Green Finance: The Zero Deforestation Learning Series

How can green finance enable the transition to deforestation-free supply chains? Climate & Company, in collaboration with the Team Europe Initiative (TEI) and experts from international organisations, think tanks and financial institutions explored this question in the lastest Zero Deforestation Learning Series. We looked at the role of different  financing solutions for implementing the EU Deforestation Regulation (EUDR).

Opening remarks were given by Itzayana Tlacuilo (Advisor, TEI Project GIZ), who set the stage by emphasizing the need for accessible financial mechanisms to support smallholders and companies in meeting EUDR requirements. 

Insights from Climate & Company 

Two Climate & Company experts shared tools and approaches that can help operationalise deforestation-free finance: 

• Kristina Lyadskaya, Associate Expert, presented the Building Blocks approach for developing EUDR-aligned (deforestation-free) financing solutions for smallholders. This framework provides a structured way to identify and design financial instruments that balance compliance with inclusivity and scalability. 

• Enzo Bernardinelli, Associate Expert, introduced the Financial Solution Database, a growing repository of practical examples and case studies of green finance instruments relevant for deforestation-free transitions. The tool aims to support practitioners and policymakers in identifying proven financial solutions that can be adapted and scaled. You can access the data base here. 

Together, these inputs provided a clear picture of how financial innovation can bridge the gap between regulation and real-world implementation. 

Various experts shared knowledge and examples on how financing mechanisms can support forest protection goals

• Gerard Rijk (Profundo) – on the financial impact of EUDR compliance on EU companies and consumers. 

• Alexandra Teixeira (IFAD) – introducing CompensAction, a Payment-for-Ecosystem Services program that incentivizes sustainable land management. 

• Noura Hanna (Solidaridad Network) – on climate financing for smallholders and the role of blended finance models. 

The session was facilitated by Sandra Kaul (Kiwiblau), who guided the discussion through interactive activities and reflection moments. 

The role of green finance to enable the transition to deforestation-free supply chains: Our key Takeaways 

• Financial innovation is central to achieving EUDR compliance while ensuring that smallholders remain part of sustainable supply chains. 

• Data-driven frameworks, such as the Building Blocks approach, help financial institutions translate complex regulations into actionable investment strategies. 

• Collaboration between regulators, financiers, and local implementers is essential to balance compliance, risk mitigation, and equitable access to finance. 
• Practical tools like the Financial Solution Database and initiatives like CompensAction demonstrate that scalable, deforestation-free finance solutions already exist and can be adapted across regions. 

Explore other sessions of our Sustainable Finance Knowledge Journey: 

• Session 1: An introduction to sustainable finance and its connection to deforestation-free value chains, with a focus on key regulatory frameworks such as the EU Deforestation Regulation (EUDR) and Corporate Sustainability Due Diligence Directive (CSDDD). 

• Session 2: A discussion on regulatory frameworks for Sustainable Finance and the key tools for supporting smallholders and the transition into Deforestation-Free Supply Chains 

• Session 3:  A discussion to spotlight innovative financial mechanisms that are already supporting smallholders in Latin America and Southeast Asia to transition toward deforestation-free supply chains  

Whatch the recording of our latest session here.