Lestari Capital launches innovative finance mechanism to meet new demand for forest protection and restoration

BALI, Indonesia--Lestari Capital announced today the launch of a new financial mechanism to promote long-term conservation through global commodity markets, with Cargill as a first client. The announcement was made at the Tri Hita Karana Forum for Sustainable Development.

Lestari Capital’s impact model addresses the need for long-term approaches to conservation finance through collaboration with the financial, commodity and climate economy sectors. At the center of the partnership is the Sustainable Commodities Conservation Mechanism (SCCM), which finances projects over a 25-year period. The SCCM provides independent fiduciary oversight that ties payments to results on the ground, ensuring benefits to local communities, global climate and biodiversity.

Lestari Capital provides a secure and transparent project finance vehicle for commodity companies to meet a growing range of sustainability commitments, and standards such as Roundtable on Sustainable Palm Oil (RSPO) certification. The company is also developing conservation finance sources from other sectors that are evolving under consumer and industry pressures, including energy, transportation, and technology.

“We founded our company to address two aspects of a market failure. High-quality conservation projects lack adequate demand and global commodities markets critically undervalue natural capital.” said Gabriel Eickhoff, CEO of Lestari Capital. “We address this missing link by connecting corporate demand for durable conservation outcomes with projects that need long-term operating capital on the ground,” he added.

Cargill’s initial transaction through the SCCM will finance 25 years of conservation operations for a community forestry project in Indonesia’s Heart of Borneo region, enabling community members to protect the forest and invest in new livelihoods such as ecotourism and wild forest products.

“We worked with Lestari Capital to design a mechanism that meets our needs as an RSPO member, ensuring our financial commitments to biodiversity conservation and landscape restoration are managed responsibly and endure for the long term.” said Colin Lee, Director of Corporate Affairs for Cargill Tropical Palm Holdings Pte Ltd. “It is our privilege to enable the Nanga Lauk Village community to protect critical biodiversity and ecosystem services vital to their livelihoods. I hope our commitment encourages other companies to make conservation and restoration a part of their everyday operations” he added.

Increasingly, forest protection and restoration - along with sustainable land use and respect for the rights of Indigenous Peoples - are becoming part of a critical foundation for natural climate solutions. Collectively they have the potential to deliver up to 30 percent of the carbon storage needed by 2030 to meet the goals of the Paris Climate Agreement.

“With more than 48 football fields of forest lost on our planet every minute, we desperately need new approaches to conservation finance,” said Glenn Hurowitz, CEO of Mighty Earth, a global environmental organization. “The world urgently needs corporate actors to define their commitments with real action on the ground to support landscape conservation in critical regions,” he added.

Cargill’s palm oil supply chain. The SCCM provides a path to action on conservation requirements from RSPO, a certification that meets increasingly discriminating standards from import markets, such as the European Union and other developed countries. In addition to supporting sustainability standards, Lestari Capital also delivers lasting community benefits to ensure environmental outcomes are sustained.

“For generations, the people of Nanga Lauk have been protecting the lake and forests surrounding our homes, because many depend on these resources,” said Ibu Rusliyani, member of the Nanga Lauk community forest board in the Heart of Borneo. “For the first time, the people doing this work can earn a wage to support their families and we feel truly appreciated. It is very motivating,” she added.

Lestari Capital made the announcement at a major international forum in Bali where the Indonesian President is convening executives - including from Unilever, the Global Environment Facility, Alibaba, PT SMI, Tsinghua University, HSBC, Standard Chartered, Credit Suisse, ADM Capital, the Asian Development Bank, the China Development Bank, SYSTEMIQ and the Blended Finance Taskforce - to call for action on new approaches to natural climate solutions.