Native forest tenure refers to the rights and responsibilities of individuals, communities and governments over the management of native forested areas. The democratisation of native forest tenure is crucial for ensuring that these lands are managed in a sustainable and equitable manner, with the involvement and benefit of local communities, investors and donors. By using blockchain technology, local communities, retail investors and donors can benefit from a secure and transparent ownership of the land and forest, as well as providing traceability of the funds used for their preservation, ensuring in this way the desired environmental impact. This article will examine the role of environmentally conscious retail investors and the democratization of native forest tenure for sustainable and equitable management lands at risk of deforestation.

Understanding the current state of native forest tenure

The current state of native forest tenure is characterized by the unequal distribution of rights and responsibilities, with the majority of lands being managed by governments and large corporations. This has led to the degradation of native forests and the displacement of local communities. In order to promote the democratisation of native forest tenure, it is important to understand the current state of these lands and the actors involved. Owners of large lands and forests that are at risk of deforestation can include individuals, corporations, and governments.

Individual landowners may have large plots of forested land for personal use or for commercial purposes such as agriculture, timber production, or real estate development. Corporations that own or manage large areas of forested land may include timber and paper companies, palm oil producers, and mining companies. Finally, governments also own large areas of forested land, which may be managed for conservation purposes, or may be leased or sold to individuals or corporations for commercial use.

Regardless of who the owner is, deforestation can occur when forests are cleared for development, agriculture, or other uses, leading to loss of wildlife habitat, carbon sequestration, and contribution to climate change.

Investing in community-led forestry initiatives or democratized tenure

Green retail investors can play a role in promoting the democratisation of indigenous forest tenure in a number of ways:

1. Investing in companies and funds that support sustainable forestry practices,
2. Investing in companies and funds that also advocate for indigenous peoples’ rights by training them in conservation techniques and promoting sustainable forest development.
3. Advocate for responsible business practices: Retail investors can use their voice and potential investments to encourage companies to adopt sustainable forestry practices and respect the rights of indigenous communities. This can include contacting companies directly, engaging in shareholder activism and supporting the campaigns of environmental organisations.
4. Support conservation organisations: Retail investors can also support organisations working to promote sustainable forestry practices and indigenous rights. These organisations may be working on the ground in forested communities or advocating for policy change at the national or international level.
5. Political pressure on incumbent governments: Environmentally conscious investors can promote the democratisation of native forest tenure by engaging in policy advocacy and lobbying.

By participating in these ways, green retail investors can play a role in promoting the democratisation of native forest tenure and supporting sustainable forestry practices that protect the rights of indigenous communities and the health of our planet’s forests.

Supporting community forest rights organisations through the use of blockchain

Another way in which green investors and donors can promote the democratisation of native forest tenure is by supporting organisations that advocate for community forest rights by using blockchain technology. These initiatives make it possible to register land ownership on blockchain platforms, either by supporting local communities that have lost their rights to native forests or by purchasing from large landowners (individuals, companies or governments) that could use such land for commercial explotation with high ecological impact. Blockchain is a decentralised and incorruptible system that immutably records property rights and all purchase and sale transactions through the use of a secondary market. This technology can help to make land ownership transparent, prevent land grabbing and protect the rights of local communities. Asset tokenisation platforms allow the issuance of tokens representing ownership of assets or rights, providing benefits such as split funding and increased liquidity. Fractional financing allows smaller investors to co-own large tracts of land. By making land ownership more accessible to a wider range of investors, it democratises its use, facilitating decisions that benefit environmentally conscious communities. It also increases the liquidity to undertake and realise such investments more easily. Through secondary market operations, it also facilitates the resale of tokens and a better exit strategy.

Funds Traceability with blockchain enables automated control of the fund’s destination.

The challenge of tracing funds in forestry development is a persistent issue. Funds from investors or donors are first transferred to an investment fund, which then delegates the project management to a forest stewardship company or organization. This company or organization then works with multiple suppliers, making it difficult to follow the flow of funds. The situation becomes even more complicated when the forest stewardship company or organization also assumes the role of the investment fund, effectively combining the responsibilities of managing investors’ funds and protecting the forest, leading to confusion in the allocation of funds and, in the worst cases, result in fraudulent activities.

Ensuring that funds invested in the conservation of native forests reach the destination agreed between investors and developers is crucial to the success of these initiatives. Blockchain technology offers a secure and transparent method of tracking the flow of funds, allowing investors to have greater control over the destination of their investments and thus achieve greater impact on environmental actions.

If you’re interested in learning more, please consult BM-Trusck.

Conclusion: democratisation of native forest tenure is crucial for the sustainable and equitable management of these lands, involving and benefiting local communities and environmentally conscious retail investors and donors. These two groups can play an important role in promoting the democratisation of native forest tenure by investing in community-led forest initiatives, supporting organisations that defend community forest rights, engaging in policy advocacy and lobbying, and using blockchain technology to ensure traceability of funds and co-ownership of land for the benefit of the green investor community or local communities. By taking these steps, environmentally conscious investors and donors can contribute to the conservation of indigenous forests and the well-being of local communities.

Sources:

• “The State of the World’s Forests 2020” (Food and Agriculture Organization of the United Nations, 2020)
• “Community forestry in practice: Case studies from Asia, Africa and Latin America” (Food and Agriculture Organization of the United Nations, 2009)
• “The Role of Civil Society in Advocating for Community Forest Rights” (World Resource Institute, 2018)
• “Blockchain for Sustainable Supply Chain Management: A Systematic Literature Review” (Sustainability, 2019)
• “La democracia de la tenencia de bosques nativos en el contexto de la conservación ambiental” por el Instituto Nacional de Conservación Ambiental de Argentina.
• “Die Stärkung der demokratischen Verwaltung von Waldflächen im Kontext von Umweltbewusstsein” von der Deutschen Gesellschaft für Nachhaltige Forstwirtschaft.
• Asset tokenization does not provide fund traceability, Bimount, February 2023