State of Finance for Forests (SFF) 2025

News: UNEP’s State of Finance for Forests 2025 sets a new 2023 finance baseline and urges a rapid scaling of funds to meet 2030 and 2050 targets.

About State of Finance for Forests (SFF) 2025

• It presents a global overview of 2023 public and private finance for forests, quantifies investment needs to 2030 and 2050, and highlights the finance gap and harmful flows.
• It ties forest finance to Rio Convention-aligned climate, biodiversity, and restoration goals.
• Launched by: United Nations Environment Programme (UNEP)

Key findings in SFF 2025

• Major trends
  • Forest finance in 2023 totaled US$84 billion: 91% public (US$77b) and 9% private (US$7.5b); domestic public spending (~US$75b) dominates.
  • Investment needs rise to US$300b by 2030 and US$498b by 2050; the gap is ~US$216b/year to 2030.
  • Expanding nature‑based solutions (NbS) by nearly 1 billion hectares by 2030 will be essential to meeting the Rio Convention goals.
• Positive outlook
  • Private financing is growing steadily through: Certified commodity supply chains (39 %), Impact investing (23 %).
    • Meanwhile, carbon markets and emerging biodiversity credit/offset systems are establishing themselves as key investable asset classes.
  • On the public side, roughly 80 % of international forest funding still comes as concessional Official Development Assistance (ODA), aligned with hybrid climate‑biodiversity strategies and supporting the Kunming–Montreal Global Biodiversity Framework (GBF) “30 by 30”target — protecting 30 % of land and sea by 2030.
• Challenges
  • Environmentally harmful subsidies and finance: around USD 406 billion in agricultural subsidies and USD 8.9 trillion (2024) in private credit to high‑deforestation‑risk firms.
  • Geographic inequality: Of the USD 75 billion in domestic public spending, only USD 12.9 billion (17 %) occurred across 31 tropical forest countries, even though they house most remaining global forest reserves.
  • Inclusion shortfalls: Indigenous Peoples and Local Communities (IPs/LCs) received just USD 362 million in international public forest finance (2023), with minimal direct channeling to IP/LC‑led initiatives.

INDIA Specific Findings

• High domestic commitment: India’s public domestic expenditure is ~US$7.1b (2023), placing it among the highest-spending countries.
• International inflows: India is listed among recipients of public international forest finance (~US$81m in 2023)within Asia’s allocation.
• Tropical context: In 2023, governments worldwide spent about US$75 billion of domestic public money on forests, but 31 tropical forest countries together managed only US$12.9 billion (17%). India alone spent around US$7.1 billion, showing strong domestic commitment.

Major Recommendations

• Scale total investments fast to close the ~US$216b/year gap to 2030 and expand forest Nature-based Solutions toward the 1 billion ha 2030 need.
• Mobilize and de‑risk private capital: Strengthen enabling conditions — land tenure security, financial access, safeguards, and Free Prior and Informed Consent (FPIC) — to support JREDD+ and related pipelines.
• Diversify financial instruments: Deploy green/blended finance, high‑integrity carbon markets (including Article 6 mechanisms), and biodiversity credit systems. Leverage IDA, IBRD, EU Institutions, GCF, and GEF channels.
• Redirect harmful flows by reforming agricultural subsidies and tightening regulation of deforestation-risk finance.
• Promote inclusive, gender-responsive finance with direct channels to IPs/LCs, strengthening equity and local capacity.