How leaders can tackle forest finance in 2026

For centuries, forests were treated as either obstacles to development or resources to be cleared. Only in recent decades has their true value been fully recognized.

Forests absorb carbon dioxide (CO₂) and release oxygen, regulate the water cycle, provide a habitat for a vast array of plant and animal species, and contribute significantly to livelihoods and economic growth.

Accordingly, the conservation, restoration and stewardship of forests have featured prominently in global discussions over the past two decades. But while progress has been made, much remains to be done.

Commitments to halt deforestation by 2030 date back to 2014, when nearly 200 public, private, and civil society organizations endorsed the New York Declaration on Forests goal to halt deforestation by 2030.

At COP26, held in Glasgow in 2021, leaders from 140 nations re-committed to halt and reverse forest loss by 2030 while delivering sustained economic development. This commitment was reiterated and profiled again at COP30, held in Belém in 2025, where forests and land use change received heightened attention as part of the Action Agenda.

While policy commitments and corporate actions have intensified in recent years, finance has emerged as the decisive factor in determining whether forests are protected or lost.

The Forest Finance Roadmap, published by the Forest and Climate Leaders Partnership (FCLP) during New York Climate Week in September 2025, provided a framework for how public and private finance could work together to achieve ambitious results.

The Brazilian Presidency of COP30 then placed renewed emphasis on deforestation as a major source of CO₂ emissions, while also highlighting how forest loss undermines the capacity of remaining forests to absorb carbon already in the atmosphere.

Against this backdrop, the emergence of the Tropical Forests Forever Facility (TFFF) at COP30 represented a potential step change in forest finance. Backed by Norway’s $3 billion pledge and Germany’s €1 billion ($1.16 billion) contribution, the facility has so far mobilized $6.5 billion and has a target of securing $10 billion by the end of 2026.

If fully realized, the TFFF could significantly expand the scale and duration of financial support available to tropical countries for forest conservation, restoration and stewardship. At the same time, stopping deforestation requires investment well beyond the forest sector itself.

Momentum is building around a new agricultural production model that prioritizes the use of already degraded land, paired with a commitment to sustainable intensification. In this context, the Catalytic Capital for the Agriculture Transition (CCAT) fund made waves at COP30 with its innovative approach, mobilizing $50 million designed to attract up to $1 billion in commercial capital.

The fund aims to help Brazilian farmers restore degraded land while simultaneously enhancing agricultural productivity – demonstrating how targeted investment can turn restoration into a practical, scalable reality.

One estimate by The Nature Conservancy suggests that $2 billion in catalytic capital will be needed by 2030 to leverage $10 billion in total investment in Brazil alone, supporting the critical transition to decouple agriculture and ranching from deforestation.

Such a shift would significantly reduce pressure on forests and other natural systems – an increasingly urgent priority as the European Union Deforestation Regulation (EUDR) comes into force. By prohibiting the sale of products linked to deforestation, the EUDR is beginning to act as a critically important demand signal for deforestation- and conversion-free (DCF) commodities.

The key question, however, is whether this momentum will extend beyond climate negotiations into broader economic decision-making forums such as Davos.

As the World Economic Forum’s 2026 Annual Meeting in Davos made clear, we need to enhance commitments and, more importantly, translate good intentions into results. This is essential to continue the downward trajectory in forest loss while driving a transition in how land is managed across forest landscapes.

Achieving this will require collaboration among public agencies, private corporations, financial institutions and civil society actors.

Finally, we must put into practice the overwhelming conclusions of research that shows that forests are best managed by those who live within them.

Allocating legal rights to Indigenous groups, and the ability to defend those rights, remains one of the most successful ways of delivering on our international commitments to halt and reverse deforestation.

The World Economic Forum has recently launched the Forest Future Alliance (FFA), which works to incentivize collective action by multiple stakeholders to conserve, restore and steward the world’s forests.

The FFA enables the private sector and philanthropic organizations to undertake socially, economically and ecologically responsible action for forest landscapes – both in rural and urban areas – to advance thriving ecosystems and communities worldwide.

The costs of inaction are rising. Initiatives such as the Forest Future Alliance offer an opportunity to build on the call of action at COP30 and mobilize finance to drive action on forests for the benefit of our environment and our shared future.