Sustainable Forest Finance Toolkit - PwC

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Suggested Internal Bank ForestryPolicy and Guidelines1 of 4Policy Dev HOMEComponent Description of Component Content Options Reflecting Good PracticeRelevance to thebankContext and issuesScope of policyProvide an indication of the typesof business activities andsubsectors with which the bank iscurrently involvedA description of the nature ofenvironmental and social issuesin the forestry sector, and thecontext within which it operatesglobally, e.g. forthcomingregulation etcAn explanation of which parts ofthe bank’s operations the policyapplies, which sub-sectors, andwhether the policy also includesdownstream business activitiesIt is advisable to provide a brief description of the sector’s relevance to the bank, including the extent of the bank’s current involvement, for instancesub-sectors and nature of activities, e.g. forestry (plantations), forestry products (timber, palm oil, biofuels) and pulp/paper. The policy should stateclearly if there are any activities to which the bank is not exposed, e.g. pulp and paper. Also, if known, any forward-looking statements regarding thebank’s involvement in the sector could be included, as well as any forthcoming policy developments on related issues (e.g. biofuels, climate change etc)Policies may also need to cross reference each other, e.g. where timber is part of the supply chain for furniture manufacturers; how the biofuels policyreflects the climate change policy.The bank could outline where it sees opportunities for future engagement with the sector, e.g. new financing mechanisms such as forest bonds, andhow it plans to capture such opportunities.The bank could consider providing:• an outline of the sector-specific environmental and social issues, e.g. illegal logging, impacts of palm oil, biodiversity loss/destruction• an outline of the cross-cutting environmental and social issues, e.g. impacts on indigenous peoples dependent on forests, bribery and corruption,links to climate change• a description of any relevant regulatory developments, e.g. EU Biofuels directive• an explanation of how this policy links to the bank’s overall policy framework, and to other sector/issues policies and industry initiatives, includingthose to which they are party. For example, explain linkages to:• Equator Principles – IFC Performance Standards, e.g. biodiversity, indigenous peoples• Other relevant Sector Policies – Energy, Agriculture• Other relevant Issues Policies – Climate change, Human rights• If appropriate, reference could also be made with regard to the bank’s approach to high-risk countries, and how this links to the implementation ofthe Forestry Policy.A best-practice approach would be for the policy to be all-encompassing and therefore to include:• all lending activities and other forms of financial assistance,• debt and equity capital markets activities,• asset management,• trade finance, and• advisory work.Page 74pwc
Suggested Internal Bank ForestryPolicy and Guidelines2 of 4Policy Dev HOMEComponent Description of Component Content Options Reflecting Good PracticeClient performancerequirementsA description of any relevant:• Minimum Standards• Best practice• Voluntary / External initiatives• Independent Verification• ExclusionsThe bank should consider whether the Forestry Policy will include explicit exclusions/prohibitions and restrictions (e.g. illegal logging, operations inUNESCO World Heritage sites).In terms of specific client performance requirements, the bank should require its clients to:1 Management and Governance• Apply corporate policies and procedures to meet all applicable legal requirements• Work against corruption and illegal practices in all their forms.2 Resource Management• Use sustainable forest management in forests they own, lease or manage to provide fibre, timber and other forest products and valuableecosystems services.• Progressively and systematically introduce credible forest certification in the forests they own, lease or manage, against a time-bound plan.• Seek to conserve important biodiversity and cultural values (protecting ‘special places’) and to optimise the social, environmental and economicbenefits of managed forests.• Respect the lawful access and tenure rights of indigenous peoples and other community members directly affected by forestry operations.• Proactively seek to resolve any potential land disputes through dialogue, independent arbitration or the legal system.3 Fibre Sourcing• Ensure legal ownership of all fibre and wood utilised, and comply with all applicable laws in forestry operations.• Introduce credible, independently certified wood-tracing systems to address significant risks.4 Eco-efficiency and Climate Change mitigation• Promote renewable and efficient use of key resources (raw materials, water, energy and chemicals) and set and report on appropriate reductiontargets.5 Health and Safety• Strive for continuous improvement in occupational health and safety, and report accidents and injuries in the workplace.6 Community Well-being & Stakeholder Engagement• Contribute to economic health, employment and community service in the communities in which they operate.• Engage in, listen to and respond to local sustainability expectations and concerns related to their operations.7 Human Rights and Labour Standards• Respect all national laws for human rights and labour standards and, where these are lacking, use internationally agreed standards.8 Reporting• Publish a periodic report reflecting progress against these requirements.Banks may choose to further extend their policy reach and include additional requirements or restrictions such as excluding natural forest conversion. .Page 75pwc
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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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Illustrative - Management Interview
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Illustrative - Management Interview
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Page 24 and 25: Legality issue briefing note2 of 5N
Page 26 and 27: Legality issue briefing note 4 of 5
Page 28 and 29: Small scale and community forestent
Page 30 and 31: Sustainable ForestManagement briefi
Page 32 and 33: Special places briefing note 1 of 4
Page 34 and 35: Special places briefing note 3 of 4
Page 36 and 37: Planted forests briefing note 1 of
Page 42 and 43: Certification briefing note 1 of 7N
Page 46 and 47: Certification briefing note5 of 7Ne
Page 50 and 51: Pollution and EnvironmentalManageme
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Page 54 and 55: Local communities and indigenouspeo
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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 70 and 71: FMU / supply chain performance 1 of
Page 72 and 73: 3 Policy DevelopmentA carefully con
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
Page 82 and 83: Appendix 1: Special places 2 of 3De
Page 84 and 85: Appendix 2: Client performancerequi
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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