Facilitating private forestry investments: a practical approach to risk assessment








Due-diligence, Forest investments, Risk assessment


Forest investments in emerging markets are at an early stage and standardized risk assessment methodologies are rarely available. A best-practice guideline is needed to tackle the complexity of multiple risk factors.


The presented risk-assessment approach has been developed based on practical experience with forest investments in tropical regions. It covers topics ranging from project scouting and feasibility analysis to implementation. The aim of the toolkit is to support decision-making during the entire investment process, from project screening and investment decision to implementation. It is designed to minimize risks by guiding the management of information and resource allocation in an optimized and cost-efficient way. This clearly structured and practical toolkit is a framework that can also be used by investment groups who do not have extensive forest investment expertise.

This chart shows two essential principles of a risk assessment. First the improvement of information quality and the second the management of existing risks.