For global commodity producers, certification under standards such as the Roundtable on Sustainable Palm Oil has become a business necessity. Lestari Capital, based in Jakarta and Singapore, has been working to turn such leverage into a mechanism to finance large-scale forest conservation.
Last week, Lestari announced the first ecosystem-service deal under its new Sustainable Commodities Conservation Mechanism. Cargill, the worldâs largest private company, will finance a 25-year conservation project run by the Nanga Lauk community in Indonesiaâs Heart of Borneo region, enabling community members to protect the forest and develop ecotourism and wild forest products.
âFor the first time, the people doing this work can earn a wage to support their families,â Ibu Rusliyani, who serves on the Nanga Lauk community forest board, said in a statement.
Its support for the conservation project will help Cargillâs plantation in West Kalimantan meet the RSPO requirements, writes Lestariâs Gabriel Eickhoff. He said the Sustainable Commodities Conservation Mechanism addresses both the lack of investor demand for high-quality conservation projects and the global commodities markets undervaluing of ânatural capital.â
âWe address this missing link by connecting corporate demand for durable conservation outcomes with projects that need long-term operating capital on the ground,â he said. (Returns on Investment listeners heard about the mechanism on ImpactAlphaâs podcast, âNature reduces risk.â)
The David and Lucile Packard Foundation provided early support for Lestari, as did the  Partnerships for Forests incubator back by the UKâs Department for International Development.
âWe deliver private sector efficiency to a traditionally donor-driven space by reducing overheads and pushing for greater scale,â Eickhoff says. âEvery day we strive to incorporate conservation into supply chain and other corporate costs, as we have done with Cargill.â Share this post.