Reducing Poverty and Increasing Employment: Poverty and unemployment threaten local economies and communities in both developing and developed countries (1). Providing access to markets, credit, and technical skills and upholding secure property rights (also known as tenure) can help grow local economies and improve the livelihoods of local communities through sustainable forest-based activities (2).
Conserving Ecosystem Services: Investing in sustainable forestry practices can also help to ensure that communities continue to benefit from the ecosystem services that forests provide, including food, shelter, watershed protection, and species habitat, as well as the preservation of cultural forest-related values for current and future generations.
Focusing on Communities: Some of the many opportunities to support communities are highlighted here.
Poverty and Economic Inequalities: Rural poverty is an acute global challenge; more than 46% of the worldwide rural population is poor, compared to around 16% of the urban population (1).
Low-income people, especially in developing countries, rely substantially on local forests and forest resources. In fact, forests provide 1.6 billion people—around 20% of the global population—with food, water, fuel, medicine, a forum for culture, and livelihoods (5). Yet forests around the world are disappearing quickly, with tree cover loss rising over the past 17 years (6).
Rural Communities: Around 40% of the global rural population living on less than USD 1.25 per day (or approximately 250 million people) live in or around tropical forest and savannah, and depend on forest resources for their livelihoods (7).
Youth: Youth, defined by the United Nations as people aged 15 to 24, continue to have high rates of unemployment, with a fifth of all young people in 2018 not in employment, education, or training (8). Unemployment is a key driver of youth migration, as many young people leave rural areas for new urban employment (9).
Women: Women are heavily involved in less visible and less valued tasks around forestry and land use, such as harvesting fuelwood and non-wood forest products or managing smaller agroforestry enterprises. For example, in the East African highlands, a community’s women plant fodder shrubs for its livestock (10), and, especially in Africa, women collect most household fuelwood, which requires significant physical effort and time (11). Formalizing women’s work in the forestry sector and offering new opportunities to contribute to the commercial forest-based value chain can contribute to gender equality and help to reduce poverty (12).
Indigenous Peoples: Indigenous Peoples comprise 5% of the global population yet 15% and 33% of the extremely poor and rural poor, respectively (13). Indigenous people and local communities are also the most effective stewards of dense forests and are either own or control 18% of global land (14).
Forests: The actions of local communities can reduce deforestation. In Bolivia, Brazil, and Columbia, tenure-secure indigenous forest areas had lower deforestation rates between 2000 and 2012 (15).
Investments in sustainable forestry help to improve local economies and communities in both developed and emerging markets.
Partnering with Communities: Thirty million people benefit from private forest ownership around the world, with Africa and Europe home to the largest number of forest owners (8.2 million and 7.2 million, respectively) (3). In Latin America, communities legally manage a third of total forest area across the continent and 50% or more in Colombia, Ecuador, Mexico, Nicaragua, and Venezuela (2). Commercial smallholder forestry is a more mature industry in Europe and North America (2).
Providing Forest-Based Resources or Alternatives for Locals: In 13 sub-Saharan African countries, as well as in Bhutan and the Lao People’s Democratic Republic, fuelwood generates 90% or more of all energy used. Moreover, 20% of the population in Africa (and 15% in Asia and Oceania) is involved in producing fuelwood and charcoal. Regarding wood used for home construction, one billion people in Asia and Oceania rely on forest products as the main materials for their walls, roofs, and floors (3).
Hiring Local: Sub-Saharan Africa and Southern Asia—two regions already experiencing considerable poverty and labor vulnerability—will host 38% of the global labor force by 2030 (16). Regarding employment in the formal forestry sector, Asia and Oceania account for half of the global total, while Europe has the highest proportion of its workforce in the formal forestry sector (3).
Local communities that depend on forests are often the most impacted by changes to the land. They can also be some of the most effective protectors of forests, if given a voice in the issue (15). Investments in forest-related jobs hold the potential to increase local communities’ economic power, thereby also increasing their ability to protect forests beyond capabilities that would have otherwise been the norm.
The number of people impacted depends on the scale of the investment. Larger operations with more employees or with distributed commercial models, such as outgrower schemes, will reach more people and have greater impact. Investments along forestry value chains can also generate broader impact, as multiple different groups benefit. In addition, investments that offer financial and other benefits directly to communities can more effectively create the desired community-focused impact.
The amount of change depends on the type of community-focused project, geographic challenges, and consideration of risk. To create lasting impact, investors can take additional measures to, among other concerns, legally ensure long-term property rights, transfer technical and managerial skills, and promote market linkages (2).
Examples of how much impact can be achieved from projects aligned with this strategy include the following:
Stakeholder Participation Risk: Community-based forestry usually performs below its potential without empowerment, secure tenure, and strong governance (2). Secure tenure is particularly important for Indigenous Peoples and local communities to benefit from investments in sustainable forestry, as some lack the right to exclude outsiders from lands they control or may have no legally recognized right to manage their lands. Working with communities that have well-established tenure—or working to establish tenure—and involving communities early in project design to address their concerns can help mitigate this risk.
Without communities’ buy-in and attention paid to their constraints, the project may perform below capacity (2). Communities can also suffer from burnout if expectations are unrealistic (2).
Concerning secure tenure, lack of ownership rights may undermine incentives to invest in long-term improvements and limit the ability of communities to establish and maintain natural resource–based enterprises. Without clear ownership of land, Indigenous Peoples and local communities may be unable to claim payments in compensation for their conservation activities, leading to decreased participation.
INVESTMENT 1: The Moringa Fund invests in integrated value chains for agroforestry to improves lives alongside the environment. In Nicaragua, Moringa invested in an outgrower program for Cafetalera Nicafrance, which produces high-quality coffee and timber on 1,800 hectares of land. The outgrower program specifically targets small- and medium-sized farms affected by climate change and a crippling coffee disease outbreak. It offers zero-interest loans, access to improved seedlings and better coffee processing technology, and capacity building trainings. In addition, the outgrower program ensures coffee sales to premium coffee brands like Nespresso, reducing the risk for farmers. Since 2015, the program has helped strengthen the local community by generating $3.4 million in value and providing 880 jobs. In addition, Nicafrance’s provides healthcare, transportation, housing and education to its workers and their families (19).
INVESTMENT 2: The Forestry and Climate Change Fund invested—in partnership with local NGO Naturaleza para la Vida—in a sustainable forest management venture in Guatemala. Partnering with small- and medium-sized landowners, Naturaleza para la Vida has responsibility for inventory, forest-management plans, licenses, and the execution of the work. In return, forest owners are responsible for fire prevention and the general safekeeping of their forests. This partnership offers key technical support and creates local jobs in timber production while helping communities to continue managing their natural forests (20).
de la O Campos, Ana Paula, Chiara Villani, Benjamin Davis, and Maya Takagi. Ending Extreme Poverty in Rural Areas: Sustaining Livelihoods to Leave No One Behind. Rome: Food and Agriculture Organization of the United Nations, 2018.
Gilmour, Don. Forty Years of Community-Based Forestry: A Review of Its Extent and Effectiveness. FAO Forestry Paper 176. Rome: Food and Agriculture Organization of the United Nations: 2016.
Food and Agriculture Organization of the United Nations (FAO). State of the World’s Forests: Enhancing the Socioeconomic Benefits from Forests. Rome: FAO, October 2015.
Poverty Headcount Ratio at $1.90 a Day (2011 PPP) (% of population). World Bank DataBank. Accessed March 2019. https://data.worldbank.org/topic/poverty.
Chao, Sophie. Forest Peoples: Numbers across the World. Moreton-in-March, UK: Forest Peoples Programme, May 2012.
Weisse, Mikaela and Elizabeth Dow Goldman. “2017 Was the Second-Worst Year on Record for Tropical Tree Cover Loss.” World Resources Institute (blog), June 26, 2018. https://www.wri.org/blog/2018/06/2017-was-second-worst-year-record-tropical-tree-cover-loss.
Food and Agriculture Organization of the United Nations (FAO). The State of the World’s Forests 2018: Forest Pathways to Sustainable Development. Rome: FAO, 2018.
International Labour Organization (ILO). “Labour Market Access: A Persistent Challenge for Youth Around the World.” ILOSTAT: Spotlight on Work Statistics No. 5, March 12, 2019.
Lore, Terri, ed. Youth and Migration. World Youth Report 2013. New York: United Nations, 2013.
Franzel, Steven and Charles Wambugu. “The Uptake of Fodder Shrubs among Smallholders in East Africa: Key Elements that Facilitate Widespread Adoption.” In Forages: A Pathway to Prosperity for Smallholder Farmers, edited by M. D. Hare and K. Wongpinchet, 203-22. Proceedings of an International Symposium, Faculty of Agriculture, Ubon Ratchathani University, Thailand.
Sunderland, Terry, Ramadhani Achdiawan, Arild Angelsen, Ronnie Babigumira, Amy Ickowitz, Fiona Paumgarten, Victoria Reyes-García, and Gerald Shively. “Challenging Perceptions about Men, Women, and Forest Product Use: A Global Comparative Study.” World Development 64, Suppl. 1 (December 2014): S56-S66.
Aguilar, Lorena, Andrea Quesada-Aguilar, and Daniel M. P. Shaw, eds. Forests and Gender. Gland, Switzerland: International Union for the Conservation of Nature, 2011.
Hall, Gillette and Ariel Gandolfo. “Poverty and Exclusion Among Indigenous Peoples: The Global Evidence.” World Bank Voices (blog), August 9, 2016. https://blogs.worldbank.org/voices/poverty-and-exclusion-among-indigenous-peoples-global-evidence.
Rights and Resources Initiative (RRI). Who Owns the World’s Land? A Global Baseline of Formally Recognized Indigenous and Community Land Rights. Washington, DC: RRI, September 2015.
Ding, Helen, Peter G. Veit, Allen Blackman, Erin Gray, Katie Reytar, Juan Carlos Altamirano, and Benjamin Hodgdon. Climate Benefits, Tenure Costs: The Economic Case for Securing Indigenous Land Rights in the Amazon. Washington, DC: World Resources Institute, 2016.
International Labour Organization (ILO). World Employment Social Outlook: Trends 2018. Geneva: International Labour Organization, January 2018.
Moringa. 2018 Annual Report. Paris and Geneva: Moringa, 2018.
First Investments of the Fund. Forestry and Climate Change Fund. September 2018.
Agroforestry, U.S. Department of Agriculture (USDA), https://www.usda.gov/topics/forestry/agroforestry.
Food and Agriculture Organization of the United Nations. “Towards a Harmonized Definition of Non-Wood Forest Products.” Unasylva 50, no. 198 (1999): 63-64.
This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.
Ding, Helen., Peter Veit, Erin Gray, Katie Reytar, Juan-Carlos Altamirano, Allen Blackman, and Benjamin Hodgdon. October 2016. Climate Benefits, Tenure Costs: The Economic Case for Securing Indigenous Land Rights in the Amazon. World Resources Institute: Washington, DC.
Mullan, Katrina. 2014. “The Value of Forest Ecosystem Services to Developing Economies.” CGD Working Paper. Washington, DC: Center for Global Development.
Ferraro, Paul J., Kathleen Lawlor, Katrina L. Mullan, and Subhrendu K. Pattanayak. “Forest Figures: Ecosystem Services Valuation and Policy Evaluation in Developing Countries.” Review of Environmental Economics and Policy 6, no. 1 (January 1, 2012): 20–44.
Gilmour, Don. 2016. “Forty Years of Community-Based Forestry: A Review of Its Extent and Effectiveness.” FAO Forestry Paper 176. Food and Agriculture Organization of the United Nations: Rome, Italy.
Jeuland, Marc A., and Subhrendu K. Pattanayak. “Benefits and Costs of Improved Cookstoves: Assessing the Implications of Variability in Health, Forest and Climate Impacts.” PLOS ONE 7, no. 2 (February 13, 2012): e30338. https://doi.org/10.1371/journal.pone.0030338.
Food and Agriculture Organization of the United Nations. October 2015. State of the World’s Forests: Enhancing the socioeconomic benefits from forests. Food and Agriculture Organization of the United Nations: Rome, Italy.
IPCC, 2014: Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the
Intergovernmental Panel on Climate Change [Core Writing Team, R.K. Pachauri and L.A. Meyer (eds.)]. IPCC, Geneva, Switzerland, 151 pp.
Romañach, Stephanie S., Donald L. DeAngelis, Hock Lye Koh, Yuhong Li, Su Yean Teh, Raja Sulaiman Raja Barizan, and Lu Zhai. “Conservation and Restoration of Mangroves: Global Status, Perspectives, and Prognosis.” Ocean & Coastal Management 154 (March 15, 2018): 72–82.
Jose, Shibu. “Agroforestry for Ecosystem Services and Environmental Benefits: An Overview.” Agroforestry Systems 76, no. 1 (May 1, 2009): 1–10. https://doi.org/10.1007/s10457-009-9229-7.
Rights and Resources Initiative, Woods Hole Research Center, World Resources Institute, Environmental Defense Fund, Alliance of Indigenous Peoples of the Archipelago, Mesoamerican Alliance of Peoples and Forests, Coordinator of Indigenous Organizations of the Amazon River Basin. September 2018. A Global Baseline of Carbon Storage in Collective Lands. Rights and Resources Initiative: Washington, DC.
Jamnadass R, Place F, Torquebiau E, Malézieux E, Iiyama M, Sileshi GW, Kehlenbeck K, Masters E, McMullin S, Weber JC, Dawson IK. 2013. “Agroforestry, food and nutritional security.” ICRAF Working Paper No. 170. World Agroforestry Centre: Nairobi, Kenya. DOI: http://dx.doi.org/10.5716/WP13054.PDF
Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.
Number of communities where the organization’s products/services were available during the reporting period.
Organizations should footnote their definition of community and all assumptions used. See usage guidance for further information.
This metric should be disaggregated by income level and indigenous affiliation. In addition, it is essential to look at historical land titles. LandMark (http://www.landmarkmap.org/) provides data on indigenous and community land rights.
This metric captures the total number of communities that benefit from the investment. It is an essential measurement to understand the direct and indirect impacts of the community-focused project.
Number of full-time equivalent employees working for enterprises financed or supported by the organization as of the end of the reporting period.
Organizations should footnote all assumptions used. See usage guidance for further information.
This measurement should be relatively easy to measure by analyzing a business’ daily operations. This metric focuses on formal jobs provided by the business.
Bringing new jobs to local communities can create new prosperity at the local level, encouraging less rural-urban migration and more community satisfaction. Since employment is generally easy to measure, it functions as a proxy for the development of shared prosperity between the business and the community, and can help determine the long-term involvement and interest of the community.
Number of unique client individuals who were served by the organization and provided access, during the reporting period, to products/services they were unable to access prior to the reporting period.
Organizations should reference New Access to Water, New Access to Energy, New Access to Education, New Access to Finance, or New Access to Healthcare in the glossary for more clarification.
Organizations should footnote all assumptions used. See usage guidance for further information.
Unless all clients are surveyed about their use of the service or product and sources before and after the sale of the replacement product, this metric is based on assumptions the organization calculates. If so, these data should be sourced from a survey of a representative sample of clients and then extrapolated to the broader client-base. This metric should be disaggregated by gender, income level, and indigenous affiliation.
This metric captures the number of unique individuals who did not previously have access to the service or product, but who now do as a function of this investment. Essentially, it measures the filled market gap, demonstrating the extent to which this investment has provided new access to a product or service compared to previously. Investors may seek to focus on filling market gaps through direct access or by providing a comparable product at a lower price or via an innovative financing mechanism.
Number of individuals who received training offered by the organization during the reporting period.
Organizations should footnote the type and extent of the training provided as well as who the training was provided to. See usage guidance for further information.
The metric captures the number of individuals who received training services (of any type) provided by the organization. Training may or may not be restricted to clients of the organization. Examples of training types, which should be footnoted, might include enterprise or business development and use of new technology or service. This metric should be disaggregated by gender, income level, and indigenous affiliation.
Investors in organizations that include knowledge transfer, training, or follow-up support in addition to their products and services may consider including this metric in their data collection. Trainings and follow-up support can increase an investment’s positive impact. These data are useful both for reporting impact and for improving products and services.
Price premium percentage that the producer (supplier) selling to the organization obtains from the organization for its goods or services during the reporting period.
= (Payments to Supplier Individuals: Smallholder (PI7852)) / (Payments to Supplier Individuals: Total (PI1492) + Payments to Supplier Organizations: Total (PI5478))
Organizations should footnote all assumptions used, including the source for the benchmark product/service rate. See usage guidance for further information.
The price premium is the percentage by which a product’s selling price exceeds a benchmark price, which is the average price that may be obtained for a similar good or service in the local area. For example, suppose that, by selling to the organization, farmers get USD 2 per pound for a good (e.g., apples) and only USD 1 per pound for selling the same good in the local market. The reporting organization would report this as (USD 2 − USD 1)/USD 1 = 1 (or 100%), footnoting assumptions on how they derived the benchmark, local market rate.
Investors aiming to increase local communities’ profits for their products may consider including this metric, which provides a measure of the communities’ above-benchmark income from sales of their products.
Indicates whether the organization implements a strategy to manage its interactions with local communities affected by its operations.
Organizations should footnote the relevant details about their community engagement strategy, and how it is being implemented. See usage guidance for further information.
One way to consider which communities to engage is to look at historical land titles. LandMark (http://www.landmarkmap.org/) provides data on indigenous and community land rights. In engaging the community, a consent process should be put in place to ensure that the community as a whole endorses the project, as opposed to a few elite members.
This metric is essential for better understanding the needs and interests of the communities the project wants to support. To deliver long-term impact on local communities and the forests they depend on, a community engagement strategy is an important first step to understand which services the project can best provide for the community (e.g., training, access to market, tenure, etc.). Metrics can then be formed around the successful delivery of these individual goals.
Area of land that is protected from deforestation as of the end of the reporting period.
Organizations should footnote the methods applied to measure avoided deforestatin.
If pursuing a community-focused strategy in forested areas, this metric can show the area of forest where the project can claim to have helped avoid deforestation.
Area of land that has been reforested by the organization during the reporting period.
Organizations should footnote all assumptions used.
Land can be restored through a variety of different techniques, such as agroforestry, silviculture, or reforestation. The total area should be carefully measured using GPS data points to measure progress over time.
If pursuing a community-focused strategy using restoration techniques, this metric can show the area of land that has benefited from additional trees.
Area of land with a protected land status as of the end of reporting period.
Organizations should footnote the methods applied to ensure protected land status. See usage guidance for further information.
Project boundaries should be clearly demarcated and monitored throughout the project. In monitoring deforestation risk, investors can consider using Global Forest Watch Pro (https://pro.globalforestwatch.org/).
If pursuing a community-focused strategy on protected land areas such as natural forests, this metric can show the total protected area that has benefited from the investment.
Length of freshwater streams under ecological restoration management on protected land, land under sustainable stewardship, or land under sustainable cultivation during the reporting period.
Organizations should footnote all assumptions used as well as relevant ecological restoration activities undertaken during the reporting period.
This measurement focuses on the freshwater streams protected as a result of the project. To measure this indicator, analyze the total length and area of freshwater streams within the project’s total terresterial area, whether conserved in their natural habitat or actively restored through planting vegetation.
Protecting bodies of fresh water, especially streams, add additional value to the forest projects. Carefully managed, healthy streams can provide freshwater for many downstream communities, as well as native flora and fauna.