Asia is home to about 18 percent of global forests and exceptionally rich biodiversity – from giant pandas to Bengal tigers, to ginkgo biloba trees that are older than the dinosaurs.
The continent’s forests, which span high-altitude montane cloud forest to tropical tidal mangroves, are also important sources of food, timber, medicines and other products important for many communities’ survival and livelihoods. They provide critical ecosystem services as well, such as carbon sequestration and maintaining the flow and quality of water for agricultural and urban areas.
But deforestation and forest degradation are threatening much of this natural wealth. Southeast Asia’s forests are shrinking faster than those anywhere else on the planet: between 1990 and 2020, an area larger than Germany was deforested in that region alone, driven largely by logging and land clearance for agriculture.
Private investment is urgently needed to supplement national efforts to protect and restore Asia’s forests. Financial products like sustainability-linked bonds and carbon credit programs can generate valuable returns, particularly when they line up with national restoration and climate mitigation targets.
Yet effective protection and restoration is not as simple as fencing off forests or putting trees in the ground. It requires carefully assessing and engaging with the natural, social and business environments surrounding an initiative.
There are countless cautionary tales of neglecting these elements, resulting in vast amounts of energy, time and conservation cash being wasted.
Journey with us from the mangroves of Indonesia’s archipelago to the moist deciduous forests of central India, as we explore some of the pitfalls and possibilities of making investment dollars count for people and planet.
The story of Asia’s mangrove forests offers a compelling case for the need to plant the right trees in the right places and for the right reasons.
Mangroves are dotted around many of the region’s tropical and subtropical coastlines, where they play diverse and important roles. For example, they can serve as fish nurseries and breeding grounds, provide timber, fuel wood, and medicine, sequester carbon, and mitigate the impacts of storm surges on coastal communities.
But these roles have historically been largely overlooked, with millions of hectares already degraded and deforested to make way for aquaculture, agriculture and coastal development. Globally, over a quarter of mangroves have disappeared in just the past 50 years, and Southeast Asia is experiencing some of the highest rates of decline.
Fortunately, governments are increasingly showing interest in preserving and restoring mangrove forests. For instance, Indonesia, which has the largest expanse of mangrove forests of any country in the world, has committed to rehabilitating 600,000 hectares of these forests between 2020 and 2024.
But even with these commitments, mangrove restoration hasn’t been a universal success across the region. In the Philippines, despite decades of effort and investment, less than 20 percent of planted mangroves have survived. Likewise, a recent analysis looked at 23 mangrove planting sites in Sri Lanka. It found that just three sites had survival rates of over 50 percent, and at nine sites, not a single mangrove survived.
“While many tens of millions of euros have been spent on mangrove restoration in recent years, the majority of these restoration projects have failed,” says Susanna Tol, a senior communications and advocacy officer at Wetlands International.
“This is the result of the use of inadequate restoration techniques and a failure to resolve socioeconomic and institutional barriers to effective restoration,” she says.
Restoration programs, she explains, often favor large-scale mangrove monocultures, which may not be appropriate for the location in which they are placed and often fail to offer coastal protection, enhance fisheries or provide other intended benefits.
In Indonesia, community groups constructing permeable structures that trap mud for mangroves to regrow
Permeable structures in action with mud accumulated behind them
Local people picking mangrove fruits
In some cases, ill-chosen sites can even cause environmental damage, such as when people unwittingly plant mangroves on top of other important and functional ecosystems like mudflats and seagrass beds, or in amongst naturally-regenerating saplings.
For example, according to the Best Practice Guidelines for Mangrove Restoration, many recent mangrove restoration projects in the Philippines have involved planting mangroves in places that they were unlikely to thrive, such as on seagrass meadows and mudflats.
Instead, Tol says, such programs should focus on establishing “a sizable, diverse, functional and self-sustaining mangrove forest” that can provide multiple goods and services and adapt to climate impacts: “ecologically restored forests are likely to be more resilient to change.”
This requires the careful assessment of hydrology, nutrient, and sedimentation requirements. Land conversion or shifts in freshwater supply can mean that “mangroves may no longer be able to thrive where they used to,” said the co-authors of the Wetlands International publication ‘Mangrove restoration: To plant or not to plant?’.
“Regeneration of a healthy mangrove forest can only happen if the enabling biophysical conditions for mangrove growth are put back in place,” they said. This might entail restoring old creek systems or installing permeable structures to reduce wave impact, trap sediment and enable mangrove recovery.
This means that where people are gaining value from unsustainably exploiting mangrove forests, alternative activities must be developed to meet their resource needs and make it more worthwhile to leave the trees standing – such as beekeeping, fisheries or ecotourism.
Land ownership and use rights also need to be clarified, and local communities must have the will and capacity to manage and monitor the restoration process.
It takes time to get this kind of process right, so it’s important to have access to patient capital and mitigate external pressures like demand for firewood, building materials, and other resources that mangroves provide.
The Best Practice Guidelines, jointly developed by the Global Mangrove Alliance and the Blue Carbon Initiative, offer a blueprint to support impactful investments in conserving and restoring mangrove forests.
“The most effective way to restore mangroves is to create the right biophysical conditions for mangroves to grow back naturally and the right socioeconomic conditions to support their long-term protection,” say the authors in the executive summary.
“We urgently need to change the narrative away from single-species mass tree planting to inclusive ecological restoration approaches that involve local stakeholders and build on the latest scientific insights.”
As the experts above suggest, a key piece of the puzzle is creating the right kind of business ecosystem to support green initiatives – like inclusive ecological mangrove restoration – to succeed in the long term.
The World Resources Institute (WRI) Land Accelerator program aims to help do just that. Launched in 2020 with seed and early stage venture fund Sangam Ventures and government agencies Startup India and Invest India, it specifically targets South Asian businesses that restore degraded forests and farmland.
The program supports five specific types of solutions: sustainable agriculture, organic land amendment and management, smart agri-tech, circularity-based solutions for farms and forests, and building value chains for non-timber forest products.
“Land restoration is a very niche and emerging sector,” says Kavita Sharma, senior program manager for the accelerator. “[Prior to the program], there weren’t any dedicated business incubation and acceleration programs supporting the entrepreneurs.”
The accelerator provides entrepreneurs with mentorship, networking opportunities, technical training and workshops to build their storytelling and pitching skills, as well as build their ability to track environmental and social impact. It helps them build business models and understand the land restoration landscape, associated additionalities, and impacts on local communities.
“[Our participants so far] needed a lot of help in building sustainable financials to pitch their business models effectively to impact investors and focus on becoming self-sustainable rather than relying on grants and charity funding,” says Sharma. “Therefore, we targeted the business curriculum equally around building capacities and making them more competent at raising capital.”
A compelling case study comes from the central Indian state of Chhattisgarh, where a very remotely-located startup is working with Indigenous women and smallholder farmers – as shareholders – to develop a value chain for the sustainable harvesting and value addition of non-timber forest products such as custard apple and tamarind.
“It’s about mobilizing the marginalized and Indigenous communities around the resources that they have,” says Sharma, “and how they can create local and sustainable livelihoods by adding value to those natural resources.”
Through its Land Accelerator training, the startup raised funds from several leading Indian impact investors and is now self-sustaining. It collaborates with over 200 farmers and more than 10 self-help groups and is expanding its operation to neighboring states.
“Through our work with this enterprise, we learned that community-led business models like this are scalable – and that impact investors are willing to invest in them,” says Sharma.
Another inspiring example is growing out of the barren and degraded landscapes of Central and East India, where a woman entrepreneur is leading an enterprise to develop clusters of medicinal native plant cultivation.
This business is training up marginalized and Indigenous communities to grow, harvest and add value to these plants. It then provides market linkages to established pharmaceutical companies to ensure the farmers receive a steady income while restoring their lands.
It’s also mobilizing these communities to develop value chains for other indigenous crops such as millet, which are climate-resilient by nature.
“Because of the new market linkages, the farmers are immediately able to dispose of their harvest and they need not wait to get good prices and risk losing some of the produce in the meantime,” says Sharma.
“At the same time, they are inspiring more investors to take up these kinds of activities – it’s also spreading to nearby geographies.”
It hasn’t been all plain sailing. A key step was defining what land restoration encompasses – and communicating it to communities, entrepreneurs, and investors.
“We had to very carefully identify the domains which we wanted to support under land restoration, and then reach out to people and pitch about the available venues through which land restoration can be done and what land restoration actually means,” says Sharma.
“Our second challenge was to position the program so that we got relevant applications, because there is a very thin line between agriculture- and allied sector-focused businesses and land restoration-focused businesses.”
To date, 120 businesses from across India and neighboring countries have graduated from the program. Between them, they have created more than 2,600 jobs, restored over 1 million hectares of land, engaged nearly 1.5 million small-scale and marginalized farmers and grown 8.9 million trees.
So far, a quarter of the cohort has succeeded in raising funds from impact investors. “Mobilizing and convincing impact investors is still one of the biggest challenges because it’s still quite a niche field,” says Sharma.
“There’s a relatively long gestation period in the financial models of these businesses: when you plant a tree, it doesn’t start giving you money the following year. It may need three or four years for the first harvest to come and for the farmers to show that their businesses are profitable.”
Looking forward, the program aims to amp up its support for women entrepreneurs and gender inclusivity. “We have found that women are extremely committed to creating impact and learning more, and building networks and extending more support to their fellow women entrepreneurs,” says Sharma.
The program also seeks to make the cohort composition more holistic, in line with its strategy of developing value chains for food and water as well as land.
“We are on our journey to address all of the challenges that have come up and continue to support the entrepreneurs towards creating a restoration economy.”
Text by Monica Evans
Illustrations by Inês Mateus
Produced by Eden Flaherty