Responsible forest financing for financial institutions
Tools & solutions for the finance sector
Benefits of responsible forest financeFinancial institutions that adopt a responsible forest investment policy have much to gain, including:
- Better client relationship through providing advice on environment and social issues.
- Ensuring that investments do not result in the clearing of high conservation value forests.
- Ability to manage financial (credit) and reputational risks for forest investments as the sector is perceived to be highly risky.
- Attract new clients concerned with corporate social responsibility (CSR) issues.
- Capitalize new business opportunities such as those generated from the drive towards a green economy.
- Increased international standing, especially for local financial institutions in emerging markets.
What is WWF doing to encourage responsible forest financing?We have been working with financial institutions since 2005 to develop responsible investment policies that address sector-specific investments impacting the forest industry.
We also help shape internal banking policies on how these institutions manage their responsibilities in safeguarding the environmental and social qualities of projects impacting forests.
To put all this in practice, we provide capacity building and training for frontline bankers to screen investments based on social/environment principles.
General criteria for financial investors in due diligence
- High Conservation Value – zero conversion of High Conservation Value Areas
- Labour – respect workers’ rights and welfare
- Community – recognize the rights of local and indigenous peoples
- Governance – reporting for transparency and accountability
- Environment, social and resource management – addressing impacts