Investments in planted forests in emerging markets are increasing and investors are looking for Sustainable and Responsible Investments (SRI) to integrate Environmental, Social And Governance (ESG) into the investment process. This study is presenting a first attempt to develop a framework to evaluate the ESG performance of investments in planted forests and to identify relations between the use of SRI tools and the financial performance of investments in planted forests. The analysis of 121 investments in planted forests allowed the identification of 339 organizations and 50 SRI tools (e.g.: management and investment standards, investment rating) operating with investments in planted forests in emerging markets. The analysis of the 50 SRI tools resulted in the definition of a ESG Reference Document including 155 issues. These issues were organized into an ESG Risk Assessment and have been tested in 12 case studies evenly distributed between Uganda, Cambodia and Vietnam. The results suggest that the most common instruments are management standards (e.g.: FSC), bank investment policies (e.g.: ABN AMRO Forest and Plantation Policy) and investment rating systems (e.g.: FairForest). The majority of the SRI tools have a broad sectoral approach and are managed by business organizations. Investors are using more than 30 SRI tools but these are characterized by a low level of control such as signature and/or participation or at the most a conformity declaration. On the contrary plantation companies are using less instruments but with top level of control such conformity assessment and certification. Aspects related to “Legal and Institutional framework” and “Environment” are the most represented inside SRI tools. On the contrary aspects such as “Minimum percentage of protected areas”, “Poverty reduction” and “Prevention of encroachment” are not only the less frequent issues but also the less controlled issues by SRI tools. The Gold Standard and the Forest Stewardship Council are the SRI tools with the highest performance among the 50 SRI tools analysed. The ESG Risk Assessment allows to identify the most important 25 issues and reveals that SRI tools are focusing on issues that on-the-ground are not the major risk sources. This is the case of “Third party certification” and “High Conservation Value Forests” (HCVFs). Few exemptions where SRI tools are properly identifying the major risks are “Tenure rights”, “Health and safety of workers” and “Social impact assessment”. Climate change impacts, long term financial sustainability, poverty reduction and encroachment are ranked as the most dangerous sources of risk across the 12 case studies. SRI tools are positively influencing the risk mitigation, accounting for a percentage of risk mitigation that ranges from 34.31 till 60.63%. FSC certification was often reported by projects’ stakeholders as a key instrument to mitigate risk of investments in planted forests.

The agricultural sector of Andean countries like Peru and Bolivia perceives the consequences of climate change in increasing water stress due to melting glaciers and changing precipitation patterns. Therefore mainly subsistence agricultural systems are increasingly vulnerable. Traditional inhabitants of the tropical Andean region are aware of the recurrent diversity of climate related impacts and its consequences, thus livelihood strategies are based on principles of risk management. Andean farmers are nowadays applying traditional strategies in a combination of homegrown experimentation and scientific know-how to cope with and adapt to a changing climate. Understanding these adaptations has become one of the most important aspects of research into climate change impacts and vulnerability. It provides essential knowledge for developing and transferring strategies towards a sustainable management in agriculture and agroforestry systems. But there still is a lack of a comparative assessment, especially in regions with high impact of extreme climate conditions. The endogenously determined strategies, which are based on the experience of the farmers, are to be complemented by knowledge and experiences coming from outside farm-household systems and communities. In a collaborative way, this exogenous knowledge is to be placed at the disposal of local actors. The necessary network approach leads to a comprehensive involvement of local stakeholders. Therefore a participative network on climate change may work as a tool to bridge the gap between the global discourse on climate change and local action.

This publication summarizes the main results of the INCAProject during 2011/2012 and the contributions to the according INCA-Summer-School, which took place from September 19th – September 27th 2012 at the Technische Universität Dresden, Faculty of Environmental Sciences, Institute of International Forestry and Forest Products, Professorship of Tropical Forestry in Tharandt, Germany.