Banks and financial institutions urged to adopt new risk management tool to
assess forestry investments

TORONTO, May 7 /CNW/ - Increased focus on the sustainable management of the world's forests and the associated risks and opportunities posed for the financial sector has led PricewaterhouseCoopers (PwC) and the World Business Council for Sustainable Development (WBCSD) to develop the Sustainable Forest Finance Toolkit.

The Sustainable Forest Finance Toolkit provides, for the first time, guidance for financial institutions to better manage risks related to investments in forestry and industrial projects that have forest impacts, such as agriculture. It contains information on sustainable forestry standards and is meant to help frontline banking staff proactively address forest loss and illegal logging activities when considering loan applications.

The toolkit provides guidance in four key areas:

    
    -   New client assessments: evaluating the sustainability performance of
        forestry and high forest-impact clients by using a client evaluation
        decision tree, interview template and due diligence for higher risk
        clients, including briefings which reference key risks and
        opportunities in the forest, paper and packaging sectors
    -   Portfolio management: assessing legacy clients within the bank's
        "forest footprint" portfolio
    -   Policy development: designing a clear and pragmatic forest finance
        policy
    -   Procurement: illustrating a forestry procurement policy and links to
        additional resources
    

"Currently, banks and other financial institutions invest US$150 billion in the global forestry sector and many more billions are invested in infrastructure and land use change projects that directly impact forests. The Toolkit recognizes the scale of the sustainability challenges facing the finance sector," says Björn Stigson, President of the World Business Council for Sustainable Business Development. "Forest loss and degradation, especially in developing countries, is a pressing issue that all stakeholders, including the finance sector, must address."

Forests currently cover 30% of the world's land area, or 3.85 million square kilometres, but only 10% of production forest is independently certified for sustainability. Forest degradation is one of the most pressing environmental issues, impacting the planet's climate, biodiversity and water resources. Getting the balance right between economic development and the sustainable management of forests has proven difficult, and the expansion of certified sustainable forestry has been slow outside North America and Europe.

"Globally, deforestation continues at an alarming rate of up to 130,000 square kilometers every year," says Bruce McIntyre, partner and national leader of the Forest, Paper and Packaging industry practice for PwC in Canada. "Fortunately this is not a significant issue in Canada, which has the largest area of certified forests in the world. The challenge for the financial sector is in developing consistent and effective policies, and monitoring procedures to encourage sustainable forestry, and the toolkit provides a framework to support this goal."

Developed by PwC, the Toolkit has undergone extensive stakeholder review, involving leading global banks, forest industry companies, NGOs, certification bodies, governments, investors, asset managers and multilateral institutions. It has the support of the WBCSD's Sustainable Forest Products Industry Working Group, comprised of leading global forest products companies. The Toolkit will be regularly updated to reflect evolving trends and drivers, including climate and forest policy changes.

Björn Stigson and Bruce McIntyre will be speaking more about sustainable economic development and Transformation through Innovation in the forest and paper industry at the PwC 23rd Annual Global Forest & Paper Industry Conference, taking place Tuesday May 11, 2010 at the Westin Bayshore & Marina in Vancouver, B.C. Accredited media are welcome to attend the full day conference. To pre-register, contact Jim Nelson: [email protected], Tel: [phone]. Pre-registered media can pre-book 15 minute 1:1 interviews with PwC spokespeople. Full conference and speaker details can be found at: www.pwc.com/forestconf10

The Sustainable Forest Finance Toolkit can be downloaded from: www.pwc.co.uk/forestfinancetoolkit.

About PricewaterhouseCoopers LLP

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,300 partners and staff in offices across the country.

"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate legal entity.

About the World Business Council for Sustainable Development

The WBCSD is a global CEO-led coalition of over 200 leading international companies with a shared commitment to sustainable development, based in Geneva. For more information, please visit: www.wbcsd.org.

For further information: Jim Nelson, Tel: [phone], Email: [email protected]; Kiran Chauhan, Tel: [phone], Email: [email protected]; James Griffiths, Tel: [phone], Email: [email protected]