Unlocking climate finance for Indigenous and forest communities in Guatemala and Mexico

Indigenous Peoples and local communities play a crucial role safeguarding forests. Their stewardship provides the ecosystem services that regulate climate and water cycles, stabilize weather patterns, and mitigate natural disasters such as severe storms, cyclones, and droughts. These services contribute to approximately 50% of the global GDP, according to the WEF.  

Despite their essential contributions, Indigenous Peoples and local communities have not been adequately included in or benefited from international climate and nature finance mechanisms. UNEP reports that in 2023, only 0.4% of total forest finance targeted projects with Indigenous Peoples and local communities.  

Changing this imbalance with forest communities 

As part of FSC’s work on sustainable finance, the project Unlocking Climate Finance for Indigenous Peoples and Local Communities seeks to bridge this gap. Beginning in Guatemala and Mexico, FSC is convening key stakeholders to unlock capital for Indigenous Peoples and local communities and grow responsible forest management with smallholders.  

“Local stewardship provides good environmental outcomes, but investing in forests is not only about carbon and biodiversity. It is also about securing sustainable livelihoods, preserving cultural heritage, and strengthening the climate resilience of the forest communities that depend on them,” said Michele Gonzalez-Mendia, Chief of Sustainable Finance for FSC Investments and Partnerships.  

One key deliverable of this project will be a tool for forest communities to access climate finance. They will be able to see the different opportunities that exist through government funding, corporations, or investors. The FSC Indigenous Foundation and other project partners are guiding the development of this tool.  

The project will connect to existing solutions such as FSC Forest Management Certification and FSC Verified Impact, which enables ecosystem services measurement and connects communities to markets that can reward them for their valuable work.  

Designing practical mechanisms in Guatemala 

Key actors convened in Guatemala from across the country and Mexico to co‑design practical mechanisms to unlock climate finance that rewards Indigenous and community forest stewardship, protects nature and its ecosystem services, strengthens livelihoods, and contributes meaningfully to climate action. Participants included: 

• The Association of Forest Communities of Petén (ACOFOP), stewards of the Maya Biosphere Reserve
• Ministry of Environment and Natural Resources
• National Council for Protected Areas de Guatemala (CONAP)
• National Institute of Forests (INAB),
• World Resources Institute
• World Vision
• Rainforest Alliance
• FSC Indigenous Foundation. 

Local forest community associations shared experiences and the Ejido Topia in Mexico shared best practices from their engagement with corporations. Participants discussed how we can address barriers to unlock climate financing for Indigenous Peoples and local communities through government engagement, collaborations, and partnerships with global facilities and joint initiatives.  

“All of these services contribute to mitigating the effects of climate change. That is why it has been deemed important to seek financial mechanisms and resources that effectively reach the groups that make forest conservation possible,” said Luis Pereira, Executive Director of FSC Guatemala.  “We are talking about equity, about justice, but above all about the importance — for our country, our region, and the world — of conserving our forests now and forever.” 

What is coming next 

The workshop in Guatemala is only the beginning of this project. By continuing collaboration with stakeholders, FSC will deepen understanding of climate finance flows relevant to Indigenous Peoples and local communities, including effective practices and operational mechanisms. Partners will co-design a tool to enable these communities to access and benefit from climate finance and strengthen institutional and community capacities to engage strategically with climate finance opportunities, and define ways to scale this approach to other countries and regions   

If you would like to get involved with this project, please write to financing@fsc.org.