Project: Pulp Finance

Stop irresponsible investment in unsustainable pulp mills

)Tedhe 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 and 2019 we highlighted 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.

EPN has published a map of proposed and planned new pulp mills as well as a report on these plans for pulp mill expansion. As of March 2020, 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 Paso de los Toros in Uruguay by UPM, a mill in India by APP, and potentially two large mill in Brazil (one by Euca Energy in Mato Grosso, and one by Suzano, in Ribas do Rio Pardo). On the other hand, two other large mills have been shelved, after strong opposition: one 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. There you can find the following profiles:

Companies: APP, APRIL, Arauco, Bracell, CMPC (soon available), Eldorado Brasil,y Euca Energy, Klabin, Sappi, Suzano and UPM;

Pulp mill projectsAmazar (Russia), APP Andhra Pradesh (India), EstFor (Estonia), MAPA (Chile), Paso de los Toros (Uruguay) and Portucel/The navigator Company, (Mozambique).

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.