Portfolio Management

Are you aware of the risks posed by the sustainability issues in your existing forestry portfolio?

Banks with significant forestry portfolios or exposure to regions with high levels of sustainability risk issues in the forestry sector need to pay close attention to the risks posed by the existing portfolio of forestry clients.This often poses a greater challenge than policy application for new clients, as banks are bound by existing client contracts and loan covenants.

An effective sustainable forestry policy requires a review of existing clients and the agreement with clients on actions to improve the performance where they do not meet the bank's updated standards.

The toolkit

The Sustainable Forest Finance Toolkit provides an illustrative high level approach to assessing risks posed by legacy clients and guidance on progressively bringing clients up to the standards required by bank policy. 

The three main components of the Portfolio Management section are:

• An illustrative framework for assessing the sustainability risks posed by existing clients
• Guidance on assessing client operations on a forest management unit basis or supply chain performance for logging and downstream clients
• Guidance on developing action plans with clients to improve their sustainability performance

How PwC can help

PwC has experience providing a range of sustainability services to leading financial institutions:

• Design and support implementation of integrated sustainability risk management frameworks
• Review bank forestry portfolios to identify key risks and opportunities
• Case study based workshops and programmes on sustainability risk management
• Develop resources such as country and issue briefings tailored to the bank's portfolio
• Advice on business opportunities related to sustainable forest financing, including carbon markets
• Assurance on progress made in the bank's policy implementation with legacy clients
• Bespoke integration of screening procedures into the industry recognised online risk management tool - the Sustainable Finance Toolkit

Forest, paper and packaging companies interested in improving their sustainability performance, please contact Chris Knight