September 8 – Ambitious schemes to halt deforestation have come and gone since the Rio Earth Summit in 1992, but the problem rages on, with latest data showing that the world lost 4.3 million hectares of tropical primary forest in 2025, equivalent to more than 11 football fields per minute. Tropical primary forest loss is 46% higher than a decade ago.
Nevertheless, when the Tropical Forest Forever Facility (TFFF) was launched at COP30 by the government of Brazil it was widely supported, not only by governments and the private sector, but by some conservation and Indigenous people’s organisations, including WWF and the Global Alliance of Territorial Communities (GATC).
The TFFF’s aim is to mobilise $125 billion to reward countries that keep low deforestation rates. While other forest conservation initiatives and carbon markets reward emissions reductions, the TFFF is different: It will pay tropical countries directly for each hectare of standing forest they maintain over the long term, at an expected $4 per hectare.
The TFFF is a blended finance mechanism. Governments and philanthropic foundations will agree to lend initial capital of $25 billion at a low interest rate, and to take responsibility for any losses. This creates a safety net to raise an additional $100 billion from private, corporate and philanthropic investors. The combined $125 billion will then be invested in fixed-income emerging markets and other sovereign and corporate bonds, with the first bonds due to be issued next year.
But although more than 50 countries, including 19 potential sovereign investors, endorsed the fund publicly, just a handful have announced contributions – and the clock is ticking.
Norway’s $3 billion contribution is dependent on the TFFF hitting $10 billion by the end of 2026, yet the fund stands at $7.3 billion, with major pledges from Brazil, Indonesia, France, Germany and Norway, and smaller sums from Luxembourg, The Nature Conservancy and the Australia-based Minderoo Foundation.
The latest government to contribute to the fund is the UK, which announced a 400 million pounds loan at the beginning of September. The UK had been criticised for failing to announce funding at COP30, in spite of it being on the steering committee that designed the fund.
Edward Davey, head of the World Resources Institute Europe’s UK office said: “Much more support will be needed for the Tropical Forest Forever Facility to fulfill its promise. Now is the moment for other governments to step up – building on this renewed momentum from the UK and earlier pledges from other nations.”
The Ethical Corporation also spoke to Brazilian and Norwegian government officials co-chairing the TFFF and the Tropical Forest Investment Fund (TFIF), who said filling this finance gap is their “top priority”. Conversations are under way with countries across Europe, the Americas and Asia as well as leading philanthropies, they added.
“While $10 billion (by the end of 2026) is certainly an ambitious goal we believe it is also achievable. Based on the conversations we have been having, we are confident that sponsor countries will step up.”
The World Bank will manage TFIF and determine the availability of funds for forest payments, while a legally distinct TFFF will distribute payments and coordinate monitoring and reporting.
In the meantime, the fund has decided to incorporate in Luxembourg, while the facility has formed its board, and adopted its foundational governing document. “Setting up a new investment fund of this scale takes an enormous amount of careful, thoughtful work, and we are executing it at a deliberate pace,” the officials said.
In May, the Netherlands, Finance for Biodiversity Foundation, Robeco and WWF Netherlands convened a meeting for investors in Rotterdam. This resulted in the Rotterdam Statement, so far signed by 12 financial institutions who endorse the TFFF and have pledged to further its development.
Pedro Moura Costa is CEO of Sustainable Investment Management (SIM), one of the first to sign the statement. He says its main aim is to ensure investors are ready to invest in TFFF as soon as the fund reaches its $10 billion target.
“Am I very optimistic of raising a lot of money in the middle of wars and so on? No. It’s a difficult period of time,” he concedes.
However, backing from some “wild card” countries, like China and Saudi Arabia, with large sovereign wealth funds could make a difference, he says.
If the $10 billion fails to materialise, it will reflect badly on the countries that have not invested yet, he says. “Forests are burning all over Europe, and the countries that are suffering from that are not contributing. Come on: put your money where your forests are,” he says.
According to the officials from the fund and facility, investors have already expressed interest in the bonds as they are expected to be highly rated, liquid, and support “a compelling environmental purpose”.
One question investors have raised with TFFF is whether they will be considered green bonds, as the proceeds will be invested in a global endowment portfolio, not directly invested in green projects.
“We are opening conversations with potential investment bank underwriters and the Luxembourg Stock Exchange to ensure that the conservation impact of TFIF bonds will be made clear to potential investors,” the TFFF officials said, adding: “We expect that the TFIF’s bonds will find a natural home in the green portfolios of institutional investors.”
Speaking at an event at London Climate Action Week, Isabelle Millat, head of sustainable finance for global markets at Barclays Europe, noted that the volume of questions about TFFF coming from investors, asset owners and asset managers was a sign of momentum.
She said that TFFF’s approach was novel, but built on existing financial instrument that markets already understand well.
Fixed-income portfolio managers she had spoken to were positive about finding investors, as long as the price was right. Sustainability teams, meanwhile, had raised queries about reputational risk management and transparency, though the involvement of the World Bank was seen as a “huge plus”, Millat said.
Some environmental NGOs have expressed scepticism. In a blog, Polly Bindman, forests investigator for Global Witness points out that generating the projected profits will depend on several unpredictable factors, including winning sufficient backing from countries and private investors, securing a strong credit rating and delivering consistent returns from a high-risk asset class.
Numerous other campaign organisations and academics have raised concerns that the TFFF is using taxpayers’ money to shield private investors from risk, while allowing them to continue to profit from deforestation through other investments.
Data from Global Canopy’s latest Forest500 ranking revealed that some 60% of the world’s financial institutions with the greatest deforestation risk do not have a deforestation policy in place.
In a concept note in August 2025, the fund stated that it will exclude investments that cause significant environmental impact, such as deforestation and activities related to coal, peat, oil and gas, although Global Witness said it wanted more details about how this commitment will work in.
The element of the TFFF that has arguably met with the most universal approval is that 20% of the payments will be earmarked for Indigenous Peoples and Local Communities (IPLCs) engaged in tropical forest conservation.
Such communities are estimated to be responsible for managing around one-third of the world’s intact forests globally. They will be able to use the finance to protect their rights, secure land tenure, tackle illegal mining and criminality, and pursue alternative livelihoods that are not dependent on clearing areas of forest.
Crucially, it will also give them decision-making rights over the use of the funds, the first time IPLCs will have a formal role in guiding and overseeing how climate finance reaches the ground.
The GATC was heavily involved in the design of the TFFF, with more than 400 Indigenous and local community leaders working with the World Bank, the government of Brazil and the TFFF to define key principles for how resources would flow and be governed.
Still, Indigenous representatives were not granted voting rights on the TFFF’s main boards, limiting their influence over final decisions. In an interview, Juan Carlos Jintiach, executive secretary of GATC, cautioned that Indigenous people’s knowledge needed to be respected.
“You want to know how many tons of carbon are sequestered in the forests we manage? We’ve got the maps, we’ve got the numbers. …. Give us the chance, and we’ll show you how we can continue to contribute for generations, on our land, in our territories.”
Consultations are currently under way with IPLCs as to how the governance structures will work, and criteria for the use of the payments, said Marcos Kaingang, vice minister of Indigenous peoples of Brazil.
Speaking to The Ethical Corporation on the sidelines of London Climate Action Week, Kaingang described TFFF as “a victory” for Indigenous movements in Latin America and across the world.
The Brazilian government plans to use payments from TFFF to support its wider work to secure land tenure for IPLCs, he said. Land rights are widely considered essential to improving IPLC’s ability to protect forests: without secure rights, communities have limited ability to prevent development and natural resource extraction from degrading and destroying their territories.
At COP30, the Brazilian government also announced the Intergovernmental Land Tenure Commitment, to collectively recognise and strengthen the land and forest tenure rights of IPLCs across 160 million hectares globally by 2030.
Earlier this year, it announced the allocation of 3 million hectares of undesignated federal public lands in Brazil for the creation of 67 Indigenous reserves, totalling 14,600 hectares, titled in just six months.
“Once the land is in the hands of the Indigenous peoples, they will be able to protect it to continue their ways of life,” Kaingang said. “As soon as we start to receive money, the communities will be able to keep living there, protecting it, and to develop bioeconomy projects,” he said.
Jintiach emphasised the importance of land rights to the success of the TFFF. “Without territory, without any demarcation title, we are nobody. This is a big risk for us – not only for Indigenous peoples, but what is in our territory, our resources.”
