Sustainable Forest Finance Toolkit - PwC

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FMU / supply chain performance 1 of 1Portfolio Mgt HOMEClient Status SummaryThere may also be a need to assess the legality /sustainability of different elements of a client’s operationson an FMU (for logging companies) and/or timber byvolume basis (for downstream operations) in order todetermine the proportion of the client’s operations that arecompliant and to identify areas where corrective action isneeded.The FMU / supply chain performance summary shouldtherefore split out and assess the client’s operations asneeded.Complete with details of:• For logging companies – active forest concessions and hectares covered.• For primary processors – factories and volumes processed.• For timber traders – volumes of timber traded.• For all – the percentages of business in each of the four categories.Status of individual forest areas under management, or timber processed and/or traded. AS AT DATE: XX/XX/2009No certification or action plan Action plan to legal (Ha/m 3) Action plan to sustainable / best practice (Ha/m 3) Certified sustainable / best practice (Ha/m 3)FMU 1FMU 2 etcArea / volume% of total area / volumeStatus of individual forest areas under management, or timber processed and/or traded. AS AT DATE: XX/XX/2010 etcNo certification or action plan Action plan to legal (Ha/m 3) Action plan to sustainable / best practice (Ha/m 3) Certified sustainable / best practice (Ha/m 3)FMU 1FMU 2 etcArea / volume% of total area / volumePage 70pwc
Reviewing an action plan 1 of 1Portfolio Mgt HOMETime-bound action plan – guidanceWhere clients are not compliant with bank policy, the bankwill want to develop an agreed-upon action plan for theclient to demonstrate that they are on the path tocompliance.An action plan should have a specific timeframe andmilestones to be agreed between the client and the bank.A key priority of an action plan may be the progression tocredible certification for a high proportion of the client’stimber.If certification is agreed to, the action plan provided to thebank should include details of a certification action plan(prepared by a credible external consultant if necessary),along with a summary of any Corrective Action Requests(CARs) identified in previous audits.The client’s operations should be subject to an annualexternal audit to verify any reported progress against theplan.If any of the client’s forestry operations are currentlyassessed as illegal, the period for the plan to achievelegality should be not more than three months. In addition,an action plan to stop illegal activities must be presented tothe bank immediately if these are evident.By the end of the plan period the client should achieve anagreed acceptable level, as evidenced by the client statussummary. For example the bank may set a minimum targetof 70% in the sustainable / best practice category, with amaximum of 30% in the legal category (not yet sustainable),and clearly no FMU / timber volume in the illegal category.This would apply to FMU / timber originating from countriesnot deemed to be lower risk under the client evaluationdecision tree.Client basicsA) Set out the period of the plan (2-5 years is conventional).B) Set out the aspiration of the plan, e.g. minimum 70% sustainable, maximum 30% legal, no illegal.C) Identify key milestones (six monthly or annual depending on the bank’s portfolio review process).D) Identify in turn how each of the key client performance requirements will be addressed by the plan:1 Management and Governance2 Resource Management3 Fibre Sourcing4 Eco-efficiency and Climate Change Mitigation5 Health and Safety6 Community Well-being & Stakeholder Engagement7 Human Rights and Labour Standards8 ReportingE) Include details of certification action plan and any associated CARs (until third-party audits are in place)F) Include details of annual external audits to be performed.Bank basicsH) Set out clearly the action that the bank will take if key milestones are not met.I) Explain the review process that will be undertaken, and the frequency of review.Page 71pwc
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Sustainable ForestFinance ToolkitTh
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Guidance for using the ToolkitThis
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How does economic development impac
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Challenges and problems associated
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Sustainability issues in the forest
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Costs and benefits of certification
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Costs and benefits of certification
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Page 32 and 33: Special places briefing note 1 of 4
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Page 60 and 61: Brazil - country briefing note 1 of
Page 62 and 63: Indonesia - country briefing note 1
Page 64 and 65: Malaysia - country briefing note 2
Page 66 and 67: Russia - country briefing note 2 of
Page 68 and 69: 2 Portfolio ManagementOne of the ha
Page 72 and 73: 3 Policy DevelopmentA carefully con
Page 74 and 75: Suggested Internal Bank ForestryPol
Page 76 and 77: Suggested Internal Bank ForestryPol
Page 78 and 79: 4 ProcurementIn 2007, the WBCSD and
Page 80 and 81: Sample procurement policy2 of 2Proc
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Page 86 and 87: Appendix 2: Client performancerequi
Page 88 and 89: Appendix 4: Consolidated duediligen
Page 90 and 91: Appendix 5: Acronyms1 of 1ASEAN Ass
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Sustainable Forest Finance Toolkit - PwC

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