methodology
This project assesses the financial services received by over 300 companies directly involved in the beef, soy, palm oil, pulp and paper, rubber and tropical timber (“forest-risk sector”) supply chains, whose operations may impact natural tropical forests in Southeast Asia, Central and West Africa, and Brazil.
Financial Databases Bloomberg, Refinitiv (formerly known as Thomson EIKON), TradeFinanceAnalytics, and IJGlobal), company reports (annual, interim, quarterly) and other company publications, company register filings, as well as media and analyst reports were used to identify corporate loans and underwriting facilities provided to the selected companies for the period 2013-2020 (April). Investments in bonds and shares of the selected companies were identified through Refinitiv, Thomson EMAXX and Bloomberg at the most recently available filing date in April 2020.
The BNDES Transparency portal and Brazil’s Central Bank portal were used to identify additional financial flows to forest-risk companies in Brazil.
This research provides a deal-level dataset of specific relationships between selected companies and any linked financial institution. Of the more than 300 companies researched, only 230 companies had identifiable financing where the financier, financing amount, and start date were known within the period of study.
Companies with business activities outside of the forest-risk sector had recorded amounts reduced to more accurately present the proportion of financing that can be reasonably attributed to the forest-risk sector operations of the selected company (see Adjusters). Where available financial information did not specify the purpose of investment or receiving division within the parent company group, reduction factors were individually calculated by comparing a company’s forest-risk sector activities relative to its parent group total activities. Further adjusters were calculated for companies operating in multiple geographies within the scope of this research.
The commercial banks identified in this study were evaluated to determine the strength of any publicly available policies relevant to tropical forest-risk sector investment decision-making, and subsequently scored against a range of criteria incorporating environmental, social and governance standards. Each of the major banks was allocated a score on the scope of its policies and its environmental and social standards. The Forests & Finance Bank Policy Assessment Methodology is based on the Fair Finance Guide (FFG) with a focus on the forest-risk sector. See the Bank Policy Matrix 2018 for more details of the scoring criteria and compiled scores.
The data and assessments presented in this website have not been provided by or authorized by any of the financial institutions or clients concerned. While every attempt has been made to research and present data and assessments accurately and objectively, it is difficult to guarantee complete accuracy. This is not least because of the lack of consistency and transparency in how financial institutions and forest-risk sector clients record key financial and company information. Where there has been ambiguity in source information of financial services, the authors of this website have acted cautiously, resulting in a likely underestimation of the true amounts of finance involved. The authors are committed to correcting any identified errors at the earliest opportunity.
Timeline of updates to the database and bank policy assessments:
Sept 2016: First version of bank policy assessments and database launched, assessing financial services provided to 50 companies for their forest-risk sector production and primary processing activities.
June 2017: Database expanded to cover over 180 companies. Methodology revised to cover entire forest-risk sector supply chains, including trading and manufacturing
December 2018: Database updated and expanded to cover over 190 companies. Bank policy assessments completed for over 30 banks with updated ESG assessment criteria.
November 2019: Dataset updated with financing information for over 100 companies up to August 2019.
September 2020: Dataset updated and expanded to cover not only Southeast Asia, but also Central &West Africa, and Brazil. The new dataset includes two additional sectors: beef and soy, and now covers over 300 of the largest forest-risk commodity companies. (see Methodology).
