SDG 15 – Life on Land

An increasing number of animal and plant species are dying out. The International Union for Conservation of Nature (IUCN) Red List indicates that over 45,000 species worldwide are currently critically endangered. Without decisive action, this is the beginning of a species loss on a global scale.

This makes it necessary to create and protect conservation areas, especially in “biodiversity hotspots” which are primarily found in developing countries and emerging economies. However, as these are countries like the Democratic Republic of Congo, Namibia, Madagascar, Ecuador and Laos, there is still a significant financial shortfall. Earmarking more protected areas – currently only around 17% of rural areas are protected, with some protection only existing on paper – and protecting the existing areas effectively and equitably, requires additional funds which are sufficiently secure so that their use can be planned.

KfW is working on this. It supports a range of nature conservation funds such as the Caucasus Nature Fund and the Community Conservation Fund of Namibia as well as several environmental foundations and international NGOs to identify new areas and to better manage existing conservation areas, for example in West Africa. This enables them to protect flora and fauna effectively while simultaneously ensuring that local people are sufficiently involved in using conservation areas.

KfW has declared its intentions to involve more private investors than previously. It can thus use the limited development cooperation funds to open up new sources of financing for conservation. It was for this reason that KfW on behalf of the German Federal Government set up the Legacy Landscapes Fund (LLF), which began its work in spring 2021. The fund supports areas in developing countries in which biodiversity is high but financial resources are scarce. This will make it possible to safeguard a good amount of the biodiversity that is vital for all of humankind. Its goal by 2030 is to fund at least 30 sites for 15 years or more so that protected areas can do their job properly and truly protect nature. The fund’s special feature is that, in addition to public donors, private actors such as charitable trusts and companies are also involved. This ensures that more funds can be mobilised for conservation than would otherwise have been the case.

At the end of 2022, the LLF's funding portfolio comprised 15 protected areas on three continents.

In total, KfW finances terrestrial nature conservation areas in 77 countries on behalf of the German Federal Government, with a total area of more than 1.8 million square kilometres - an area more than five times the size of Germany. Its activities focus on Latin America and Africa.

Forests perform many important ecological tasks. As the “lungs of the planet” they supply oxygen, regulate the climate, protect against erosion, store drinking water, produce valuable raw materials, food and medicinal products, cushion the effects of storms and enable endangered species to survive. In rural parts of many developing countries, the forest is also an important economic factor that enables people there to survive.

People have been transforming forested areas for millennia, usually for agricultural purposes. In the recent past, however, this practice has taken on extremely dangerous proportions, not least in relation to climate change, because forests play a key role in limiting global warming. About 30% of human greenhouse gas emissions are absorbed and stored by ecosystems, especially forests, oceans and peatlands. Forests are therefore particularly important carbon sinks, but in recent years the deforestation rate has been estimated at 10 million hectares annually.

As the originator of the concept of sustainability over 300 years ago (the term originally came from the German forestry industry), Germany is particularly involved in forest conservation. This takes various forms. On the one hand, there are nature conservation areas which are highly important in fighting deforestation and conserving biodiversity. However, the interests of people and local users must not be forgotten in the process. Nature conservation can only work in the long term when both people and nature benefit in equal measure. It is about conserving forests and managing them sustainably. KfW contributes to the protection of over 74 million hectares of forest and has a diverse portfolio of almost EUR 3.3 billion (as of the end of 2023), covering various types of projects.

It also promotes the REDD approach (Reducing Emissions from Deforestation and Degradation), for example. The principle here is that climate and development funding is only provided if partner countries can demonstrate that they have reduced greenhouse gas emissions through sustainable use and combating deforestation.

KfW also promotes sustainable management of existing forests, especially in Asia and Latin America. For example, the Indonesian-German forest programmes were developed to address the problem of deforestation and slash-and-burn clearance. These programmes aim to develop and implement sustainable forest management methods and protect natural habitats. In Paraguay, KfW also promotes the management of such protected areas with the involvement of the local population.

Another important aim of KfW is to restore degraded tree-rich landscapes and forests which have been cleared. One concept in this area is “ Forest and Landscape Restoration” (FLR). It combines the ecological functions of the forest with its productive use, from which the local population benefits, e.g. through higher incomes.

Alongside forest and nature conservation, new economic practices are needed to avoid further endangering natural resources. Agriculture in particular is considered a threat to biodiversity conservation. The practice of clearing more and more forests for agricultural land is no longer sustainable. Currently, up to 80% of global deforestation of tropical rain forests is due to agriculture; resource depletion for timber extraction or mining and land speculation are also significant drivers.

In addition to forests, other valuable ecosystems such as wetlands and savannahs are also being destroyed. And with them, an important part of biodiversity is disappearing. To reverse this trend, agriculture in particular, but also the general economy, must undergo a transformation towards more sustainable forms of production, taking into account the finite nature of natural resources. Consumption patterns – especially in the Global North – also need to change in order to reduce the pressure for land expansion. This requires incentives and capital.

KfW sees itself as a driving force in this regard; it is supporting this change in land use and agriculture with targeted programmes. For example, it promotes sustainable and agroecological cultivation and production methods in India, as various cultivation systems such as agroforestry systems or mixed crops contain significantly greater plant and animal diversity than monocultures. Soil and erosion control also supports the preservation of biodiversity and ecosystem functions at landscape level.

The eco.business Fund was established in 2014 on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) as a particularly innovative example. Through green credit lines, it promotes economic activity which contributes to the sustainable use of raw materials and the preservation of biodiversity. It started its work in Latin America and the Caribbean, where it focuses on four areas: agriculture, forestry, eco-tourism, fisheries and aquaculture. It was so successful there that in late 2019 it was able to expand to include Africa. Since its founding, the fund has contributed, among other things, to the sustainable use of almost 1.2 million hectares of land.