Palm oil companies that want to gain, or maintain, Roundtable on Sustainable Palm Oil (RSPO) certification must compensate for the historical clearance of high conservation value forest areas. However, many palm oil companies have limited knowledge and experience of conservation. Meanwhile, many high-quality ecosystem service projects have limited knowledge and experience of working with private sector finance. The Sustainable Commodities Conservation Mechanism (SCCM) provides a solution to this.
Tapping into global commodities markets to unlock long-term, sustainable finance that supports local communities and drive vital conservation.
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Protecting and restoring nature could be worth $200bn in business opportunities by 2030
Lestari Capital, founded with seed funding from Partnerships for Forests and strategic support from SYSTEMIQ, is piloting a new way for companies to pay this compensation. The Sustainable Commodities Conservation Mechanism (SCCM) connects RSPO palm oil companies and high quality conservation projects they can fund.
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Lestari Capital identifies suitable conservation projects and then markets and pitches these to RSPO certified companies on behalf of the projects. Lestari Capital also brokers contracts between the projects and the companies, through the SCCM model, to ensure environmental and social safeguards, performance-based payments and effective deployment of funds.
The SCCM provides a new source of finance for conservation, ecosystem restoration and community forestry projects. In so doing it creates an effective and efficient path for companies to act credibly and transparently on their sustainability commitments.
If this proof of concept is successful there is a vast potential to scale the SCCM model into new regions and new commodities thereby increasing conservation of forests as well as unlocking opportunities for businesses.
