TFFF must adopt strong exclusion criteria

The Tropical Forests Forever Fund (TFFF) is a Brazil-led proposal that seeks to compensate countries for preserving tropical forests. It is being presented as “A once-in-a-generation initiative set to launch at COP30 that seeks to secure the future of tropical forests via an innovative financing mechanism”.

One thing is sure: if the TFFF does not adopt strong ESG criteria that ensure it will not invest in Deforestation, Peat nor Exploitation, it will certainly fail in its mission.

Concept Note 3.0 of the TFFF proposal has the intention to exclude from the Tropical Forest Investment Fund (TFIF) investment portfolio “investments that cause significant environmental impact, such as deforestation and GHG emissions”, and “support, or at least do not significantly harm, the overarching objectives of the TFFF.”

This is essential so that the TFIF’s own investments do not undermine the TFFF’s goal of “supporting the long-term conservation of tropical forests.” However, the concept note does not have any detailed criteria.

To avoid investing in deforestation and related environmental, social and governance issues, the TFIF must adopt, publish and implement detailed exclusion criteria, based on international agreements and best practices and must apply to all investments.3 These exclusion criteria must be developed in collaboration with Indigenous, grassroots, women and gender-justice organisations.

The asset manager(s) retained to develop and manage the TFIF’s portfolio must have a track record of robust ESG policies and procedures. They must commit to strong screening processes, regularly updating its exclusion criteria at least quarterly and seek an independent audit of the screening criteria and process at least annually. They must also fully disclose its investment portfolio on a real time basis.

The TFIF governance structure must have representation of Indigenous Peoples and local communities as well as technical and scientific experts in its decision making bodies.

The TFFF must also adopt a grievance mechanism that addresses concerns and complaints with the TFIF investments, and that ensures access to remedy when harms are caused.

The Forests & Finance Coalition sent a letter to the TFFF proposing a set of detailed exclusion criteria. They were developed by the Forests & Finance Coalition, and are based on the critical perspectives and experience of civil society organisations. These criteria are intended to meaningfully address the impacts and drivers of tropical deforestation, particularly industrial agriculture, livestock and plantations, and mineral mining sectors. These exclusions are essential to prevent TFIF from supporting and profiting from companies and activities which undermine its core purpose.