Mundemba, Ndian, SW Cameroon, November 16, 2024:
The Lower Guinea Forest Ecosystem, located in the coastal and central parts of West and Central Africa, is a biodiversity hotspot of immense global significance.
This variable relatively smaller ecosystem (compared to the much larger Congo Basin) spans parts of Benin, Nigeria and Cameroon, and to a lesser extent, Equatorial Guinea, Gabon, and the Republic of Congo. It is home to a very rich array of endemic species, many critically endangered (red colobus, forest elephants, drills, pangolins..) and provides critical ecosystem services including carbon sequestration, water regulation, and soil fertility.
Due to higher population density (compared to the Congo Basin), migrations due to socio political crises, and nearness to the coast and markets, the Lower Guinea Forest Ecosystem is under immense anthropogenic pressure.
Agricultural expansion, particularly the rapid spread of oil palm plantations both industrial and small holders, is a major source of pressure.
In light of this, large oil palm agro-industries have a crucial opportunity to contribute towards conservation efforts while also benefiting financially from sustainable practices.
1. The Vulnerability of the Lower Guinea Forest Ecosystem
The Lower Guinea Forest Ecosystem is unique in several key respects that make it both ecologically valuable and vulnerable:
· High Endemism:
The ecosystem hosts an extraordinary level of endemism, with many species found nowhere else on Earth. For example, the Cross River gorilla (Gorilla gorilla diehli), the Nigerian-Cameroon red colobus monkey ( Piliocolobus preussi ) the chimpanzee ( Pan troglodytes ellioti ) are critically endangered and rely on these forests for survival.
Over 30% of the plant species in the region are endemic to the area, underscoring the irreplaceable value of the forest's biodiversity.
· Small Size and Fragmentation:
Unlike larger, more intrinsically resilient forest ecosystems, the Lower Guinea Forest is fragmented and relatively small in size.
This fragmentation, primarily driven by agricultural expansion, reduces the ability of species to move between forest patches, increases edge effects, and accelerates the loss of biodiversity.
· Pressure from Agricultural Expansion:
Oil palm production is one of the main drivers of land-use change in the Lower Guinea Forest.
The oil palm industry alone accounts for significant portions of deforested land, with estimates suggesting that oil palm plantations contribute to about 3% of total deforestation in Central Africa. Between 2000 and 2015, oil palm plantations in the Congo Basin (including the Lower Guinea Forest) expanded by over 100,000 hectares, and this expansion shows no signs of slowing.
· Disproportionate Agro-Industrial Presence:
The Lower Guinea Forest is home to some of the largest oil palm agro-industries in the region. Companies such as CDC, PAMOL, SGSOC lease are heavily invested in the area, with large-scale plantations spanning thousands of hectares. While these plantations provide significant economic benefits, they also have detrimental impacts on local ecosystems and communities.
2. The Opportunity for Sustainable Financing
Given the critical ecological status of the Lower Guinea Forest, it is essential for large agro-industries to invest in sustainable practices that mitigate their environmental impact.
Sustainable financing mechanisms, particularly through green certification of oil palm products, offer a practical and financially viable approach to balancing economic growth with environmental stewardship.
· Green Certification: A Path to Increased Revenue
Green certifications, such as those provided by the Roundtable on Sustainable Palm Oil (RSPO), offer oil palm producers the opportunity to access premium markets while promoting sustainable agricultural practices.
RSPO-certified oil palm products have seen growing demand, particularly from European and North American markets, where consumers are increasingly seeking products that align with environmental and social sustainability criteria.
· Market Premiums:
Certified sustainable palm oil can command a price premium over non-certified products. In the global markets, RSPO-certified palm oil often fetches prices 10-15% higher than conventional palm oil, reflecting increasing consumer preference for sustainably sourced products.
This price differential represents a significant opportunity for oil palm producers to boost revenue margins.
· Access to New Markets
As sustainability becomes a more significant factor in corporate procurement decisions, companies are increasingly choosing to source certified sustainable palm oil.
Large retailers like Unilever, Nestlé, and IKEA have committed to sourcing 100% RSPO-certified palm oil, opening a vast market for certified products.
These companies are also often willing to pay a premium for sustainably produced palm oil, thus creating additional financial incentives for producers to invest in sustainability.
· Financial Viability of Conservation Financing
The funds generated through green certification can be reinvested into conservation initiatives that preserve the biodiversity and ecosystem services of the Lower Guinea Forest.
For instance, a portion of the premiums earned from RSPO-certified products could be allocated directly to forest protection, food security in biodiversity rich areas, reforestation, and biodiversity conservation projects.
· Offsetting Deforestation
A study by the RSPO in 2020 estimated that oil palm plantations in certified schemes had reduced deforestation by up to 30% in regions where certification was implemented.
This reduction in deforestation, directly helps mitigate the loss of critical ecosystem services, such as carbon storage and water filtration.
· Biodiversity Protection
Large-scale conservation efforts, such as the creation of biodiversity corridors and the protection of high-value conservation areas, can be funded through sustainability premiums.
In Indonesia, for example, oil palm producers that adopted green certifications contributed millions of dollars to local conservation programs, which have helped restore key wildlife habitats.
· Cost-Benefit Analysis
The financial benefits of green certification, including higher premiums and increased market access, can offset the costs associated with adopting sustainable practices. In some cases, companies that have embraced sustainability have reported significant long-term cost savings due to improved soil health, better water management, and enhanced pest control, all of which result from reduced environmental degradation.
· Long-Term Business Sustainability
Beyond immediate financial gains, sustainable financing offers oil palm producers a pathway to long-term viability in an increasingly environmentally-conscious market.
Key advantages include
· Climate Resilience:
Healthy ecosystems such as forests play a critical role in regulating climate patterns and reducing the impacts of climate change. By investing in forest conservation, oil palm companies can help ensure the resilience of local ecosystems, which, in turn, support the sustainability of their agricultural operations.
· Corporate Reputation
Companies that prioritize sustainability and contribute to conservation efforts enjoy enhanced corporate reputations, which can be a critical factor in attracting investors and consumers. In fact, companies that integrate environmental, social, and governance (ESG) factors into their operations have seen a 5-7% increase in stock value over the past decade, as reported by financial analysts.
· Access to Climate Finance
Oil palm producers that commit to sustainability may also be eligible for climate financing, including carbon offset mechanisms, where companies receive financial incentives for reducing emissions and protecting forests. With carbon credits becoming an increasingly valuable asset, this represents an additional revenue stream for companies that contribute to ecosystem conservation.
Conclusion
“A Win-Win Approach for Conservation and Industry”
The Lower Guinea Forest is a critical ecological asset facing significant threats from agricultural expansion, particularly from oil palm plantations. However, by embracing sustainable financing models, particularly through green certification, oil palm producers can not only protect vital ecosystem services but also increase their revenue margins and long-term business viability.
Through green certification, oil palm companies can tap into premium markets, boost their reputations, and secure long-term sustainability while also contributing to the protection of one of the world’s most biodiverse and ecologically significant regions.
In this way, sustainable financing represents not just an opportunity for conservation but also a strategic business move that ensures the continued profitability of oil palm agro-industries and the preservation of the Lower Guinea Forest for future generations.
Korup United
November 2024.
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