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Five things companies need to know about REDD+ projects
17 April 2023

Five things companies need to know about REDD+ projects

7 minute read
Corporate climate action Project stories
Bastien Girod Head of Climate Solutions Europe

Communities living at forest frontiers stand to lose the most from climate change and deforestation: from cultural traditions to their livelihoods.

As we walk through the forest, baobabs appear like towering high-rise buildings. They seem out of place, as if they've been planted there solely for the largest of the elephants to eat their soft interior. Unusual sounds surround us; the orchestral hum of cicadas and small birds' early morning song mark the dawn of a new day. Despite the serenity, clues appear to remind us that we're far from alone in this forest: our guide puts his fingers to his lips and points out buffalo prints in the damp mud around a dried-up waterhole. We spy scratches in a twisted trunk which hangs over a pond teeming with water striders – the work of a frustrated leopard.

Far away from our desks for the next week, we're deep in the forest setting up a new REDD+ project. Being here is a reminder of the tremendous value REDD+ projects can enable, and the many challenges project developers face to preserve our forests.

REDD+ stands for Reducing Emissions from Deforestation and forest Degradation, where that “+" signifies the role of conservation, sustainable forest management and the enhancement of forest carbon stocks in developing countries. It is currently the only way to channel finance into forest conservation finance at any significant scale, and it is proving effective in protecting forests and biodiversity that could otherwise have already been lost. But like the drivers of deforestation and the forests themselves, REDD+ projects are complex and evolving. With approximately 10 million hectares of forest lost per year, we need to unlock the full potential of REDD+ and get the strategy right. Here are five things companies need to know when supporting forest protection projects.

1. Carbon finance is one of the only ways to fund forest and wildlife protection at scale.

First things first, secure access to finance is one of the biggest challenges that forest-owners and custodians face. This is because investments in land-based solutions are tricky; they typically involve small and aggregated deals, currency risks and complex ownership structures. Carbon markets offer a solution. They treat communities, farmers and land-owners as business partners and provide a results-based way to finance transformative practices that don't necessarily yield large financial returns but do lead to significant positive environmental and social impacts. South Pole has channelled millions of euros to forest and land-use projects in 39 countries.

2. Getting the baseline/foundation right is tricky but safeguards are in place, and projects are constantly improving.

Nature-based solutions are complex, pioneering and constantly evolving, and REDD+ is no exception. One of the most challenging parts of setting up REDD+ projects is developing a reliable baseline, which is the predicted level of deforestation that would occur if the project were not set up. When establishing a baseline, project developers model future deforestation rates using methodologies approved by certification standards, such as Verra. A similar area to the project is chosen as a reference, factors such as roads and population increases are built into the model, and satellite imagery is validated using on-site visits. The methodologies have feedback loops so they can be updated based on new insights, technological developments (such as drones and 3D imagery) and evolving best practices. However, despite the safeguards, there is always a degree of uncertainty when trying to predict the future.

One of the ways REDD+ methodologies can address this is with a self-correcting mechanism to adjust the number of carbon credits issued to match actual deforestation rates over the full lifespan of the project. In practice, this means that every six years – recently reduced from 10 years – a project must assess the actual deforestation rate in the reference area against the predicted deforestation rate used in the baseline. If the predicted and actual deforestation rates do not match, meaning too few or too many carbon credits have been generated, the difference is made up. South Pole is currently working on revising the baseline of the Kariba project; this will be one of the first ever REDD+ baseline “revalidations".

From 2025, Verra will require all projects to transition to jurisdictional baselines, which aim to go beyond project-level activities and instead create national deforestation levels against which projects can be measured. This top-down approach is designed to limit the potential discrepancy of project-level assessments. However, it is no silver bullet. Setting up these baselines will involve complex policy and technical issues that require significant capacity and expertise. Decisive and clear action is needed to provide developers with the ambition to set up new projects where they're needed most and give companies the renewed confidence to support them.

3. REDD+ projects must always involve local communities.

REDD+ projects have the potential to channel significant finance and support to communities at the forest frontier by building sustainable livelihoods and sharing the benefits generated by the project. For long-term success, free and informed consent of the project, on-going capacity building, and fostering local ownership of the project are crucial especially even when securing agreement, communicating updates and earning the trust of all stakeholders is challenging. For example, many rural communities that South Pole works with have neither computers nor phone signal.

An equitable and transparent benefit-sharing system is fundamental to the project, and should be clearly documented in the project documents that are approved by the certification standard. Once it has been agreed by all stakeholders, it also needs to be effectively monitored and evaluated with formal feedback and grievance processes in place to ensure that it is working as intended and that the benefits are being distributed and managed fairly.

4. REDD+ projects take large investments of time, money and technical know-how.

The idea of putting up a big fence and leaving a forest to stand on its own inside it could not be further away from how REDD+ projects work. To be successful and sustainable in the long term, REDD+ projects aim to change entire socio-economic systems that previously relied on cutting down the forest to a system that protects this forest. This is costly and each project operates in a unique context. As well as all the extensive modelling and technical information that needs to be carried out for a project to issue carbon credits under leading standards like Verra, there's a catch 22. A project can't benefit from carbon finance until it creates measurable impacts, but it needs the finance to start the activities. So, projects require initial investment to set up pilot activities and keep them going for the first one to three years that it takes to start issuing credits. For example, at the Predio Putumayo project, after almost three years of rigorous work, multiple site visits, and over 200 educational and social meetings involving thousands of people living in the project area, we are finally gearing up to issue the project's first REDD+ credits.

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A group of the traditional custodians of the Predio Putumayo Indigenous Reserve on one of their visits to the South Pole office in Medellín, Colombia to share their knowledge and receive technical training as part of the project set-up.

5. The benefits beyond carbon are often under-reported.

REDD+ projects address food security, biodiversity, and help create new sustainable livelihoods. They can also support women with becoming more independent and improve their access to basic services, like water, education and healthcare. While these attributes are necessary and important to quantify, measuring them remains challenging and still under-appreciated.

Fortunately, there have been recent developments to address these issues. Both Verra and the Gold Standard, leading certification bodies in the voluntary carbon market, have designed much-needed tools and even new standards to measure and certify co-benefits. But there is still a way to go in terms of monitoring co-benefits and working out how buyers best communicate these impacts.

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Maique Issufu, community engagement officer at a new REDD+ project, explains the basics of climate change to children in the local primary school. With the project funds, the community hopes to upgrade the school building and equipment.


The science is clear in telling us that deforestation needs to be eliminated by 2030, yet we are far away from that being a reality. Now is the time to engage in meaningful discussions and collaborate to improve inclusive and collaborative approaches to address forest loss.

Market mechanisms have tangibly demonstrated that they can be part of the solution to finally recognising the value of key ecosystem services, providing the communities protecting them with adequate resources, and putting a price on greenhouse gas emissions. REDD+ projects are designed using the most up-to-date scientific evidence and tools available today and have mechanisms in place that allow for constant improvement and updates as the science and best practice evolves. And this is exactly why we must invest in REDD+ projects – both financially, through carbon finance, but also in our collective efforts to develop and manage them to the highest standards as if a sustainable and prosperous future for all depended on it. Because it does.

By understanding REDD+ in more detail, companies can make well-informed decisions about which forest protection projects to support for maximum impact outside their value chain, without forgetting the need to urgently end deforestation within their supply chains and advocate for stronger policies.

Speak to our advisors to learn how your company can measurably contribute to preventing deforestation as part of your climate strategy.
Speak to our advisors to learn how your company can measurably contribute to preventing deforestation as part of your climate strategy.
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