Scaling nature finance now The opportunity for investors in Brazil and beyond

Empowering the people that protect nature is critical for effectively protecting nature. Indigenous Peoples are essential to meeting our climate goals, and direct access to finance for Indigenous Peoples is a powerful way to enable effective nature and climate action. While representing a mere 5% of the global population, Indigenous Peoples’ lands include more than one-third of the world’s intact forest landscapes.51 Empowering Indigenous Peoples But less than 1% of total climate finance is currently reaching Indigenous Peoples. Indigenous Peoples are also among the most vulnerable communities on the planet, with poverty rates typically two to three times higher than the global average. Genuinely valuing and integrating the ecological knowledge of Indigenous Peoples will lead to a more just and effective approach to conserving the planet’s biodiversity. Indigenous-led funds like the Terra do Meio network have proven to be an effective vehicle to build financial flows to Indigenous Peoples and protect nature. As the market for Nature-based Solutions grows, such approaches must be prioritized and scaled. The Brazilian Forest Code is a legal framework that regulates the use and conservation of forests in Brazil. It sets guidelines for land use, requiring property owners to maintain a certain percentage of their land as forested areas, known as Legal Reserves.What is the Brazilian Forest Code? The code aims to protect native vegetation, promote sustainable land practices, and restore degraded lands. It plays a crucial role in balancing economic development with environmental conservation in the country.52Impact The Terra do Meio Network is an Indigenous Peoples and Local Communities alliance in a critical region of the Amazon rainforest. The Network aims to unlock the power of local knowledge at scale by developing a ‘market aggregator’ for an association of trading hubs  across the region. The hubs operate on a voice and vote model with clear price and purchase guarantees. The Network has developed equitable and sustainable value chains for ‘socio-bioeconomy’ products that protect  and value natural ecosystems and in recent years has consistently generated over R1,000,000 annual revenues from trading these products. With 17 trading hubs, the Network covers a wide range of territories and peoples, including 10 indigenous lands and 5 conservation units. They trade with over 20 buyers including major retailers such as Natura and Lush, selling a range of major commodities including Rubber, Brazil Nuts and Cassava to name just a few. Impact Established in 2020, Podáali is an innovative community fund created, designed and managed by Indigenous Peoples. It was developed after more than two decades of cross community discussions, led by the Coordination of Indigenous Organizations of the Brazilian Amazon (COIAB) , which represents 160 different Indigenous groups. It aims to channel finance directly to Indigenous Peoples in order to provide long-term protection of Indigenous forests and lands as well as the climate services they provide. By making these direct connections, it “provides a bridge between traditional knowledge and new technologies to optimize the agroforestry systems used by Indigenous Peoples which not only allow them to preserve the forest, but also to create resources for their communities” says Valéria Paye, the Executive Director of the Podáali Fund.As of early 2024, the network estimated it has established 20 socio-bioeconomy products and services and directly benefited 5,000 Inhabitants and ~600 families. To learn more visit The Nature Conservancy website , The Health In Harmony website , and the Instituto Socioambiental YouTube Channel . Growth trajectory The network has established itself as a socio-bioeconomy hub for traders, local organizations and associations of IPLCs that has been steadily gaining scale. It is set to further expand its reach and impact in the coming years, by increasing dialogue with the federal government and introducing new funding models such as payments for Territorial Services. Growth trajectory Although in the early stages of development, the fund is supported by major partners including The Nature Conservancy, and has secured an initial injection of more than USD$3m from the Tenure Facility. The scope of the fund underlines its potential for impact. It covers more than 400 thousand Indigenous People, on around 100 million hectares (23% of the entire Brazilian Amazon) and has contact with more than 114 groups of Indigenous People in voluntary isolation. See sources and learn more at the Podáali website , the Tenure Facility website , and the Margaret A. Cargill Philanthropies website .Terra Do Meio Network Market aggregators unlocking localization at scale Podáali – The Brazilian Amazon Indigenous Fund A new fund created by and for Indigenous PeopleCase study Case study Impact The Responsible Commodities Facility (RCF) is an initiative that creates financial incentives for farmers to protect native vegetation – ultimately helping to meet the growing international demand for zero-deforestation supply chains. Farmers can access loans with significantly discounted interest rates (up to 20%) if they demonstrate adherence to a set of criteria. The criteria is pegged to the Brazilian Forest Code (see box), and also requires that the financed cultivation area must have been cleared before January 1, 2020. Farmers must demonstrate that no conversion of additional areas of native vegetation occurs in the area during the term of the Facility. The RCF is targeted at areas of high risk of deforestation, so that its impacts have the maximum additionality. The impacts of the RCF are monitored and independently verified by different parties, to ensure consistency, independence and transparency of results.So far, the program has funded farmers who together conserve 11,300 hectares of surplus legal reserve. The program has conserved carbon stocks of 21m tons CO 2e, all while it is supporting the production of deforestation and conversion-free soy (having produced 42,000 tons of DCF soy on its first main crop season). Growth trajectory The scheme has won backing from a number of major international food companies – including Tesco, Sainsbury’s, Waitrose, Santander, Rabobank, and the Agri3Fund. With this buy in, it expects to grow the number of hectares under protection tenfold by 2025. See sources and learn more at the SIM website and IFACC 2023 Market Report . The Responsible Commodities Facility (RCF) Incentivizing deforestation- and conversion -free production Case study 26 Scaling nature finance now 27Foreword References 02 The Brazilian market – accelerating now03 Unlocking the next phase of growth in Brazil and beyond Executive summary01 The opportunity and the imperative