half of today’s buyers admitting their credit budget would be saved if it wasn’t used for carbon credits, it can harness funding for climate and nature that would not otherwise be available.

Although forest protection projects already cover millions of hectares of land, there are moves to scale this approach further and expand to the jurisdictional level. And that’s not all. Forest conservation is about more than avoiding emissions; it also brings invaluable co-benefits to people, their communities and biodiversity. This is perhaps the best and highest use of the voluntary carbon market - to channel finance to areas that would not otherwise receive funding.

Yet, this hugely valuable tool seems to come under almost constant attack. Some of this, such as highlighting low-integrity project development, is at times justified. But to help corporates realize their sustainability ambition and close the funding gap to forests, we need to back trustworthy, ready-to-scale, mechanisms that fit snugly within current corporate approaches.

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The business case for nature

Unless we invest in conservation and restoration today, only a few companies won’t be severely impacted in ten to 15 years. This is a hard pill to swallow and may sound extreme, but resources are finite and the global economy is inextricably linked with nature. A recent study revealed that 55% of the world’s GDP is ‘exposed to material nature risk.’ Unless we protect nature now, millions, if not billions, of people will be left extremely vulnerable and economically insecure.

The business case for climate action is irrefutable. Already, 80% of companies consider it a strategic priority. Indeed, for many global corporations, especially those in the agricultural sector, there is no future without immediate, sustained climate action. This is not the time to leave the market; this is the time to build radical coalitions to scale the amount of capital available and deliver the impact required.

The power of coalition

Some private companies are already joining forces to halt and reverse deforestation. Bayer joined the LEAF Coalition because it brings together forest governments, corporate leaders, Indigenous groups and donor governments - all united in our commitment to meet 2030 deforestation targets.

Fundamentally, the LEAF Coalition wants forests to be worth more alive than dead. But it also recognizes that raising finance is only half the battle; funds must be distributed carefully to create real, lasting changes to deforestation rates. As a coalition, we understand the need to conserve forests at a jurisdictional level. Operating on a large scale is essential to avoid crossing global tipping points to which we are already dangerously close.

This is why LEAF’s approach, which encourages collaboration between corporates, Indigenous People and governments, is key. Indigenous communities have the best understanding of the local environment, governments hold the power to drive jurisdictional-level change and corporates are the most adept at navigating global financial markets.

We need coalitions. We need jurisdictional forest conservation programmes that will harness the collective power of every stakeholder to deliver climate mitigation at scale. Above all, we need business leaders to firmly back nature-based climate projects.

Why tear down the voluntary carbon market? We’d have to build something nearly identical to appeal to the corporate world. If our businesses are to exist in ten to 15 years, corporate leaders must not be dissuaded. The time has come to face off criticism and to boldly back forest protection. It’s time to act boldly. It’s time to act now.

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