February 2013: The International Institute for Environment and Development (IIED) has released a briefing titled “Ringing the Changes with a New Approach to Forest Investment.” It addresses balancing renewed investor interest in forests with social and environmental benefits and sustainability. To address this challenge, the briefing introduces the “Investing in Locally Controlled Forestry” (ILCF) framework.

The briefing states that increasing demand, reduced supply and continued uncertainty in global financial markets are giving way to more investment in forestry. This increased investment has, in turn, resulted in escalating rates of afforestation throughout the world, however, few economic benefits have been observed for local holders of forest rights.

According to the briefing, the ILCF seeks to improve the social and environmental benefits of forestry investments by combining enabling investments with asset investments. Enabling investments are presented as those that support capacity and sector development, but that may not deliver investment returns. Asset investments, on the other hand, are presented as conventional product or profit investments on which a return is expected.

The briefing concludes that while ILCF can deliver significant long-term benefits from forestry investments, it requires innovative partnerships between government, the private sector, donors, non-governmental organizations and local rights holders. In order to illustrate this, the briefing presents examples on mahogany and xate in Guatemala and shea butter in Burkina Faso. [Publication: Ringing the Changes with a New Approach to Forest Investment]