TBI members in Ghana and Indonesia studied landscape-level financial flows to understand how they can better contribute to livelihood and environmental objectives. In Indonesia, the study had an additional and unexpected positive effect.
Achieving sustainable landscape management requires that farmers and small and medium-sized enterprises have access to finance that they can invest in sustainable land-use practices. To help with this, financial institutions, private companies, NGOs and government organizations are increasingly showing interest in developing innovative landscape-specific financing models. However, developing such a model requires a profound understanding of how finances currently flow within the landscape.
This realization prompted TBI and EcoAgriculture Partners to develop an integrated method for a landscape assessment of financial flows (LAFF) in 2019. The method can be used to assess which financial flows have the potential to contribute to sustainable landscape management, and which ones have a negative effect on sustainability. Since the manual was published, the method has been attracting attention from researchers and practitioners around the globe, and the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) has heralded it as a critical innovation.
TBI members in Ghana and Indonesia implemented the LAFF method in their focus landscapes. Landscape-level multi-stakeholder platforms then used the results to develop priority climate-action plans. Moreover, the assessments formed the basis for follow-up studies that focused on the financial flows that stakeholders saw as particularly promising. In Ghana, the follow-up study focused on the Partnership for Productivity Protection and Resilience in Cocoa Landscapes (3PRCL). Led by a private company (Touton), the partnership finances the efforts of civil society organizations and farmers’ associations to support sustainable cocoa production, with potential to reach around 60,000 people.
In Indonesia, the follow-up study focused on the Semandang Jaya credit union, which serves around 50,000 clients in West and Central Kalimantan. The credit union was chosen because the LAFF study showed that it was the only financial entity that was able to reach smallholders and small and medium-sized enterprises in the landscape. In the second half of 2020, the staff of Tropenbos Indonesia and the credit union’s management team met many times. Although the formal purpose was to gather data for the study, these meetings often turned into wide-ranging discussions, during which researchers and the credit union’s management team could freely exchange ideas.
Many of the discussions focused on environmental, social and governance (ESG) criteria, which inspired the management team to take action. By the end of 2020, the team members had developed a proposal for the formal adoption of ESG criteria. Soon after, the proposal was accepted and integrated into the credit policy. The new policy will prevent the credit union from providing loans to businesses that are associated with illegal practices in mining, logging and fishing, or to businesses that cause forest destruction. Thus, the informal exchange of ideas between researchers and other stakeholders inspired and informed immediate positive changes, which directly contribute to more sustainable practices in the landscape.
This article is part of the TBI Annual review 2020,
due for release in May 2021
Top banner photo: cocoa farmers in Juabeso-Bia landscape, Ghana. Photo: Abena Woode / Nature and Development Foundation