The NGO Forest Coalition’s submission to the International Development Committee Inquiry on International Climate Finance 2026-2030 calls for increased direct funding for Indigenous peoples and local communities.
Evidence indicates that Indigenous Peoples and local communities are among the most effective stewards of tropical forests yet remain underfunded relative to their role in climate mitigation. Direct financing approaches have been shown to be both more efficient and more effective in supporting these communities, by reducing overheads and increasing the proportion of funding that reaches frontline actors.
This call comes in the context of severe cuts made recently to the UK’s International Climate Finance. These will have a disproportionate impact on Indigenous Peoples and local communities, and should be reversed. The aid cuts amplify worldwide aid cuts which have impacted civil society. We have seen civic space for organisations working on forest protection reduce.
Indigenous Peoples and local communities who protect tropical forests globally are calling for a shift towards direct, flexible finance models, with fewer intermediaries and greater autonomy, because these approaches are better aligned with delivering rapid, cost-effective forest protection.
We would like to see a target for the proportion of funding going directly to Indigenous Peoples and local communities, and annual, publicly-available reporting on this metric.
Research shows Indigenous territories are among the most effective forest protection systems globally, storing a significant share of irrecoverable carbon. Yet current climate finance systems channel only a small fraction of resources directly to them.
Evidence from long-term community forest partnerships shows that unconditional direct finance to Indigenous Peoples and local communities:
- delivers high impact per pound spent
- reduces transaction costs by minimising intermediary layers
- increases the proportion of funds reaching frontline actors
- strengthens territorial governance and long-term forest protection outcomes
Cool Earth, a member of the NGO Forest Coalition, has delivered direct finance to Indigenous peoples for over twenty years, transferring money to over a hundred thousand people and protecting over a million hectares of forest. Funds are delivered with minimal intermediaries and governed through existing Indigenous and community governance systems, which are already strong, functional, and legitimate.
Fern, another member of the NGO Forest Coalition, supports direct payments for forest stewardship in Liberia, with Liberian NGO Integrated Development and Learning. In this programme 50% of the budget reaches communities in cash, and 20% in creating income-generating opportunities. This is a radical departure from typical forest projects where under 10% is spent locally.
Direct finance significantly improves value for money by:
- removing intermediary and consultancy layers
- reducing administrative overheads
- increasing the proportion of funds reaching communities
- enabling flexible, locally defined spending decisions
UK taxpayers want to see government action on climate and nature. We want to see an increased commitment to International Climate Finance, transparent decision-making, greater accountability and increased support for indigenous-led initiatives.
Photo credit: Cool Earth. Ashaninka leaders walking in the Peruvian Amazon
NGO Forest Coalition 