Project: Pulp Finance
The pulp finance working group aims to avoid irresponsible and risky investment in pulp mills. To achieve this, we engage with investors and others in the financial world to ensure that their decisions are well-informed and take into account all the relevant likely impacts of developments, from their fibre sources to their human rights implications.
We urge investors to adopt strong and public policies regarding investments in the pulp and paper industry. Our document Green Paper, Red Lines, sets out 14 basic requirements for pulp and paper industry finance.
Unfortunately, the 2017 report In the red, which scored the policies of large pulp financing banks against the Red Lines, finds that the banking sector does not have policies that are fit for purpose to avoid irresponsible investment in damaging pulp and paper projects and companies. In 2018 we will highlight several of the red lines and provide banks with additional information on social and environmental issues, to increase awareness of the financial and reputational risks they are exposed to due to their lack of policies.
The working group also engages with (potential) financiers on particular companies, especially on their plans to build new mills. New mills cost hundreds of millions, if not billions of dollars, and therefore companies need large financiers to realise these projects. It is important that they are well informed about the predicted social and environmental impacts of the new mills, as they might be held co-responsible for them.
In order to identify projects for new mills, EPN has mapped plans for pulp mill expansion. As of March 2018, there are several large-scale projects for new pulp mills around the world, including a mill in Mozambique by Portucel/The navigator Company, a mill in Uruguay by UPM, a mill in Estonia by EstFor and a mill in Amazar, Russia. More details about these and other ‘dodgy deals’ and companies can be found on the website of BankTrack. This includes information on companies such as APP, APRIL and Sappi.
There is generally little transparency about the financing of pulp and paper companies. ForestsandFinance is a tool that is meant to increase that transparency. It contains a database with information about loans, underwritings, bond and shareholdings for the largest pulp and paper companies in South East Asia, since 2010.