At the COP26 U.N. climate conference in Glasgow, 141 countries committed to ending and reversing deforestation by 2030. A key signal was the $1.7 billion pledge from the Forest Tenure Funders Group, a group of governments and philanthropies aimed at advancing tenure rights of Indigenous Peoples (IPs), local communities and Afro-descendent Peoples (LCs) by increasing direct support.

 This is crucial for many reasons. One of them being: 17% of all forest carbon and 39% of global lands in good ecological condition are managed or governed by Indigenous Peoples.

 While global disbursements, in general, have risen, which we find encouraging, reforms to the multilateral financing system — the second largest source of relevant financing after bilateral governments — have yet to deliver on their promise to unlock greater access for nature stewards.  Two key problems persist:

First, funding is woefully insufficient. Global disbursements for Indigenous Peoples and local communities’ tenure rights from all sources average to an equivalent of just 0.5% of the $96 billion in climate finance flows from multilateral funds. Second, funding is not adequately reaching communities. Over the past thirteen years, just 3% of funding projects accounted for over half of disbursements, mostly channeled through third parties. Few rights-holder organizations received grants exceeding $1 million.

 To meet global biodiversity and climate goals, funding in support of Indigenous, and local community tenure rights and forest guardianship must accelerate and increase significantly from current levels. A deep transformation in partnerships — in the way multilateral funders work alongside Indigenous Peoples and local communities — is urgently needed.

 We, the authors, call for an enabling environment and profound cultural, financial architecture, and operational reform within these multilateral institutions. In doing so, we support and build on the calls of Indigenous Peoples’ and local communities’ networks for greater access to finance, recognizing the challenges and barriers they face. 

Here are key barriers to multilateral direct financing and the solutions we propose to enable faster and simpler access for communities:  

• Problems in approach: Indigenous Peoples and many local communities follow a holistic approach to nature conservation that frequently contrasts with the views of some multilateral organizations that take a segmented approach to programming and funding for development, conservation, climate action, and adaptation separately. This can result in blind spots, misperceived risks, and misalignment. Galina Angarova, Buyrat, aptly explains, “Indigenous life is not segmented, it is not siloed.”

Solution: Cultural transformation. This can be achieved by creating an enabling environment for different approaches. This can be done through staff immersion in communities, fostering critical reflexivity, and training multilateral fund staff to understand and engage with contrasting visions and different approaches to be incorporated into design and review. This will enable better adaptation to Indigenous Peoples’ approaches, methods of work, and local realities.  

• Problems in funding themes and eligibility: Funding often hinges on themes that do not align with community priorities or general, all-purpose needs. Thematic funding windows can also follow rigid annual cycles that communities, especially the most climate-vulnerable and those hardest to reach, can miss. Additionally, varying eligibility criteria and risk tolerance among funders create an uneven playing field for local entities. Many organizations face onerous legal documentation, require government no-objection letters, and need major upfront financial investments to gain accreditation. And when they do, their projects endure greater scrutiny, driving up transaction costs and thereby reducing their viability.

Solution: Establish dedicated windows and funding for strengthening capacities. Funding windows specifically for communities can enhance the reach and flexibility of financial support, allowing projects to integrate biodiversity and climate goals with the ecological knowledge and socio-cultural diversity of Indigenous peoples and local communities (e.g., Global Environment Facility’s Small Grants Programs).

In parallel, long-term funding for capacity strengthening can prepare organizations to become eligible while addressing donor perceptions of their risks. As communities elevate their capacities, donor risk categories can be adjusted, and instead of relying solely on paper reviews, on-site visits can be undertaken.

• Problems in applications and reporting: Applications are often lengthy and complex, conducted in languages and systems inaccessible to communities, and with due diligence requirements differing from those of Indigenous-led funds. Reporting obligations add further strain with burdensome and non-standardized requirements that often overlook Indigenous knowledge systems. Lengthy required narratives and reports in unfamiliar languages exacerbate these challenges, making it difficult for communities to meet donor expectations. This is not just a technical matter. As stated by Carlos Alberto Gaitan of the Organización Nacional de lo Pueblos Indígenas de Colombia (OPIAC) and on behalf of the International Indigenous Forum on Biodiversity (IIFB), “For Indigenous Peoples and local communities, it is important that their contexts and needs, their languages, are considered so that they can participate fully and effectively in the development of new initiatives in response to problems or in compliance with commitments to protect our lands and knowledge.”

Solution: Simplify funding processes and reporting protocols. This can involve streamlining funding frameworks, accreditation, and approval processes. This can be achieved by establishing simplified fiduciary standards, unified safeguards, and common gender policies across funds while reducing complex operational guidelines and third-party reviews for smaller entities. Additionally, reporting should be proportional to project size and capacity, allowing local groups to focus on execution.

The Climate Investment Funds’ (CIF) Dedicated Grant Mechanism (DGM) has implemented a participatory, flexible, and lighter-touch monitoring and reporting system. In Peru, DGM partner community Saweto titled over 400,000 hectares (about 980,000 acres) of native lands for 133 communities — more than all other governmental initiatives. Deforestation in titled native lands is lower than in communities without land rights.

• Problems in funding duration: Project funding timelines and disbursement schedules often fail to align with real community times and needs. Short-term funding cycles strain the ability to absorb funds and hinder long-term planning, including Free, Prior, and Informed Consent processes in keeping with the United Nations Declaration on the Rights of Indigenous Peoples and other international human rights instruments. Moreover, inflexible plans and restricted budgets prevent communities from responding to urgent crises like natural disasters. By the time grants are approved, communities may have shifted focus to other priorities.

Solution: Provide flexible, and responsive funding wherever possible. This can involve flexibility in a disbursement window and enable greater community autonomy, which can multiply the benefits of funding, and automatic deployment of funds during crises, enabling deployment to those most vulnerable to climate impacts.  And where more direct financing may not be possible, appropriate, or sufficient, provide flexibility to accredited entities that can act as trusted brokers (e.g., Wildlife Conservation Society’s support for the creation of the Community Fund for Forests in the Democratic Republic of the Congo and its support to create an Indigenous-led fund in Bolivia).

Broader society is now beginning to feel the existential threats that Indigenous Peoples and local communities at the frontlines have been combating for decades. The quadruple waves of biodiversity, climate, health, and inequity crises have disproportionately affected them from the small Pacific island of Kiribati to the Arctic. Supporting the conservation work of Indigenous Peoples and local communities at the ground level has to be an integral part of larger conservation, biodiversity, and climate financing initiatives supported by multilateral funding.

We therefore believe that unlocking financing proportional to the contribution made by Indigenous Peoples and local communities, including people of African descent, requires deep change and capacity strengthening among multilateral funders.  Additional points we suggest are:

Financial architecture alignment requires a clear division of labor based on the different comparative advantages of funds, reducing inefficiencies, and promoting inclusive decision-making within their governance structures.

And operational shifts can focus on co-developing flexible application processes and operational guidelines for more direct resource transfers to Indigenous Peoples and local communities led funds that better respond to local needs and understand conservation priorities to be embedded within larger socio-cultural priorities.

As we head to the U.N. biodiversity conference (COP16) in Cali this month, where financing for developing countries, Indigenous Peoples, local communities, and Afro-descendant Peoples take center stage, multilateral funders must urgently advance these necessary transformations. This is crucial to ensuring that the world’s leading nature guardians have world-class funding, enabling them to manage and protect their territories while safeguarding their rights and sovereignty.

Sushil Raj is the Executive Director of the Rights and Communities Global Program at the Wildlife Conservation Society. He is from the Ad Dharmi Dalit community in India and designed WCS’s Indigenous Peoples and Local Communities Advisory Committee to the proposed High Ambition Fund. He previously worked at the United Nations on Indigenous Peoples and minority rights, and spent several years in philanthropy.  He also served as a U.N. Special Procedures mandate holder on People of African Descent.

Minnie Degawan is a Kankanaey activist from the Philippines and a member of the International Indigenous Forum on Biodiversity (IIFB). She serves on the Convention on Biological Diversity Advisory Committee on Resource Mobilization, representing the Indigenous Caucus. She works with Indigenous Peoples organizations to ensure more support goes to the actual exercise of rights, and now provides advice to the Council of the FSC- Indigenous Foundation.

Rony Brodsky serves as Director of Indigenous- and Local Community-Led Finance at The Nature Conservancy, where she leads its Indigenous and local community financing strategy. Guided by TNC’s Voice, Choice, and Action Framework, her team focuses on advancing Indigenous rights, sovereignty, and equity for conservation and stewards a collaborative global portfolio of IP and LC innovating financing projects to scale. She is an economist and community banker by training.

Banner image: Indigenous women of Guatemala’s Polochic Valley are growing their businesses and saving money with the help of a program that’s empowering rural women. Image by UN Women/Ryan Brown via Flickr (CC BY-NC-ND 2.0).

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