Major NGOs Unveil Updated Guidance for Companies Navigating Tropical Forest Carbon Credit Market

Today, eight major environmental nonprofits and Indigenous Peoples organizations released comprehensive, step-by-step counsel for companies to follow when investing in tropical forest carbon credits to fight climate change. The new guidance is included in the second version of the Tropical Forest Credit Integrity (TFCI) Guide, which was first issued in May 2022. The updated guide was released at the Annual Meeting of the Governors’ Climate & Forests Task Force, hosted this year by the government of Yucatán, Mexico. 

The eight organizations behind the TFCI Guide are: 

• COICA - Coordinator of the Indigenous Organizations of the Amazon Basin  
• Conservation International  
• Environmental Defense Fund  
• IPAM - Amazon Environmental Research Institute 
• The Nature Conservancy  
• Wildlife Conservation Society  
• World Resources Institute  
• WWF

Companies have a critical role to play in providing the finance necessary to keep tropical forests standing and achieve impact at scale. As part of their climate mitigation strategies, their investments should be a supplement — not an alternative — to deep decarbonization within their operations and supply chains.

One option is investing in the voluntary market for tropical forest carbon credits. Combined with companies’ emissions reductions and complementary actions, the voluntary market can play an important part in helping to limit global warming to 1.5 degrees Celsius. 

The TFCI Guide is designed to assist decision-makers and teams responsible for developing and implementing corporate climate mitigation and net-zero strategies to navigate the tropical forest carbon credit marketplace with clear purpose and high integrity.

The TFCI Guide outlines four detailed steps to help companies implement the guide’s recommendations: 

1. Planning a tropical forest credit portfolio to align with global needs.
2. Building a portfolio with purchases that drive demand for high-quality jurisdictional-scale crediting. 
3. Conducting due diligence to ensure high-quality credits. 
4. Following up with complementary actions and staying attuned to new developments. 

Made possible by a grant from the Bezos Earth Fund, the TFCI Guide is the result of an 18-month collaboration and consensus among the eight organizations in consultation with diverse stakeholders from around the world. 

In the face of growing demand for carbon credits in the voluntary market, it is vital to provide guidance on high-quality carbon credits to ensure that future investment is directed to where it will have the greatest impact. An essential component is respect for Indigenous Peoples and local communities (IPLCs) who must be fully involved in the development of crediting program activities. Crediting and nonmarket-based activities must ensure IPLCs’ full and effective participation from inception and provide them with equitable distribution of the benefits and revenue. 

Harol Rincón Ipuchima, Coordinator of Climate Change and Biodiversity, COICA-Coordinator of Indigenous Organizations of the Amazon Basin said: “The full and effective participation and the recognition of rights of Indigenous Peoples and Local Communities (IPLCs) during all processes is vital for the conservation of forests and the mitigation of climate change. The TFCI Guide not only outlines guidelines on high-quality investments in carbon credits but provides a framework on the full participation for IPLCs to ensure we have a seat at the table. The TFCI Guide recognizes IPLCs as partners and rightsholders, not only beneficiaries throughout the process mainly seeking a fair and equitable distribution of benefits, which is why The Coordinator of the Indigenous Organizations of the Amazon Basin (COICA) is proud to be part of the authoring team.”

Emily Nyrop, Conservation International’s Vice President, Climate Change, said: “For years, companies have been raising their ambitions for a net zero, nature-positive future, but now is the time to turn those commitments into action. This updated TFCI Guide provides the direction companies need to do just that. It points companies toward high-integrity carbon credits and helps ensure that corporate use of those carbon credits aligns with real, measurable progress and impact for both the climate and communities. This is also a consensus document – it shows eight of the world’s leading environmental and Indigenous peoples organizations united on the importance of the voluntary carbon market and on what high-quality, high-integrity investments should look like.”
 
Mark Moroge, Vice President of Natural Climate Solutions at Environmental Defense Fund, said: “The world’s tropical forests are under increasing threat and now is the time for the private sector to invest heavily in saving them so we can avoid the worst impacts of climate change. One key tool in the toolbox for companies to do this is through purchasing high-quality carbon credits, which can unlock billions for forest conservation. Our eight groups came together last year to help companies identify key principles for high quality tropical forest credits, including respect for the rights of Indigenous Peoples and local communities, who must be part of decision-making processes, as well as ensuring resources are allocated on the ground where they’re needed most. Our new roadmap now provides detailed, practical guidance for companies to implement these principles, so buyers know their purchases are sound. With our guidance, companies can have high confidence that their financing contributions will help mitigate climate change by halting tropical deforestation.”

Paulo Moutinho, Interim Executive Director of the Amazon Environmental Research Institute (IPAM), said: “Humanity has established a common goal: Combat the climate crisis and maintain the habitability of the planet. The efforts need to be multiple and involve various sectors and governments. It is a global and collective mission. Part of this fight is to reduce the deforestation of tropical forests, especially in the Amazon. Among these efforts is the construction of a carbon market that is responsible and concerned with the supply of carbon with integrity and good quality. This guide is an important tool for companies interested in buying carbon to differentiate between those with the greatest capacity to conserve forests and benefit indigenous peoples, local communities, women, and underserved communities. Stimulating conscious demand will strengthen jurisdictional REDD+ initiatives, which have great potential to generate high-integrity carbon.”

Matthew Arnold, Global Head of Impact Finance and Markets, The Nature Conservancy, said: “Addressing the climate crisis requires immediate corporate action and a commitment to continued improvement of both the scale and impact of climate solutions. This is especially true for the protection of tropical forests through voluntary carbon markets, which have faced increased scrutiny as they have begun to scale. There still is immense potential to harness private sector finance in a way that empowers Indigenous Peoples and local communities, while bolstering corporate actions to a net-zero future. The TFCI guidance serves as a basis for future and continued improvement in this space.”
 
Todd Stevens, Executive Director of Markets, Wildlife Conservation Society, said: “WCS is encouraged by the outcomes of this guidance and the implications for forest conservation. We believe it will be useful for companies to see how high-quality projects and jurisdictional programs can be mutually reinforcing in helping to deliver the significant climate mitigation action needed to meet our Paris Agreement goals and support corporate net zero commitments.” 
 
Frances Seymour, Distinguished Senior Fellow, World Resources Institute, said: “With a growing number of corporate climate commitments and increased demand for carbon credits, the need for clear guidance on what constitutes a high-quality forest carbon credit is higher than ever. WRI is pleased to help produce this guide, which offers corporate sustainability managers with the guidance they need to develop a tropical forest carbon credit portfolio that prioritizes high-quality emissions reductions credits and incentivizes a rapid transition to jurisdictional-scale accounting and crediting. By following the steps in the TFCI Implementation Guidance, companies can participate in the voluntary carbon market for tropical forest carbon credits with a high degree of integrity and confidence and contribute to the global goal of halting deforestation by 2030.”

Fran Raymond Price, Lead, WWF Global Forest Practice, said: “We cannot overstate the urgent need for corporate action and leadership to protect forests and address climate change. Leadership starts at home, focusing first on a company’s footprint and deep decarbonization in line with a science-based target, augmented by high-integrity, high-impact investments in nature-based solutions. The carbon market must continue to improve and develop. And although it is not a stand-alone solution, if used appropriately, the market can increase support for transformative interventions at scale — as the TFCI Guide suggests — to deliver tangible benefits for people, nature and climate.”