Forest Finance Risk Consortium (FFRC)

1. Introduction 2. The challenge 3. The business case 4. The solution 5. Please sign up here to receive communications about FFRC/FIC6. News & Insights 7. Related Resources

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Introduction

Deforestation and ecosystem conversion are major contributors to climate change and threaten global preservation of nature and carbon sequestration.

Despite a growing number of pledges to stop deforestation, supply chains and investment portfolios often include exposure to forest-related risks. To address this, FFRC convenes financial institutions, companies, and experts in forest monitoring and climate/nature financial disclosure to provide the necessary guidance and tools to assess, disclose, and eliminate risks related to deforestation and conversion of natural ecosystems.

The challenge

Investment portfolios and companies’ supply chains can contain significant exposure to deforestation and land degradation globally.

However, financial institutions and companies often lack the specific tools and expertise needed to understand and disclose exposure to forest-related risks. This leads to insufficient transparency around forest-related climate risks and lack of action to eliminate financed deforestation, posing a threat to financial markets and hindering efforts to achieve net-zero goals.

The business case

FFRC aims to decrease future risks to financial markets by improving disclosure of deforestation and ecosystems’ conversion risks in line with climate and nature-related financial disclosure guidelines.

This will help financial institutions and companies reduce climate- and nature-related risks from their portfolios and supply chains and achieve their net-zero and nature-positive goals. As mandates around sustainability and climate risks management continue to grow, so too does the imperative for transparency around climate and nature risks and the need for effective tools and guidance.

The solution

FFRC serves as a platform for convening financial institutions, companies, and technical experts in forest monitoring and climate financial disclosure.

Through member collaboration, FFRC assesses existing tools, identifies needs, and develops new guidance, tools, or best practices to incorporate emissions from land-use change into reporting and financial decision-making. The aim is to increase transparency around forest-related climate risks in investment portfolios and companies’ supply chains and direct finance towards sustainable, climate-aligned goals.