In a briefing paper published today (30 August), they warn that this new trend needs greater public scrutiny and debate.

Wood accounts for 67% of global renewable energy supplies, and many countries in the global North are increasing their use of it both to reduce their reliance on costly fossil fuels and to mitigate climate change.

Such countries are setting ambitious targets for using renewable energy, including biomass, but with demand for wood set to outstrip supply by up to 600% in some countries, and high tree growth rates in the tropics, investors are beginning to look South.

New tree plantations in developing countries that will be harvested to export wood could spell good news in terms of jobs, investment, climate change and conversation — if they are managed well.

But there is also a risk that plantations will displace poor and marginalised communities from land they have tended to for generations but have no formal claim over.

The paper, aimed at policymakers in both developed and developing countries, warns that rising demand for wood could harm food security and the livelihoods of the world’s poorest and most vulnerable people if governments lease large areas of land for fuel wood plantations.

“All eyes are turned to food and biofuels, but tree plantations for biomass energy may soon become an important driver in the global land rush,” says Dr Lorenzo Cotula, a senior researcher at IIED and co-author of the paper.

Duncan Macqueen, also a senior researcher and co-author adds: “Wood is a vital renewable energy source, and countries in the South should develop it for local energy security, not export it to fuel Northern energy deficits at the expense of their own people.”

For a PDF of the briefing paper, visit http://pubs.iied.org/17098IIED.html

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Principles intended to encourage socially and environmentally responsible investments generally fail to do so, according to the first comprehensive review of their use — published today by the International Institute for Environment and Development.

A growing number of investors have signed up to such principles for various reasons, from improving reputation to minimising risks and improving long-term investment prospects. But the review concludes that investment principles are generally too weak and vague to overcome the basic tension between profitability and both sustainability and equity.

“The proponents of different sets of principles have long expounded their potential to improve outcomes,” says author Eva Neitzert from research consultancy Just Economics. “But in generalprinciples encourage only minor alterations to investment decisions, within commercial constraints, rather than altering the underlying basis of decision-making.”

The review concluded that until all investors sign up to a common set of investment principles there is a commercial incentive for current signatories to adhere to only minimum requirements. Going beyond the bare minimum would put competitors at a competitive disadvantage. Investors will not compromise high returns on investments for improved outcomes in terms of sustainable development

“The principles tend to serve as aspirations rather than requirements,” adds Neitzert. “Principles may encourage efforts to mitigate the worst effects of investments, but they don’t prevent damaging investments from occurring in the first place.”

Neitzert assessed the content, take-up, implementation and impact of various sets of principles, with a focus on: the UN Principles for Responsible Investment; the Equator Principles, the Environmental and Social Principles of the European Investment Bank (EIB); and the OECD Declaration on International Investment and Multinational Enterprises.

Most of these principles (except the EIB’s) explain what should not be done, rather than what should.

“The potential for investment principles to support sustainable development is not yet being realised,” says Neitzert. “Not everything can be a ‘win-win’ for business and sustainable development. To pretend otherwise distracts attention from other approaches that will be needed if the stated objectives of principles for responsible investment are to be achieved.”

To encourage investors to consider more than purely commercial and short-term gains the authors call for better monitoring and measurement of the impact of investment principles, greater transparency, as well as a better understanding of the broader institutional changes required to support them.

With such improvements, they says, the next generation of investment principles should be more ambitious and more powerful in bringing about investment that supports, rather than undermines, sustainable development.

 For interviews, contact:

Eva Neitzert of Just Economics: eva@justeconomics.co.uk / +44 (0)7981 760 934

Emma Blackmore of IIED: emma.blackmore@iied.org (based in Hong Kong)

For an embargoed copy of the report, email mike.shanahan@iied.org

 NOTES TO EDITORS

This research was funded by IIED’s Joint Framework donors DFID, DGIS, Danida, SIDA, NORAD and Irish Aid.

Just Economics is a research company that uses interdisciplinary techniques to address economic injustice and achieve progressive and sustainable change. See www.justeconomics.co.uk

The International Institute for Environment and Development (IIED) is an independent, non-profit research institute. Set up in 1971 and based in London, IIED provides expertise and leadership in researching and achieving sustainable development (see: www.iied.org).

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