Investments in this strategy aim to increase the production of sustainably grown and harvested non-wood forest products (NWFPs)--both cultivated and wild--to boost local incomes, achieve food security, prevent or reverse land degradation, and build resilience to extreme weather events caused by a changing climate.

What

Dimensions of Impact: WHAT

Investors interested in deploying this strategy should consider the scale of the addressable problem, what positive outcomes might be, and how important the change would be to the people (or planet) experiencing it.

Key questions in this dimension include:

What problem does the investment aim to address? For the target stakeholders experiencing the problem, how important is this change?

Investments aligned with this Strategic Goal aim to solve problems, including:

Rural Poverty and Food Insecurity: Deforestation and the degradation of forests and land exacerbate the problems of food insecurity and poverty both directly and indirectly. Directly, they reduce the availability of fruits and other forest- and tree-based products to harvest for food and income. Indirectly, they decrease the availability of ecosystem services that are relevant for crop production and livestock (1).

With adequate planning and appropriate safeguards in place, investments aiming to increase the production of sustainably grown and responsibly harvested non-wood forest products can improve local communities’ well-being. Non-wood forest products (NWFPs) include but are not limited to foods such as fruits, game, gums, honey, mushrooms, and nuts; food additives such as herbs, spices, and sweeteners; fodder; fibers; pods and seeds; resins and oils; and plants and animals for medicinal use. Investments to increase the production of non-wood forest products can:

  • Increase income generation by commercializing non-wood forest products and hiring local, low-income community members;
  • Conserve and sustainably manage natural forests and improve the harvesting of wild products to ensure adequate forest resources over the long-term for subsistence use and income generation;
  • Implement agroforestry systems that increase soil fertility and crop production, which in turn can increase food security, improve nutrition, and boost incomes; and
  • Conserve and restore tree cover to build local resilience to extreme weather events related to climate change, including droughts, floods, and tropical storms.

What is the scale of the problem?

Several factors contribute to the scale of problems around the production of sustainable non-wood forest products, including:

Land Degradation: Land degradation currently affects hundreds of millions of hectares of agricultural land, forest, and woodland. Between 1981 and 2003, approximately 24% of global land area—home to 1.5 billion people—could be classified as degrading (2). Cropland and forest are disproportionately represented in areas undergoing degradation, with consequent implications for their productivity and for the livelihoods and food security of the populations depending on these landscapes.

Food Insecurity: Despite global advances in agricultural production, the number of people affected by undernourishment, or chronic food deprivation, increased from around 804 million in 2016 to nearly 821 million in 2017—or one out of nine people around the world—and food insecurity is worsening in South America and most regions of Africa (3).

Extreme Weather Events Caused by Climate Change: The number of extreme weather events, including extreme heat, droughts, floods, and storms, has doubled globally since the early 1990s, with drought in particular causing more than 80% of all damage and losses in agriculture (3).

Who

Dimensions of Impact: WHO

Investors interested in deploying this strategy should consider whom they want to target, as almost every strategy has a host of potential beneficiaries. While some investors may target women of color living in a particular rural area, others may set targets more broadly, e.g., women. Investors interested in targeting particular populations should focus on strategies that have been shown to benefit those populations.

Key questions in this dimension include:

Who (people, planet, or both) is helped through investments aligned with this Strategic Goal?

Low-Income, Rural Communities: The sustainable production of non-wood forest products diversifies livelihoods and increases household food security for poor, rural communities by presenting income-earning opportunities. Forest and tree-based investments also help to sustain important ecosystem services that can increase average crop yields and stabilize crop production in rainfed agricultural systems during periods of drought and other extreme weather events, helping to secure food supply and livelihoods in the context of a changing climate (4,5).

Women: Male-headed households in Africa earn more than three times as much income from the sale of woodlot products as do female-headed households (6). Because of women’s traditional involvement in harvesting and processing non-wood forest products, such as shea nuts, investments in non-wood forest product enterprises could appreciably improve gender equality, turning women’s subsistence-level involvement in forest- and agroforest-related activities into economic empowerment.

Indigenous Peoples: Indigenous Peoples represent 5% of the world’s population but comprise a third (33%) of the rural poor (7). At the same time, Indigenous and local community members are recognized as the most effective stewards of dense forests and either own or control 18% of global land (8). Investing in the production of sustainable non-wood forest products can help to protect forest resources and create additional income opportunities for people living in and around dense forests.

The Planet: Forests and trees outside of forests provide ecosystem services that underpin agricultural production systems through soil formation, nutrient cycling and the provision of green manure, the provision of water, pollination, and microclimatic regulation (9). Additionally, investing in the production of sustainable non-wood forest products by implementing agroforestry systems can increase the amount of carbon sequestered and conserve biodiversity in both tropical and temperate regions (10).

What are the geographic attributes of those who are affected?

More than 75% of the Earth’s land is currently substantially degraded (11). While land degradation affects countries at all income levels, its negative impacts on communities are more pronounced in areas where degradation overlaps with poverty and weak social safety nets:

  • In sub-Saharan Africa, half of the total population and three-quarters of the poor live in dryland areas, which are particularly susceptible to land degradation; the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services projects that populations in drylands will increase by 43% from 2010 to 2050—from 2.7 billion in to 4.0 billion (11).
  • Of the estimated 250 million people living in or around tropical forests and savannahs and who are living in extreme poverty, 63% are in Africa, 34% are in Asia, and 3% are in Latin America (12).

Contribution

Dimensions of Impact: CONTRIBUTION

Investors considering investing in a company or portfolio aligned with this strategy should consider whether the effect they want to have compares to what is likely to happen anyway. Is the investment's contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How much and Who?

Key questions in this dimension include:

How can investments in line with this Strategic Goal contribute to outcomes, and are these investments’ effects likely better, worse, or neutral than what would happen otherwise

By 2050, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services projects that up to 700 million people will have migrated as a result of the combination of climate change and land degradation (11). Because climate change increases the volatility of global agricultural and commodity markets, investments in more resilient production systems across forests and landscapes are essential for a secure food supply and livelihoods for the world’s most vulnerable populations. Investments in the production of sustainable non-wood forest products can provide food and other resources directly to rural communities, as well as income for these communities when products are sold on domestic or international markets. Regarding one example of ecosystem services, in the case of soil fertility replenishment, an analysis of more than 90 peer-reviewed studies found consistent evidence that maize yields in Africa rose as a result of planting nitrogen-fixing trees and shrubs (13).

How Much

Dimensions of Impact: HOW MUCH

Investors deploying capital into investments aligned with this strategy should think about how significant the investment's effect might be. What is likely to be the change's breadth, depth, and duration?

Key questions in this dimension include:

How many target stakeholders can experience the outcome through investments aligned with this Strategic Goal?

Restoring 150 million hectares of degraded land could provide USD 30–40 billion per year in supplementary smallholder income and food to support approximately 200 million more people alongside an increase in the resilience of landscapes and sequestration of an additional two billion metric tons per year in carbon dioxide equivalent (14). The number of target stakeholders and area of land affected by each investment will depend on the selected approach or management system, as well as the project’s scale.

How much change can target stakeholders experience through investments aligned with this Strategic Goal?

Increasing the production of sustainable non-wood forest products can offer meaningful benefits to local communities who rely on forests and farmland; the amount of change depends on the type of project, product, and geography. While the change should last at least as long as the investment, additional measures can be taken to ensure long-term property rights, transfer technical and managerial skills, and promote market linkages (15). Transferring tree-maintenance skills to local target stakeholders can also increase the chances that forests and landscapes experience long-term positive changes, such as enhanced soil fertility, reduced erosion, improved water quality, and enhanced biodiversity (10).

The following is one example of impact from a project aligned with this Strategic Goal:

  • Ejido Verde is a Mexican regenerative forestry company whose goal is to restore 12,000 hectares of degraded land through resin-producing pine tree plantations. From 2009 to 2019, the company has helped indigenous Purhépecha communities maintain 3,148 hectares of commercial agroforestry plantations on 482 individual family farms, with the native pine trees producing resin for up to 80 years. The company guarantees a fair market price for all resin tapped, focuses on raising local living standards, and trains resin producers to enhance community decision-making and forestry-management standards (16).

Risk

Dimensions of Impact: RISK

Key questions in this dimension include:

What impact risks do investments aligned with this Strategic Goal run? How can investments mitigate them?

External risk: Investors in the forestry and agroforestry sectors should consider external environmental and climate risks, including fire, tree diseases, insect outbreaks, and extreme weather events. The perishability of many non-wood forest products, combined with the unpredictability of storage and transportation in areas with weak infrastructure, also lead to postharvest handling risks investors should consider. Insurance can protect investors against potential damage caused by fire, tree diseases, insect outbreaks and extreme weather events. Investors can also consider establishing intervention programs such as training to mitigate risks associated with weak infrastructure (17).

Execution and Drop-off Risks: Smallholders, especially in sub-Saharan Africa, often lack the information and equipment required for the proper storage, grading, packing, processing, preservation, and transportation of non-wood forest products, with the resulting risk of low-quality and high wastage of products. Training programs can help bring greater benefits to smallholders through increased efficiency in the value chain. Examples of such activities include trainings around better techniques for quality improvement, storage facilities designed to avoid market gluts, and channels for smallholders to negotiate directly with wholesalers (17).

Only the required knowledge of resource species’ abundance, distribution, and reproductive biology, along with appropriate management plans that respect these ecological limits, can prevent the risk of overharvesting non-wood forest products (18). Increasing income and profit can also encourage farmers and companies to expand the areas under production, increasing the risk of converting or degrading adjacent forests. Multilateral consultations and partnerships during project design stage can also help secure community’s long-term buy-in and mitigate external risks caused by human activities.

What are likely consequences of these impact risk factors?

These risks can result in the loss of products and profits, along with the degradation of landscapes and ecosystems. Risks associated with execution can be mitigated through training in sustainable forest- and farm-management methods and processing approaches alongside careful determination of the biologically sustainable levels of harvest for a product. Third-party certification schemes, such as the Forest Stewardship Council (FSC), Fairtrade International, and FairWild, can also help to mitigate execution risks by implementing appropriate safeguards and monitoring systems.

Illustrative Investment

COOPEASSA is an organic and fair-trade cooperative in Costa Rica that works with farmers to produce, process, and market products such as coffee, pineapple, bananas, and oranges. Thirty years ago, farmers in the Cordillera de Talamanca mountain region primarily produced staple grains, had little access to markets, and were very poor. Producers in the region also relied on chemical fertilizers and pesticides. Understanding the long-term effects that chemical inputs have on soil, water, and health, COOPEASSA committed to teaching farmers organic practices and provided its members with an organic pest repellent. Thanks to financing from Root Capital and other investors, the company has grown from 20 members to 300 while raising average incomes per member farm from USD 650 to USD 4,360 per year (19).

Draw on Evidence

This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.

NESTA: 4
Ecosystem goods and services from plantation forests

Bauhus, J.; Van der Meer, P.; Kanninen, M.; (eds.). 2010. Ecosystem Goods and Services from Plantation Forests. Center for International Forestry Research (CIFOR). Earthscan: London, UK.

About: Examines the non-timber goods and services provided by plantation forests, both temperate and tropical.
NESTA: 4
Forests, Trees and Landscapes for Food Security and Nutrition: A Global Assessment Report

Vira, B., Wildburger, C. & Mansourian, S. (eds.) 2015. Forests, Trees and Landscapes for Food Security and Nutrition: A Global Assessment Report. IUFRO World Series, Volume 33. International Union of Forestry Research Organisations: Vienna, Austria.

About: Reviews global evidence of the food and nutritional security that trees and forests can provide.
NESTA: 1
Agroforestry for Ecosystem Services and Environmental Benefits: An Overview

Jose, S. “Agroforestry for Ecosystem Services and Environmental Benefits: An Overview.” Agroforestry Systems 76, no. 1 (May 1, 2009): 1–10. https://doi.org/10.1007/s10457-009-9229-7.

About: Offers an extensive review of the main findings on the ecosystem services and environmental benefits provided globally by agroforestry.
NESTA: 1
Agroforestry, Food and Nutritional Security

Jamnadass R, Place F, Torquebiau E, Malézieux E, Iiyama M, Sileshi GW, Kehlenbeck K, Masters E, McMullin S, Weber JC, Dawson IK. 2013. “Agroforestry, food and nutritional security.” ICRAF Working Paper No. 170. World Agroforestry Centre: Nairobi, Kenya. DOI: http://dx.doi.org/10.5716/WP13054.PDF

About: Reviews studies and provides evidence on how agroforestry systems can increase food and nutrional security; also provides policy and research recommendations.
NESTA: 2
Trees and Agroforestry for Coping with Extreme Weather Events: Experiences from Northern and Central Viet Nam

Simelton, E., B. V. Dam, D. Catacutan. 2015. World Agroforestry Centre (ICRAF) “Trees and agroforestry for coping with extreme weather events: experiences from northern and central Viet Nam.” Agroforest Syst 89:1065–1082. DOI 10.1007/s10457-015-9835-5.

About: Reports on initial results of an evaluation of farmers’ experiences with trees and crops for responding to major climatic exposures in 21 villages in northern and north-central Viet Nam.
NESTA: 3
Agroforestry and the Improvement of Soil Fertility: A View from Amazonia

Pinho, R. C., R. P. Miller, and S. S. Alfaia. 2012. “Agroforestry and the Improvement of Soil Fertility: A View from Amazonia.” Review Article in Applied and Environmental Soil Science 2012: 616383. doi:10.1155/2012/616383.

About: Reviews literature on the effects of trees on soil physical and chemical properties in tropical, subtropical, and temperate regions, covering both natural ecosystems and agroecosystems.
NESTA: 1
Achieving Mitigation and Adaptation to Climate Change through Sustainable Agroforestry Practices in Africa

Mbow, C., P. Smith, D. Skole, L. Duguma, and M. Bustamante. 2014, “Achieving mitigation and adaptation to climate change through sustainable agroforestry practices in Africa.”
Current Opinion in Environmental Sustainability 6: 8–14. https://doi.org/10.1016/j.cosust.2013.09.002

About: Presents findings on how agroforestry as a sustainable practice helps to achieve both mitigation and adaptation objectives while improving livelihoods of poor smallholder farmers in Africa.
NESTA: 2
Forest Figures: Ecosystem Services Valuation and Policy Evaluation in Developing Countries

Ferraro, Paul J., Kathleen Lawlor, Katrina L. Mullan, and Subhrendu K. Pattanayak. “Forest Figures: Ecosystem Services Valuation and Policy Evaluation in Developing Countries.” Review of Environmental Economics and Policy 6, no. 1 (January 1, 2012): 20–44.

About: Reviews global evidence of the ecosystem services that forests provide for developing nations.
NESTA: 2
State of the World’s Forests: Enhancing the socioeconomic benefits from forests.

Food and Agriculture Organization of the United Nations. October 2015. State of the World’s Forests: Enhancing the socioeconomic benefits from forests. Food and Agriculture Organization of the United Nations: Rome, Italy.

About: Measures the global socioeconomic benefits provided by forests to local economies and communities.

Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.

Define Metrics

Core Metrics

This starter set of core metrics — chosen from the IRIS catalog with the input of impact investors who work in this area — indicate performance toward objectives within this strategy. They can help with setting targets, tracking performance, and managing toward success.

Additional Metrics

While the above core metrics provide a starter set of measurements that can show outcomes of a portfolio targeted toward this goal, the additional metrics below — or others from the IRIS catalog — can provide more nuance and depth to understanding your impact.