UNHCR, the UN refugee agency, provides aid and protection to 100 million refugees, forcibly displaced communities, and stateless people globally. UNHCR currently has 20-million plus refugees under its mandate, assisting with their voluntary repatriation, local integration, or resettlement to a third country.

The UN refugee agency is launching the Refugee Environment Protection (REP) Fund, an innovative financing mechanism using the voluntary carbon market, of which Oliver Wyman is the first Corporate Founding Partner. The REP Fund aims to invest in refugee reforestation and clean cooking programs across developing countries and to mitigate environmental and social effects at scale, in a socially responsible and financially sustainable manner.

An estimated 20 – 25 million trees each year are deforested, mostly for cooking fuel, by refugees or displaced populations, which has multiple flow-on negative effects, including land degradation, conflicts between those forced to flee and host communities, and increased risk of violence as refugees must travel further and further to find fuel.

Oliver Wyman was engaged to help the UNHCR across two phases to firstly, identify a financially and environmentally sustainable model for reducing the negative environmental and ecological impacts of refugee situations, particularly deforestation, and secondly, design an operationalization roadmap to launch the fund.

To address deforestation, UNHCR will enhance tree planting and reduce the dependence on wood fuel by providing refugees with cleaner cooking options such as improved stoves and alternative fuels. But
doing so requires heavy financial investment, so, Oliver Wyman and UNHCR worked together to define an approach to raise initial capital as well as ensure financial sustainability to subsequently scale up the program. The key driver is supported by voluntary carbon offsets from industries who will benefit from tree planting. Oliver Wyman developed detailed and user-friendly financial models to validate the feasibility and determine the optimal project mix for the fund, directly informing their pilot portfolio.

Finally, Oliver Wyman supported UNHCR’s engagement with a wide variety of stakeholders, including implementation partners, carbon project developers, and funding providers. The carbon impact of these programs would be registered and verified to generate the first-ever large-scale, refugee-generated carbon credits. The sale of these credits would help replenish the Fund, allowing it to re-invest in new reforestation and clean cooking programs. The result is a sustainable new fund that will produce significant and lasting protection, energy/environment and livelihoods benefits for refugees and host communities.