Green bonds used to finance damaging industrial tree plantations

14-05-2019 – Green bonds are used to finance business-as-usual tree plantations and operations of the paper & pulp industry and claiming exaggerated CO2 savings, a new briefing by the Environmental Paper Network (EPN) shows. The briefing presents a case study of a Green Bond issued by the Brazilian pulp & paper giant Fibria, even if the company has not engaged in any kind of environmental reorientation of its business activities. Instead, its Green Bond was used to finance expansions of monoculture industrial tree plantations.

The briefing argues that bonds for industrial tree plantations should not be eligible for a “green” label, as these do not provide additional ecological nor financial benefits. In addition to the negative ecological impacts such as reduction of water availability and pollution by pesticides and fertilizers, plantations have also caused numerous social and land conflicts with traditional communities in Brazil. In order to be beneficial for the climate, tree plantations should maintain and increase the amount of carbon stored in them over time, rather than have the trees quickly harvested and used for short lived products.

Fibria launched a Bond of USD 700 million in 2017 which according to the research by EPN has been mostly used to plant eucalyptus plantations and to purchase certified wood for its pulp mills. To a large extent these purchases are part of the everyday business of Fibria.

Green Bonds are supposed to be bonds earmarked for the financing of climate and environmental projects. Issuers of bonds like Fibria usually label bonds ‘green’ themselves, sometimes backed by different kinds of voluntary standards. However, the generally weak criteria of these standards and the poor disclosure requirements allow many business-as-usual projects to be labelled as “green”.

“The example of bonds by Fibria to finance business-as-usual industrial plantations raises the question of whether these self-labelled bonds and weak standards can credibly guarantee that money invested in these bonds will have a positive impact on the environmental and the climate”, said Merel van der Mark, coordinator of pulp finance work at the Environmental Paper Network.

“Green Bonds are an excellent opportunity to put together the growing demand for ethical investment for the huge environmental challenges the world is facing. They can attract resources otherwise unavailable and finance the implementation of projects that contribute to a better environment and climate. But this can only work if the green bonds can provide additional benefits, both financially and ecologically”, said Wolfgang Kuhlmann, the author of the briefing.

Wolfgang Kuhlmann,, +49 175 6040772
Merel van der Mark,, +316 1300 0656

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14-05-2019  – 环保纸业网(EPN)的新简报显示,绿色债券用于为纸张和纸浆行业的常规树木种植和运营提供资金,并声称夸大了二氧化碳减排量。该简报介绍了巴西制浆造纸巨头Fibria发行的绿色债券案例研究,即使该公司未对其业务活动进行任何环境重新定位。相反,它的绿色债券被用来资助单一种植工业树种植园的扩张。
“Fibria债券为常规工业种植园提供融资的例子提出了这样一个问题:这些自我标记债券和弱标准是否可以可靠地保证投资于这些债券的资金将对环境和气候产生积极影响”环境纸业网络纸浆金融工作协调员Merel van der Mark说。
Wolfgang Kuhlmann,,+ 49 175 6040772
Merel van der Mark,,+ 316 1300 0656

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