Investors are increasingly putting an onus on incorporating environmental, social and governance (ESG) issues into their investment decisions, as there is mounting evidence that ESG performance is directly linked to company revenues and costs. Civil society organisations, governments, and private sector investors are looking for more information on how firms can effectively manage ESG issues facing private enterprises. The Sustainable Development Goals (SDGs) meanwhile provide a starting point, a common framework to anchor ESG considerations to decision making.
ESG issues for private enterprise include:
Typical ESG issues in forestry and agriculture sector
Many investor groups – like pension funds, NGOs and associations – have historically had objectives other than monetary profits, driving them to invest in firms that incorporate ESG considerations. And many investors view low ESG-standards as a weakness that exposes them to various risks – like strikes and negative publicity – that reduce future profits.
Among the many ESG issues related to environmental risk, climate change is the most pressing, given its global scale, immediate scope, and hazardous impacts. ESG considerations generally present a range of risks and also opportunities, all of which depend upon a company’s supply chain and overall exposure to environmental change. A company’s structure and scale is also a key factor determining its risk profile. A large conglomerate, for instance, may have a wholly different set of ESG considerations than a small and medium enterprise (SME), while consumer-facing brands may be less directly exposed to retail-related risk than would be business-to-business enterprises.
Indufor works with a range of private enterprises and investors addressing all manner of ESG-related issues. We are intimately familiar with several ESG frameworks (e.g. IFC and PRI), and have many years of experience developing tailor-made ESG solutions to address our clients’ needs.
We support private companies in the following areas:
- Measuring their performance across a suite of ESG metrics
- Make adjustments to strategy and operations where needed
- Publicly report on progress against specific ESG goals
- Conduct DD of suppliers’ compliance with ESG metrics
- Assessing ESG and value creation
In addition, we support investors in incorporating ESG in investment analysis and decision-making processes.
Examples of our projects relating to ESG assessments include:
- Forest loan due diligence for the European Investment Bank in China
- Social and environmental due diligence for a major pulp and paper company supply chain in Brazil
- Several due diligence exercises with global impact investors, for example, European climate and sustainability-oriented funds
- Several stakeholder saliency assessments for major pulp and paper companies in Latin America.
Area Experts
Blair Freeman, Head of Strategy and Sustainability with Indufor Asia Pacific (Australia), holds a Bachelor of Forest Science degree from the University of Melbourne and a Masters of Business Administration from the Australian Graduate School of Management.
Blair has over 20 years of experience in providing advisory services on forest policy, strategic planning, natural resource management and sustainable development, across Australia and the Asia Pacific region.
As project director and project manager, Blair has led a range of complex multi-disciplinary projects, including strategic reviews and program reviews relating to forest industry development, conservation and natural resources management. These projects have encompassed extensive stakeholder consultation and the provision of consulting advice to public and private sector clients, at executive and senior government levels.
Jeffrey Hatcher is the Managing Director of Indufor North America, which provides sustainability and investment consulting services to public and private clients. He previously served as Director of Global Programs for the Rights and Resources Group where he led analytical projects on forest tenure policies, climate change, and investment risks. He began his career at the FAO Emergency and Land Tenure services in Sudan supporting the implementation of the land policy provisions of the Comprehensive Peace Agreement and land restitution for internally displaced people. He holds an MBA with a focus on finance from INSEAD, an MA in Development Studies from the University of Pavia, and a BA in International Relations from the College of William and Mary.
Dr Sepul Kanti Barua has 15 years of professional experience in consulting, international development and research in climate change, environment, including forests and other natural resources, energy, agriculture and agro-commodities, trade and process industries. He holds Doctor of Science degree in Forest and Climate Change Economics from the University of Helsinki 2012 and was visiting doctoral scholar of environmental economics at Yale University, USA, in 2011. He has worked across Europe, Asia, the Americas and Africa. His work covers sustainability, climate change solutions such as carbon capture in forests, renewable energy, REDD+ for private companies and investors investment planning, green economy, and economic modelling, especially in the forest and environment sectors. He has an in-depth understanding of the broader global sustainability, climate and development agenda. Dr Barua has authored over 40 peer-reviewed journal articles, scientific monographs and technical/scientific reports, working papers, and numerous project reports.
He is fluent in English, Bengali, Chittagonian and has fair proficiency in Finnish.
Daphne Yin advises on policy, investment, business, and community-driven solutions to strengthen the resilience of rural landscapes, advance human rights, and ensure sustainable sourcing of forestry and agricultural products in North America, Asia, Africa, and Latin America. She leads Indufor North America's sustainability services, including work on environmental and social due diligence and monitoring, technical assistance, and program evaluation and learning. She has advised on enhancing environmental and social performance and standards along the investment/project cycle of forestry and agricultural programs for public sector, private sector, and nonprofit clients.
Daphne previously worked at Forest Trends where she coauthored industry-leading reports on forest carbon finance and voluntary carbon markets. Her other prior experience includes work on advancing sustainable land use and climate solutions with organizations including Project Drawdown, UNIQUE land use, and Environmental Financial Products. She holds a Master in Environmental Management from the Yale School of Environment and a Bachelor in Political Science from the University of Chicago.