Climate Bonds Initiative Forestry Criteria Document

Forestry* Criteria
The Forestry Criteria for the
Climate Bonds Standard & Certification Scheme

November 2018

Assurance/Integrity/
Transparency
Assessing climate change mitigation
and adaptation aspects of financial
products is not straightforward.
The benefit of having an authoritative
standard eases decision-making andfocuses attention on credible climatechange solution opportunities. The
easier it is to use the faster the market
will grow.
The International Climate Bonds
Standards and Certification Scheme
assures investors that their funds arebeing used to help deliver a lowcarbon economy.
It allows investors and governments
to easily prioritize climate and green
bonds with confidence that the funds
are being used to deliver a low carbon
economy.
Certification is available for:• Project bonds• Corporate bonds (asset-linked)• Portfolio bonds• Asset-backed securities• Sovereign (programmatic) bonds.

* These Criteria also cover theconservation and restoration of non-forested land

Criteria are available for wind andsolar assets. Other key investmentareas soon to be released include
energy effciency in buildings andindustry, low-carbon transport,
bioenergy, water infrastructure andsustainable agriculture.
The Standard is an environmental
standard. It does not substitute forfinancial or other due-diligence.

Climate Bonds Initiative Forestry Criteria Document

Definitions
Climate Bonds Initiative (CBI): An investor-focused not-for-profit organisation, promoting large-scale investments that will
deliver a global low carbon and climate resilient economy. The Initiative seeks to develop mechanisms to better align theinterests of investors, industry and government so as to catalyse investments at a speed and scale sufficient to avoid
dangerous climate change.
Climate Bond: A climate bond is a bond used to finance – or re-finance - projects needed to address climate change. They
range from wind farms and hydropower plants, to rail transport and building sea walls in cities threatened by rising sea levels.
Only a small portion of these bonds have been labelled as green or climate bonds by their issuers.
Certified Climate Bond: A Climate Bond that is certified by the Climate Bonds Standard Board as meeting the requirementsof the Climate Bonds Standard, as attested through independent verification.
Climate Bonds Standard (CBS): A screening tool for investors and governments that allows them to identify green bonds
where they can be confident that the funds are being used to deliver climate change solutions. This may be through climate
mitigation impact and/ or climate adaptation or resilience. The CBS is made up of two parts: the parent standard (Climate
Bonds Standard v2.1) and a suite of sector specific eligibility Criteria. The parent standard covers the certification process
and pre- and post-issuance requirements for all certified bonds, regardless of the nature of the capital projects. The Sector
Criteria detail specific requirements for assets identified as falling under that specific sector. The latest version of the CBS is
published on the Climate Bonds Initiative website
Climate Bonds Standard Board (CBSB): A board of independent members that collectively represents $34 trillion of assets
under management. The CBSB is responsible for approving i) Revisions to the Climate Bonds Standard, including the
adoption of additional sector Criteria, ii) Approved verifiers, and iii) Applications for Certification of a bond under the
Climate Bonds Standard. The CBSB is constituted, appointed and supported in line with the governance arrangements andprocesses as published on the Climate Bonds Initiative website.
Climate Bond Certification: allows the issuer to use the Climate Bond Certification Mark in relation to that bond. Climate
Bond Certification is provided once the independent Climate Bonds Standard Board is satisfied the bond conforms with the
Climate Bonds Standard.
Green Bond: A Green Bond is where proceeds are allocated to environmental projects. The term generally refers to bondsthat have been marketed as “Green”. In theory, Green Bonds proceeds could be used for a wide variety of environmental
projects, but in practice they have mostly been the same as Climate Bonds, with proceeds going to climate change projects.
Forestry assets and projects: Assets and projects relating to the acquisition and / or management of forests, and / or the
production of associated infrastructure.
Technical Working Group (TWG): A group of key experts from academia, international agencies, industry and NGOs
convened by the Climate Bonds Initiative. The TWG develops the Sector Criteria - detailed technical criteria for theeligibility of projects and assets as well as guidance on the tracking of eligibility status during the term of the bond. Their draft
recommendations are refined through engagement with finance industry experts in convened Industry Working Groups andthrough public consultation. Final approval of Sector Criteria is given by the CBSB.
Industry Working Group (IWG): A group of key organisations that are potential issuers, verifiers and investors convened by
the Climate Bonds Initiative. The IWG provides feedback on the draft sector Criteria developed by the TWG before they
are released for public consultation.

The Climate Bonds Initiative gratefully acknowledges the Technical and Industry Working Group members who
supported the development of these Criteria. Members are listed in Appendix 4. Special thanks are given to
Christine Negra, Versant Vision, the lead specialist coordinating the development of the Criteria through theTechnical Working Group.

Climate Bonds Initiative Forestry Criteria Document

Table of Contents
Definitions ................................................................................................................................................................... 2
Table of Contents ..................................................................................................................................................... 3
1

Introduction....................................................................................................................................................... 4
1.1
1.2
1.3
1.4
1.5
1.6
1.7

2

Overview ............................................................................................................................................................................................................4
The Climate Bonds Standard ..................................................................................................................................................................4
The need for Forestry Criteria ...............................................................................................................................................................5
Scope of the Forestry Criteria ................................................................................................................................................................5
Key elements to the Criteria ...................................................................................................................................................................6
This document .................................................................................................................................................................................................6
Revisions to these Criteria ........................................................................................................................................................................6

Assets and Projects in Scope......................................................................................................................... 6
2.1
2.2
2.3

3

Assets in scope ................................................................................................................................................................................................6
Assets out of Scope .....................................................................................................................................................................................9
Alignment with other Sector Criteria ................................................................................................................................................9

Eligibility Criteria .............................................................................................................................................. 9
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10

4

Overview ............................................................................................................................................................................................................9
Requirements for plantation forestry .............................................................................................................................................. 12
Requirements for sustainable forest management .................................................................................................................. 14
Requirements for non-timber forest products (NTFP) ........................................................................................................ 14
Requirements for conservation and restoration forestry and non-forested land .................................................. 15
Requirements for forestry supply chain ......................................................................................................................................... 15
Requirements for forest roads ............................................................................................................................................................ 16
Free, Prior & Informed Consent (FPIC) Requirement .......................................................................................................... 17
Best Practice for Disclosure .................................................................................................................................................................. 17
Leveraging Existing Certification Schemes .................................................................................................................................... 18

Reporting ......................................................................................................................................................... 18

Appendix 1: Technical Working Group members .......................................................................................... 18
Appendix 2: Industry Working Group members ............................................................................................ 19
Appendix 3: No conversion of natural landscape since 2010 ....................................................................... 20
Appendix 4: Climate Adaptation & Resilience Checklist ............................................................................... 20
Appendix 5: Management Plan ............................................................................................................................. 22
Appendix 6: Ecoregion approach ........................................................................................................................ 23

Climate Bonds Initiative Forestry Criteria Document

1 Introduction
1.1

Overview

This Criteria Document provides all the requirements that must be met for forestry related assets and projects tobe awarded Climate Bonds Certification. The purpose is to provide instruction to issuers and verifiers about therequirements of the Forestry Criteria. The Criteria Document is supported by a Background Document that
captures the various dialogues and inputs and substantiates the reasoning behind the requirements set in theForestry Criteria.
The Criteria are developed through a consultative process with Technical Working Groups (TWGs) and Industry
Working Groups (IWGs), and through public consultation. The TWGs comprise academic and research
institutions, civil society organizations, multilateral banks and specialist consultancies whereas IWGs are
represented by industry experts including potential bond issuers and investors. A period of public consultation
offers the opportunity to any member of the public to comment on the Criteria.
Supplementary information available in addition to this document include:
1. Forestry Criteria Brochure: a 2-page summary of the Forestry Criteria
2. Forestry Background Document: the rationale behind the Forestry Criteria
3. Climate Bonds Standard V3: the umbrella document laying out the common requirements that all Certified
Climate Bonds need to meet, in addition to the sector-specific Criteria (V3 is the most recent update
version)
4. Climate Bonds Standard & Certification Scheme Brochure: an overview of the purpose, context andrequirements of the Climate Bonds Standard & Certification Scheme
For more information on the Climate Bonds Initiative and the Climate Bonds Standard & Certification Scheme,
see https://www.climatebonds.net/standard. For the documents listed above, see
https://www.climatebonds.net/standard/forestry

1.2

The Climate Bonds Standard

Investor demand for Green Bonds and Climate Bonds is strong, and will increase in line with the delivery of quality products
into the market. However, investor concerns about the credibility of green labelling are also growing. standards, assurance &certification is essential to improve confidence and transparency, which in turn will enable further strong growth in themarket.
The Climate Bonds Standard and Certification Scheme is an easy-to-use screening tool that provides a clear signal toinvestors and intermediaries on the climate integrity of Certified Climate Bonds.
A key part of the Standard is a suite of sector-specific eligibility Criteria. Each Sector Criteria sets climate change benchmarks
for that sector that are used to screen assets and capital projects so that only those that have climate integrity, through theircontribution to climate mitigation, and adaptation and resilience to climate change, will be certified. Where a bondencompasses a mixed portfolio of assets across several sectors, each sub-category of assets will be subject to the relevant
Sector Criteria for those assets.
The Sector Criteria are determined through a multi-stakeholder engagement process, including a Technical Working Group(TWG) and Industry Working Group (IWG), convened and managed by the Climate Bonds Initiative, and are subject topublic consultation. Finally, they are reviewed and approved by the Climate Bonds Standard Board.
The second key part of the Climate Bonds Standard is the overarching Climate Bonds Standard available athttps://www.climatebonds.net/standards/standard_download. This gives the common fund management and reporting
requirements that all Certified Climate Bonds must meet, in addition to meeting the specific Sector Criteria.

Climate Bonds Initiative Forestry Criteria Document

1.3

The need for Forestry Criteria

The UNFCCC has estimated that, globally, an additional USD 14 billion in financial flows will be required to address climate
impacts in agriculture, forestry, and fisheries in 2030.1 In the context of the forestry sector, estimates vary:2••••

The International Institute for Applied Systems Analysis (IIASA) suggests USD 30–53 billion are required per year toachieve zero net deforestation and degradation by 2020;
UNEP estimates that USD 17-33 billion per year is required to achieve a 50% reduction in deforestation by 2030;
WWF estimates that a minimum of USD 42 billion per year is needed by 2020;
Restoration of peat forests and other burned areas in Indonesia is projected to cost USD 5.5 billion over five years3

Several UNFCCC mechanisms have stimulated limited funding for mitigation and adaptation in the land use sectors including
through the UNFCCC Clean Development Mechanism (CDM) and Joint Implementation (JI) mechanism, which sought tosupport the creation of a global voluntary carbon market, and the Adaptation Fund. More than USD 6 billion – primarily
from donor governments including Norway, Germany, the UK and the US – has been provided for REDD+4 activities indeveloping countries and additional funding is anticipated through the Green Climate Fund, which will support REDD+
readiness and diverse activities on previously forested lands, managed forests, and primary forests.5 The World Bank's Forest
Carbon Partnership Facility (FCPF) has two separate but complementary funding mechanisms – the Readiness Fund and theCarbon Fund. The Readiness Fund supports tropical and sub-tropical developing countries to prepare themselves toparticipate in a future, large-scale, system of positive incentives for REDD+. The Carbon Fund will remunerate the selected
countries in accordance with negotiated contracts for verifiably reducing emissions more than in the reference scenario.
While REDD+ has received significant attention in policy dialogues such as the UNFCCC, the UN Convention on Biological
Diversity (CBD), the Convention to Combat Desertification (UNCCD), and the post-2015 Sustainable Development Goals(SDGs), private finance has been modest and demonstration of emission reduction at scale is pending.6 At a global level,
sales of voluntary or government-sanctioned carbon offset credits are unlikely to generate sufficient funding to meet land use
sector mitigation and adaptation needs.7
Efforts to avoid deforestation through investments in sustainable intensification of agriculture include the recent international
commitment, anchored by a USD 100 million contribution from Norway, for a USD 400 million fund intended to catalyseprotection of 5 million hectares of forests and peatlands through increased productivity of smallholder farmers.8
The objective of the Forestry Criteria is not to specify eligibility criteria for receiving offset credits that can generate revenue
through sale of credits in carbon markets. Offset (carbon credit) based revenue streams are only likely to be considered
relevant by investors where there is robust market demand for purchase of offset credits (e.g., geographies where there is aclear policy framework such as in the US State of California). To mobilise investment in sustainable forestry from large poolsof global capital, bond issuers will need to repay bond debt by generating revenues in more traditional ways such as throughsale of forest products or revenue streams related to production.

1.4

Scope of the Forestry Criteria

These Criteria apply to assets and projects relating to:
•
•
•
•
•

Plantation forestry
Sustainable forest management
Production of non-timber forest products (NTFP)
Forest restoration and conservation
Conservation and restoration of non-forested lands

1 https://unfccc.int/files/cooperation_and_support/financial_mechanism/application/pdf/adaptation.pdf

2 WWF. March 2012. WWF submission on finance to AWG LCA. http://unfccc.int/resource/docs/2012/smsn/ngo/201.pdf

3 https://forestsnews.cifor.org/44299/tax-amnesty-the-green-economy-and-peatrestoration?fnl=en&utm_source=early+May+2017&utm_campaign=NEWS+UPDATE+English+v2&utm_medium=email
4 REDD+ refers to reducing emissions from deforestation and forest degradation and conserving, sustainably managing and enhancing
forest carbon stocks.
5 https://forestsnews.cifor.org/50548/green-climate-fund-steps-up-to-reduce-deforestation-and-forestdegradation?fnl=en&utm_source=General+contacts&utm_campaign=d4fff2fd6dCIFOR_News_Update_31_July_20176_7_2017&utm_medium=email&utm_term=0_282b77c295-d4fff2fd6d-117330269
6 https://forestsnews.cifor.org/50326/redd-results-based-finance?fnl=en&utm_source=General+contacts&utm_campaign=b3b797da64CIFOR_News_Update_July_20176_7_2017&utm_medium=email&utm_term=0_282b77c295-b3b797da64-117330269
7 See http://www.forest-trends.org/documents/files/doc_4841.pdf
8 https://innovation-forum.co.uk/analysis.php?s=drive-for-deforestation-jurisdictional-approach-continues

Climate Bonds Initiative Forestry Criteria Document•

Certain supply chain activities linked to the above

Further details of the scope of the Forestry Criteria is in Chapter 2, Table 1.

1.5

Key elements to the Criteria

As a general principle, bonds will meet the requirements of the Climate Bonds Standard if the associated use of proceeds:••

Promote GHG mitigation through reduced emissions or increased carbon sequestration;
Demonstrate significant attention to climate risks and a clear plan for achieving a positive effect on operational
resilience; andMeet minimum disclosure requirements to raise the level of transparency in green bonds9.

Complete details of the requirements for the Forestry Criteria are in Chapter 3 of this document.

1.6This document

This document details:
•
•
•
•
•
•
•
•

The current scope of forestry assets and projects eligible for certification under the Climate Bonds Standard –Chapter 2;
The specific eligibility Criteria under which these assets and projects can be certified – Chapter 3;
List of Technical Working Group members – Appendix 1
List of Industry Working Group members – Appendix 2
Details of the requirement for no conversion of natural landscape since 2010 – Appendix 3
Details of the Adaptation & Resilience checklist – Appendix 4
Details of the Management Plan requirements – Appendix 5
And Description of the Ecoregion Approach – Appendix 6

Supporting information is available at https://www.climatebonds.net/standard, https://www.climatebonds.net/standard/forestry
and https://www.climatebonds.net/standard/land_cons_and_rest as follows:

1.7

Revisions to these Criteria

These Criteria will be reviewed two years after launch, or potentially earlier if the need arises, at which point the TWG willtake stock of issuances that arise in the early stages and any developments in improved methodologies and data that canincrease the climate integrity of future bond issuances. As a result, the Criteria are likely to be refined over time, as more
information becomes available. However, certification will not be withdrawn retroactively from bonds certified under earlier
versions of the Criteria.

2 Assets and Projects in Scope
2.1

Assets in scope

Table 1 presents use of proceeds that might be included in a Certified Climate Bond, subject to meeting the Criteria
described in Chapter 3. The first column in Table 1, ‘Eligible activity types’, gives an exhaustive list of all the activity types thatare within scope of the Forestry Criteria. The second column, ‘Example use of proceeds’, is an illustrative list of the type of
projects that may be included in a Certified Climate Bond. It is not possible to include an exhaustive list of all potential use ofproceeds due to the breadth of possibilities, but all use of proceeds must fall within one of the specified eligible activity types.
The assets in Table 1 are eligible for inclusion in a Certified Climate Bond if they meet the relevant:••Mitigation requirements (see Chapter 3 for details); AND
Resilience requirements (see Chapter 3 for details)

9 Disclosure requirements are stipulated in the overarching Climate Bonds Standard rather than the Forestry Criteria

Climate Bonds Initiative Forestry Criteria Document
Bonds financing multiple projects may also have to prove compliance with other Sector Criteria to be eligible for Climate
Bonds Certification. For example, if a bond includes both forestry projects and solar projects it would be necessary for theissuer to prove compliance with both the Forestry Criteria and the Solar Criteria.
Table 1 provides signposting as follows:•••

A green circle indicates these use of proceeds, when fully described and documented, automatically meet theCriteria requirements, with no further disclosure or documentation required
An orange circle indicates that the eligibility of these use of proceeds is conditional on meeting specificrequirements
A red circle indicates these use of proceeds are not eligible for certification under any circumstances

Table 1: scope of eligible projects and assets for Climate Bonds Certification under the Forestry Criteria
Eligible activity types

Example use of proceeds

Mitigation Adaptation& resilience

Land acquisition for purpose of establishing or expanding forest stands for timber
Plantation forestry – planted forest
productionthat is intensively managed and meet all
the following criteria at planting and
The purchase of equipment and cost of resources needed for planting andstand maturity: one or two species,
replanting activities (such as seedling production, soil preparation, and seedlingeven age class and regular spacing10
planting, nursery maintenance, pest control), ongoing maintenance, clearing,
thinning, fertilisation, management, harvesting and extracting.
The cost of setting-up and maintaining protection measures (e.g. rangers andmonitoring equipment). GIS analysis, satellite data collection and data analysis.
Sustainable forest management –Land acquisition for purpose of establishing or expanding native forest stands forcommercial management of naturalcommercial sustainable forest management
forests in a sustainable manner for the
production of timber. Natural forests
The purchase of equipment and cost of resources needed for activities (such as
are forest areas with many of theseedling production, soil preparation, and seedling planting, nursery maintenance,
principal characteristics and key
pest control), ongoing maintenance and management, clearing, thinning,elements of a native ecosystem, such as fertilisation, harvesting and extracting
complexity, structure and biologicaldiversity, including soil characteristics,
The cost of setting-up and maintaining protection measures (e.g. rangers andflora and fauna, in which all or almost all monitoring equipment). GIS analysis, satellite data collection and data analysis.
the trees are native species, notclassified as plantations11
Production of non-timber forest
Land acquisition for purpose of establishing or expanding either plantation or
natural forest stands
products (NTFP) – the commercial
cultivation and/ or extraction of goods
derived from forests that are tangible
The purchase of equipment and cost of resources needed for all operational
and physical objects of biological origin activities associated with maintaining forests for NTFP and for harvesting andother than wood.12 Includes, amongst extracting the NTFP
other things, the commercial cultivationand harvesting of amriso (broom grass), The cost of setting-up and maintaining protection measures (e.g. rangers andtimur, bamboo stems, bamboo shoots, monitoring equipment). GIS analysis, satellite data collection and data analysis.
paper mulberry bark, rattan stems, gum,
resin, nuts, mushrooms, fruits, herbs,
spices, aromatic plants, game, fibres,
medicinal, cosmetic or cultural produce.
Can be practised in either plantations
or sustainably managed forests.

10 FAO, Global Forest Resource Assessment 2020: Terms and Definitions, FRA 202011 ‘Natural forest’ includes the following categories: (i) Forest affected by harvesting or other disturbances, in which trees are being or have been
regenerated by a combination of natural and artificial regeneration with species typical of natural forests in that site, and where many of the above-groundand below-ground characteristics of the natural forest are still present. In boreal and north temperate forests which are naturally composed of only one or
few tree species, a combination of natural and artificial regeneration to regenerate forest of the same native species, with most of the principal
characteristics and key elements of native ecosystems of that site, is not by itself considered as conversion to plantations. (ii) Natural forests which aremaintained by traditional silvicultural practices including natural or assisted natural regeneration. (iii) Well-developed secondary or colonizing forest of native
species which has regenerated in non-forest areas. (iv) The definition of ‘natural forest’ may include areas described as wooded ecosystems, woodland andsavanna. Definition from FSC
12 FAO, Global Forest Resource Assessment 2020: Terms and Definitions, FRA 2020

Climate Bonds Initiative Forestry Criteria Document
Forest conservation - non-commercial
forestry activities designed to maintainthe existing forest habitat in both areaand quality. Activities will range fromminimal interventions to active
management and could include
protection from deforestation risk,
voluntary and mandatory set aside andactive conservation efforts

Land acquisition for purpose of protecting and conserving, forested areas for arange of ecosystem services
The purchase of equipment and cost of resources needed for the on-going
maintenance and management of conservation forestry project
The cost of setting-up and maintaining protection measures (e.g. rangers andmonitoring equipment). GIS analysis, satellite data collection and data analysis.

Forest restoration and rehabilitation – Land acquisition for purpose of expanding and restoring forested areas for a
non-commercial forestry activities
range of ecosystem services
designed to increase the area or
improve the quality of existing forest
The purchase of equipment and cost of resources needed for the on-goinghabitat or to establish new forest
maintenance and management of restoration and rehabilitation forestry projects
stands. Activities will range fromminimal interventions to active
The cost of setting-up and maintaining protection measures (e.g. rangers andrestoration including facilitating
monitoring equipment). GIS analysis, satellite data collection and data analysis.
regeneration and restoration via natural
or artificial means,
Reforestation or afforestation of former mined landConservation of non-forested land – Land acquisition for purpose of conserving existing areas for a range of
ecosystem services
conservation of non-commercially
productive land to maintain the existing The purchase of equipment and cost of resources needed for the on-goinghabitat in both area and quality.
maintenance and management of conservation projects
Activities could include the
The cost of setting-up and maintaining protection measures (e.g. rangers andestablishment of protected land ormonitoring equipment). GIS analysis, satellite data collection and data analysis.
national parks, voluntary or mandatory
set aside
Restoration or rehabilitation of non- Land acquisition for purpose of expanding and restoring existing areas and forforested land – restoration or
establishing new habitats for a range of ecosystem services
rehabilitation of non-commercially
The purchase of equipment and cost of resources needed for the on-goingproductive land to improve the quality maintenance and management of restoration and rehabilitation projects
or to increase the area of existing
habitats or to establish new habitats
The cost of setting-up and maintaining protection measures (e.g. rangers andmonitoring equipment). GIS analysis, satellite data collection and data analysis.
Restoration or rehabilitation of former mined land
Supporting and supply chain
Cost of installation, upgrade, maintenance or running costs of manufacturing andprocessing facilities and associated equipment for solid wood production, veneer
infrastructure – infrastructure that is
associated with the forestry sector and and plywood production and reconstituted panels
initial processing of timber. It could be Cost of acquiring, upgrade, maintenance or running costs for vehicles used onprocessing of timber products into
the forestry concession
wood products or paper and pulp,
storage, manufacture of monitoring and Cost of establishing, upgrading or maintain forest roads on the forestry
assessing equipment and plant nurseries concession
Installation, upgrade or maintenance of warehouses and storage infrastructure
and associated equipment
Installation, upgrade or maintenance of warning systems or satellite monitoring
for fire, illegal incursion, epidemics, invasion of harmful invasive species, flood anddrought conditions.
Installation, upgrade or maintenance of information and information management
systems such as installation of weather, soil and plant information capture andanalysis systems (e.g. weather stations), and technologies to promote precision
forestry harvesting
Installation, upgrade or maintenance of plant nurseries supplying the forestry
sectorCost of acquiring, upgrade, maintenance or running costs for aircraft used on theforestry concession
Installation, upgrade or maintenance of fertiliser production infrastructureClimate Bonds Initiative Forestry Criteria Document

2.2

Assets out of Scope

The red items in Table 1 are excluded either because they are incompatible with a low carbon or climateresilient economy or because determining their eligibility is outside the mandate of the Forestry Criteria. The
justifications for exclusions are presented in section 3.3 of the Background Document.

2.3

Alignment with other Sector Criteria

It is essential that clear guidance on which Sector Criteria assets and projects are eligible for Climate Bonds
Certification is given. This saves confusion and means that it is clear, both to the verifier, issuer and investor,
which requirements a given asset or project is expected to meet. Table 2 identifies possible overlaps and explains
which Sector Criteria should be referred to in which cases. The following sections give further explanation.
Table 2: clarification of which Sector Criteria assets or activities are eligible for Climate Bonds Certification under

Assets or Activity

Land transport

Water transport

Applicable Sector Criteria
Vehicles used within the forest concession up to the forest gate are applicable for
Certification with the Forestry Criteria.
Vehicles used beyond the forest concessions and past the forest gate must comply with
the Transport Criteria.
Vessels used within the forest concession up to the forest gate are applicable for
Certification with the Forestry Criteria.
Vessels used beyond the forest concessions and past the forest gate will be covered by
the Shipping Criteria that are currently in development.

Restoration of forest for the
purposes of watershedmanagement, flood anddrought protection

Must comply with the Water Criteria

Agroforesy, palm oil andsilvopastoralism

Will be covered by the Agriculture Criteria. Excluded from Climate Bonds Certification
under the Forestry Criteria because of cross-over with agriculture

Bioenergy facilities or plants

Must comply with the Bioenergy Criteria. Growth of timber derived bioenergy
feedstocks (e.g. forest stands destined for bioenergy) must comply with the Forestry
Criteria

3 Eligibility Criteria
3.1

Overview

The Forestry Criteria has three components:
1. Mitigation component
2. Resilience component
3. FPIC component
The diagram below shows how these components come together to make up the Forestry Criteria.

Climate Bonds Initiative Forestry Criteria Document
Requirement 1: Mitigation component
Requirements to comply with the mitigation component vary depending on the type of forestry being practiced.
• For plantation forestry see section 3.2• For sustainable forest management see section 3.3• For non-timber forest products see section 3.4• For forest conservation and restoration projects see section 3.5• For supply chain activities see section 3.6• For forest roads see section 3.7

Requirement 2: Resilience component
All types of projects and assets must comply with the adaptation and resilience checklist (see Appendix 1). Other requirements tocomply with the mitigation component vary depending on the type of forestry being practiced.
• For plantation forestry see section 3.2• For sustainable forest management see section 3.3• For non-timber forest products see section 3.4• For forest conservation and restoration projects see section 3.5• For supply chain activities see section 3.6• For forest roads see section 3.7

Requirement 3: Free Prior & Informed Consent (FPIC)
For all projects, FPIC must be sought when property rights are potentially affected or projects may lead to the removal or relocationof habitation or activities
Key

Compliant
Not compliant

Not certifiable

Certifiables
All components apply to all types of forestry assets or projects, but there are different requirements depending on the typeof forestry asset or projects in question. Table 3 shows how the Criteria apply to the various project types. Sections 3.2-3.7
explain the details of each requirement and the evidence that projects must give to be compliant.
When seeking certification an issuer or verifier should first consult Table 3 and then they should consult the relevant sections
between 3.2 and 3.6 to understand the detail of the Criteria that apply to them. Each type of forestry activity has its own
section:
•
•
•
•
•
•

Section 3.2: Plantation Forestry
Section 3.3: Sustainable Forest Management
Section 3.4: Non-Timber Forest Products (NTFP)
Section 3.5: Forest and Non-Forestry Land Conservation & Restoration
Section 3.6: Supply Chain Activities
Section 3.7: Forest Roads

Where the bond portfolio includes several separately identifiable forestry projects or groups of assets, these conditions must
be met for each separately identified project or asset grouping. Bond issuers should determine and justify these projectboundaries.

Climate Bonds Initiative Forestry Criteria Document
Table 3: Matrix showing which types of forestry each component of the Forestry Criteria applies to

Mitigation
component

Resilience
component

FPIC
component•

No naturallandscapeconversion
Carbon stocks offorests or otherhabitats aremaintained
through goodmanagement
practices
Impacts thatclimate change
may cause to theresilience of theforest, land or
surrounding
ecosystem areunderstood andmitigated
General health offorests or otherhabitats ismaintained
through goodmanagement
practices
Free, Prior andInformed Consent
is practiced andimplemented in
the project or
activity

Plantation
forestry

Sustainable forest
management

Nontimberforestproducts(NTFP)

Forestconservation&
restoration

Conservation& restorationof other
non-forested
land

Supplychain
activities

ü

ü

»13

N/A

N/A

N/A

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

ü

Key

ü
N/A
»

Requirement applies
Requirement does not apply
Requirement applies in some scenarios

Smallholders
It is recognised that smallholders often may not be able to afford to get external best practice certification. For this reason, there areslightly different acceptable ways to prove compliance with some parts of the requirements for smallholders. The differing
requirements are given in the relevant section and presented in a box like this one. If a section does not have a box like this one,assume that there is no differentiation between the requirements for non-smallholders and for smallholders.
For the purposes of these Criteria, smallholder is defined as either:
1.
2.
3.

A forest management unit that is under 100 ha14
A forest that is being managed for the production of non-timber forest products (NTFP) only15
Where the rate of timber harvesting is less than 20% of the mean annual increment within the total production forest area ofthe unit and the harvest from the total production forest area is less than 5,000m3/year16

13 Whether NTFP will need to meet this requirements will depend on the type of forestry being practiced

14 FSC Standard, SLIMF Eligibility Criteria (FSC-STD-01-003 (Version 1-0) EN)
15 Ibid
16 IbidClimate Bonds Initiative Forestry Criteria Document
4.

A forest management unit that complies with the FSC SLIMF Eligibility Criteria – Addendum FSC-STD-01-003a EN

An example of how we might see Certification being applied to smallholders could be a bank or corporate refinancing loans or
microfinancing that they have supplied to a variety of smallholder foresters. It is unlikely that smallholders themselves would issue abond, and hence unlikely that they would come directly to a verifier seeking Certification.

3.2

Requirements for plantation forestry

Requirement 1: Mitigation component
Component

Requirement

Demonstration of compliance
For smallholders:• FSC or PEFC certification
plus confirmation that nopeatlands have been
converted since 2010

• FSC or PEFC certification plus
confirmation that no peatlands havebeen converted since 2010
OR
• Satellite evidence that all plantations
were established before 2010
OR
• Evidence that converted land does
not fall into the Forestry Criteria’s
definition of natural landscape

For non-smallholders:

For smallholders:• FSC or PEFC certified•

For non-smallholders:
No natural landscape conversion since2010
Mitigation

Carbon stocks of forests or otherhabitats are maintained through goodmanagement practices

Comply with the management plan(see appendix 5)

Requirement 2: Resilience component
Component

Resilience

Requirement

Demonstration of complianceImpacts that climate change may cause
to the resilience of the forest, land or
surrounding ecosystem areunderstood and mitigated• Must comply with the adaptation and resilience checklist (seeappendix 4)General health of forests or otherhabitats is maintained through goodmanagement practices

For non-smallholders:

For smallholders:• FSC or PEFC certified•

Comply with the management plan(see appendix 5

Requirement 3: FPIC
Component

Requirement

Demonstration of complianceFree, Prior andInformed
Consent

FPIC must be sought when property
rights are potentially affected or projects
may lead to the removal or relocation of
habitation or activities• Comply with a recommend best practice scheme (see section 3.8)

Key

Compliant
Not compliant

Certifiable

Not certifiableClimate Bonds Initiative Forestry Criteria Document
Smallholders
Mitigation component:•
No natural landscape conversion since 2010 may be demonstrated either by giving evidence that all plantations were
established by 2010 or by showing that they did not convert natural landscape to plantations (see Appendix 3 for fulldetails).
•
The maintenance of habitat carbon stocks and general health may be proved by complying with the management planrequirements as detailed in Appendix 5.
Resilience component:•
The requirement that habitats are managed in-line with maintaining resilience may be proved by complying with the
management plan requirements as detailed in Appendix 5.
•Must also comply with the adaptation and resilience checklist in Appendix 4.

Climate Bonds Initiative Forestry Criteria Document

3.3

Requirements for sustainable forest management
Requirement 1: Mitigation component
Component

Requirement

Demonstration of compliance
For smallholders:• FSC or PEFC certification
plus confirmation that nopeatlands have been
converted since 2010

• FSC or PEFC certification plus
confirmation that no peatlands havebeen converted since 2010
OR
• Satellite evidence that all forests were
established before 2010
OR
• Evidence that converted land does
not fall into the Forestry Criteria’s
definition of natural landscape

For non-smallholders:

For smallholders:• FSC or PEFC certified•

For non-smallholders:
No natural landscape conversion since2010
Mitigation

Carbon stocks of forests or otherhabitats are maintained through goodmanagement practices

Comply with the management plan(see appendix 5)

Requirement 2: Resilience component
Component

Resilience

Requirement

Demonstration of complianceImpacts that climate change may cause
to the resilience of the forest, land or
surrounding ecosystem areunderstood and mitigated• Must comply with the adaptation and resilience checklist (seeappendix 4)General health of forests or otherhabitats is maintained through goodmanagement practices

For non-smallholders:

For smallholders:• FSC or PEFC certified•

Comply with the management plan(see appendix 5).

Requirement 3: FPIC
Component

Requirement

Demonstration of complianceFree, Prior andInformed
Consent

FPIC must be sought when property
rights are potentially affected or projects
may lead to the removal or relocation of
habitation or activities• Comply with a recommend best practice scheme (see section 3.8)

Key

CompliantCertifiable

Not certifiable

Not compliant

Smallholders
Mitigation component:•
The maintenance of habitat carbon stocks and general habitat health may be proved by complying with the management
plan requirements as detailed in Appendix 5.
Resilience component:•
The requirement that habitats are managed in-line with maintaining resilience may be proved by complying with the
management plan requirements as detailed in Appendix 5.
•Must also comply with the adaptation and resilience checklist in Appendix 4.

3.4

Requirements for non-timber forest products (NTFP)Climate Bonds Initiative Forestry Criteria Document
For non-timber forest products (NTFP) to be eligible for certification the forest in which the products are collected mustcomply with the relevant forest type requirements. For non-timber forest products harvested from:
•
•
•

3.5

Plantations see section 3.2 for the relevant requirements
Sustainable forest management see section 3.3 for the relevant requirements
Conservation or restoration projects see section 3.5 for the relevant disclosure requirements

Requirements for conservation and restoration forestry and non-forested land[diagram on next page]
Requirement 1: Mitigation component
Component

Mitigation

Requirement

Demonstration of compliance• FSC or PEFC certified
OR• Comply with the management plan (see appendix 5)
AND• If conservation, show maintenance of forest or habit area and quality
OR• If restoration, show increase to forest or habitat area or
improvement to forest or habitat quality

Carbon stocks of forests or otherhabitats are maintained through goodmanagement practices

Requirement 2: Resilience component
Component

Requirement

Demonstration of complianceImpacts that climate change may cause
to the resilience of the forest, land or
surrounding ecosystem areunderstood and mitigated• Must comply with the adaptation and resilience checklist (seeappendix 4)General health of forests or otherhabitats is maintained through goodmanagement practices• Comply with the Ecoregion Approach (see appendix 6)
AND• Comply with the management plan (see appendix 5)
OR• FSC or PEFC certified

Resilience

Requirement 3: FPIC
Component

Requirement

Demonstration of complianceFree, Prior andInformed
Consent

FPIC must be sought when property
rights are potentially affected or projects
may lead to the removal or relocation of
habitation or activities• Comply with a recommend best practice scheme (see section 3.8)

Key

CompliantCertifiable

Not certifiable

Not compliant

3.6

Requirements for forestry supply chain

In general supply chain assets are considered to be supporting infrastructure to the forestry industry. In the forestry sector, itis the forests themselves that are most material to delivering emissions savings and climate resilience. For this reason, therequirements of these Criteria focus on making sure the forests themselves are delivering climate mitigation and are climate
resilient.
Certification is available to the following suply chain assets:

Climate Bonds Initiative Forestry Criteria Document
•
•
•
•
•
•
•
•
•
•

Nurseries or seed orchards
Storage facilities
Monitoring and assessment equipment
Soil wood production
Veneer and plywood production
Saw mills
Stud mills
Reconstituted panels: fibreboard, particleboard, MDF and OSB
Pulp production
Paper and board manufacture

Requirement 1: Mitigation component
Component

Requirement

Demonstration of compliance

Carbon stocks of forests or otherhabitats are maintained through goodmanagement practices*Only for veneer and plywood production,
reconstituted panels production, pulp,
paper and board manufacture*

Mitigation•

Inputs to the supply chains are all FSC or PEFC certified• Proof that at least 50% of energy used is generated from renewablesources

Energy used in the facility is at least
50% from renewable sources

Requirement 2: Resilience component
Component

Requirement

Demonstration of compliance• Must comply with the adaptation and resilience checklist (see appenix
4)

Resilience

Impacts that climate change may cause
to the resilience of the forest, land or
surrounding ecosystem areunderstood and mitigatedGeneral health of forests or otherhabitats is maintained through goodmanagement practices••

Inputs to the supply chain are all FSC or PEFC certified
Facility must be FSC or PEFC certified

Requirement 3: FPIC
Component

Requirement

Demonstration of complianceFree, Prior andInformed
Consent

FPIC must be sought when property
rights are potentially affected or projects
may lead to the removal or relocation of
habitation or activities• Comply with a recommend best practice scheme (see section 3.8)

Key

CompliantCertifiable

Not compliant

3.7

Requirements for forest roads
1. Road is contained within the forestry concession
AND
2. Forestry concession complies witha. 3.2 if it is plantation forestryb. 3.3 if it is sustainable forest managementc. 3.4 if it is harvest of non-timber forest products
d. 3.5 if it is conservation and restoratione. 3.6 if it is supply chain

Not certifiableClimate Bonds Initiative Forestry Criteria Document
AND
3. Road does not pass through an Intact Forest Landscape (IFLs)17
AND, 3 OR 4
4. Projects and assets are FSC or PEFC certified
OR
5. Road is designed and managed considering:a. Soils are protectedb. Water courses are protectedc. Disturbance of and damage to rare and threatened species, habitats, ecosystems and landscape values areprevented, mitigated or repaired
d. Measures are in place to prevent unauthorised vehicle access into the forest stands

3.8

Free, Prior & Informed Consent (FPIC) Requirement

Free, prior & informed consent (FPIC) from indigenous peoples or local communities must be sought out when:••

Property rights are potentially affected, FPIC must be obtained from property rights holders; orProject activities may lead to the removal or relocation of habitation or activities important to their culture andlivelihood

FPIC must be carried out in accordance with one of the following:
•
•
•
•
•
•
•

ILO 169
FSC
Climate, community and biodiversity standard
PEFC
UN Declaration of the Rights of Indigenous Peoples
FAO’s FPIC Manual for Practitioners
High Carbon Stock Approach / HCV-HCSA

It is the issuers responsibility to provide information about which FPIC guidance has been followed and evidence that theguidelines have been adhered to.

3.9

Best Practice for Disclosure

While not compulsory, the issuer is encouraged to disclose information on the following:
•
•
•
•

•
•
•
•

GHG emission footprint – including quantification, methodology used and performance over the lifetimeof the bondSpecies planted and used – species names of all trees to be planted including whether the species arenative to the location or not
Genetically Modified (GM) plants – whether GM trees are to be planted and harvested and, if so, details
regarding these trees
Percentage of unconverted or conserved land – whether a mixed forestry project comprised ofplantation and conservation forestry or solely conservation forestry, an issuer can disclose the percentage
of each within a project
Supply chain assets – issuers are also encouraged to disclose any operational safeguards that may be inplace
Impact assessments, external audits and ESG safeguards – relevant assessments and audits carried out
separately to those required in the Criteria are welcomed
Broader benefits of the project for the surrounding ecosystems and unconverted and conserved land
Medium to long-term investment plans

17 An Intact Forest Landscape is a seamless mosaic of forest and naturally treeless ecosystems within the zone of current forest extent, which exhibit noremotely detected signs of human activity or habitat fragmentation and is large enough to maintain all native biological diversity, including viable populationsof wide-ranging species. See more here: http://www.intactforests.org/

Climate Bonds Initiative Forestry Criteria Document•

Past or pending litigation concerning land rights, livelihood or health issues related to stakeholders, andany remedial action

NB: this is not a requirement for proving compliance with the Forestry Criteria. This information is considered
best practice by the market and in the sector. Therefore, issuers may wish to disclose to investors ad more
broadly.

3.10

Leveraging Existing Certification Schemes

Existing certification schemes, FSC and PEFC, are leveraged in the Forestry Criteria. They were evaluated against therequirements of the Forestry Criteria. These evaluation processes are explained in full detail in section 4.6 (Leveraging
Existing Certification Schemes) of the Forestry Criteria Background Document.

4 ReportingIn accordance with the Climate Bonds Standard, it is the issuers responsibility to provide to the verifier the informationnecessary to demonstrate compliance with each component of these Criteria as described below. Verifiers must include thisinformation in the scope of verification.
In accordance with the overarching reporting requirements as laid out in the Climate Bonds Standard V3.0, issuers are
required to provide this information as follows:[Note to reader – v3.0 is currently in development – these requirements may be updated]•••

Pre-issuance reporting (supported by independent verifiers report): Full disclosure information relating to all
nominated assets and projects at time of issuance.
Post-issuance reporting (supported by independent verifiers report): Any amendments relating to all nominatedassets and projects, including any additions or changes to allocated use of proceeds.
Annual reporting thereafter: Any amendments to the previously provided information should be reported by theissuer by exception as changes arise. If there has been a reallocation of proceeds after post-issuance reporting, theissuer is required to re-engage the verifier to assess whether the newly identified assets and projects meet these
Criteria.

All requirements for certification must be maintained in compliance for the duration of the bond.

Appendix 1: Technical Working Group members
Members of the Forestry Technical Working Group
•
•
•
•
•
•
•
•
•

Christine Negra, Versant Vision LLC, Lead Specialist
Torsten Boettcher, Agrobanco
Sergio Collaco de Carvalho, University of Oxford, Geography Department
Paul Chatterton, WWF International
Stuart Clenaghan, EcoSystem Service Ltd
Rupert Edwards, Forest Trends
David Ganz, RECOFTC
Michele Laird, Abt Associates
Petri Lehtonen, Indufor

Members of the Land Use Technical Working GroupClimate Bonds Initiative Forestry Criteria Document
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

Christine Negra, Versant Vision LLC, Lead Specialist
Tanja Havemann, Clarmondial AG, Lead Specialist
Keith Alverson, UNEP
Geoff Blate, USDA Forest Service
Rupert Edwards, Forest Trends
Martial Bernoux, French Research Institute for Development (IRD)
Adam Chambers, USDA NRCS-National Air Quality and Atmospheric Change TeamPaul Chatterton, WWF International
Jane Feehan, European Investment BankDavid Ganz, RECOFTC
Mark Holderness, Global Forum on Agricultural Research
David Howlett, Global Resilience PartnershipFrank Hicks, Independent advisor
Henry Neufeldt, (formerly) World Agroforestry Center (ICRAF)
Mark New, African Climate and Development Initiative, University of Cape Town
Simon Petley, EnviroMarket Ltd.
Roseline Remans, Bioversity International, CGIAR
Lamon Rutten, Independent Consultant
Brett Shields, Spatial Informatics Group (SIG) and Asia LEDS Global Partnership
Naomi Swickard and Jerry Seager, Verified Carbon Standard (VCS)
Annette Thiele, University Greifswald, Partner in the Greifswald Mire Centre
Raylene Watson, Independent Consultant

Appendix 2: Industry Working Group members
Members of the Forestry Industry Working Group
•
•
•
•
•
•
•
•
•

Michael Anderson, ERM
Sophie Beckham, International Paper
Jean-Dominique Bescond, World Bank
Brian Kernohan, Hancock Natural Resources Group
Sami Lundfren & Tim Lehesvrta, UPM
Lars Mac Key, DanskeBank
Jacob Michelsen, Nordea
Beth Nelson & Pip Best, EYMark Robinson, DNV.GL

Members of the Land Use Industry Working Group• John Tobin & Fabian Huwyler, Credit Suisse• Hans Biemans & Justin Sherrard, Rabobank• Marc Sadler, World Bank
• Brian Kernohan, Hancock Natural Resources Group• Ali bin Mohamed, Hassad Foods• Howard-Yana Shapiro, Mars / UC Davis• Oli Haltia, Dasos Capital• Tim McGavin, Laguna Bay• Karla Canavan• Esben Brandi, Quantum Global• Marcos Mancini, Banorte• Cristiano Oliveria, Fibria

Climate Bonds Initiative Forestry Criteria Document
•
•
•
•
•
•
•
•
•
•
•
•

Mads Asprem, Green Resources
Chris Brown, OlamAndrew Voysey, Cambridge Institute for Sustainable Leadership
Jason Green, ECOM Trading
Lara Yacob, The Nature Conservancy
John Simpson, Duxton Asset Management
Katalin Solymosi, IADB
Timm Tennigkeit, UNIQUE
Michael Hendriksz, ADM
Stephen McDowell, Barclays
Rishi Madlani, Royal Bank of Scotland
Caroline Cruickshank, Emma Wilkes & Jamie Bartlett, Bank of New York Mellon

Appendix 3: No conversion of natural landscape since 2010
The TWG advocated using the High Carbon Stock (HCS) classification for issuers that are not required to be
FSC or PEFC certified but do need to comply with the requirements of ‘no natural landscape conversion since2010’. The TWG identified two categories of land that must not be deforested to make way for plantations; HCS
land and peatlands.
High Conservation Value-High Carbon Stock Assessments (HCV-HCSA)18 are leveraged with regards tosmallholders projects complying with the requirement that no natural landscape has been converted since 2010.
The HCV-HCSA has six classifications of land; high density forest, medium density forest, low density forest,
young regenerating forest, scrub and open land19. The first four classes are considered HCS land, however for theForestry Criteria it is stipulated that scrub should not be converted to plantation forestry because it can have highsoil carbon that should be protected. Hence, the resulting requirement was set that the only land that is
acceptable to convert to plantation forestry since 2010 is open land (if it is not peatland).
To determine which HCS category land falls into the HCV-HCSA should be used. The toolkit is designed tostandardise the methodology and to make it available to all practitioners.20

Appendix 4: Climate Adaptation & Resilience Checklist
To demonstrate compliance with this element of the Criteria, all assets and projects must satisfy the requirements of thechecklist detailed below.
The checklist (Table 5) is a tool to verify that the issuer has implemented sufficient processes and plans in the design,planning and decommissioning phases of a project to ensure that the operation and construction of the asset minimises
environmental harm and the asset is appropriately adaptive and resilient to climate change and supports the adaptation andresilience of other stakeholders in the environment.
All elements of this checklist must be addressed, and appropriate evidence provided that these requirements are being met,or are not applicable in respect of the specific assets and projects linked to the bond. It is expected that their evidence willencompass a range of assessment and impact reports and associated data, including but not limited to those reports
required to meet national and local licensing and approval processes. This might include Development Consent Orders,planning regulations adhered to, Environmental Impact Assessments, Vulnerability Assessments and associated Adaptation
Plans.
The decision tree below (Figure 1) shows the steps to go through for verifying compliance with the checklist.
18 http://highcarbonstock.org/

19 http://highcarbonstock.org/the-hcs-approach-toolkit/

20 The HCS Approach Toolkit Version 2.0: Putting no Deforestation into Practice (2017) http://highcarbonstock.org/the-hcs-approachtoolkit/

Climate Bonds Initiative Forestry Criteria Document
A climate change adaptation assessment may be integrated into a range of appropriate project development steps, which
may include, inter alia, strategies and planning, pre-feasibility and feasibility studies, audits, technical assessments, risk
assessments, or environmental and social due diligence, e.g. environmental and social impact assessments.
It is the issuers responsibility to provide the relevant information to the verifier. Verifiers must include this information in thescope of verification.
In accordance with the overarching reporting timetable as laid out in the Climate Bond Standard V2.1 issuers are required toreport compliance with these eligibility conditions at all of the following stages:• Pre-issuance reporting (supported by independent verification)• Post-issuance reporting (supported by independent verification)• Annual reporting
Notes: for all requirements in the checklist below, project boundaries should be established that take into account the assets andwider system, for example, infrastructure, systems, communities, institutions or ecosystems that are directly affected by the projects
or assets in question. The project boundaries should define the scope of the climate resilience checklist.
Figure 1: Decision tree for verifying compliance with the Resilience Checklist

Table 5: Full details of the adaptation and resilience checklist for evaluating the performance of forested and non-forested land
assets and projects
Item

Demonstration ofcompliance

Section 1: The future climate change related risks and vulnerabilities to the asset/site have been evaluated
1.1

Processes are in place to assess key risks from a changing climate, both to the asset itself, AND to the broader
ecosystem21
Examples of risks that may need to be evaluated are:•••Temperature changes
Changes to water availability
Increased risk of flooding or drought

For example:
management plan,fire management
plan,
environmental
impact assessment
or adaptation plan.
Existing,
authoritative and21 Risks that the asset poses to the resilience of the broader ecosystem or local stakeholders might include any ways in which forestry activities might affectthe resilience of other users/stakeholders or any ways in which forestry activities improve the adaptation capacity or resilience of other users/stakeholders.
For example, does the asset impact water availability in the entire ecosystem?

Climate Bonds Initiative Forestry Criteria Document•••

Changes to wind patterns
Increased fire risk
Impact on water quality and quantity for other users in the basin

peer reviewed
analyses that havebeen used mustbe cited.

Areas that are felt to be of concern for the operation of these assets should be evaluated.
This process should include:••

Mapping of risks; where, when, severity and likelihood. This may be a quantitative or qualitative mappingof risks
Linking the risk to the possible impact on the asset and ongoing operations – e.g. impact on operating
feasibility, harvesting or yield, or impact on maintenance requirements22

These processes and assessments should use existing, authoritative and peer reviewed analyses or reports such as theIntergovernmental Panel on Climate Change’s most recent Assessment Report, National Adaptation Strategies and/or
Action Plans, National Adaptation Programmes of Action, Nationally Determined Contributions, Strategic Programmes
for Climate Resilience and other relevant adaptation strategies and policies and academic journals.
An appropriate timescale over which climate change impacts are assessed should be established. To assess the climatechange signal above observed climatic variability, the characteristics of future climate should be assessed over a period ofat least 20 years.
Section 2: A plan has been designed and implemented to mitigate and adapt to the climate risks and vulnerabilities identified and to improve theresilience of the assets
2.1

A plan has been designed and is being implemented to address the risks identified in 1.1.

For example,
adaptation plan,management plan

A link between the risks identified in section 1.1 and the planning and design of the risk mitigation or adaptation measures
should be articulated.
The expected benefits of recommended measures should be explained.
Examples of measures to address risks identified might be:•

There are training, capacity and governance arrangements in place for how the organization will deal with theimpacts of exceptional events such as droughts, floods, wildfires, severe pollution•

Tree species that are appropriate for the expected changes in climate, as well as for the current climate havebeen selected•

There is a programme of stakeholder engagement and collaboration to strengthen resilience outcomes acrossthe system (e.g. policy development, consultation and collaboration to ensure connectivity of green nodes, of
supply chain actors, or neighbours in same ecosystem)

Section 3: There is a plan in place to re-evaluate the risks climate change poses
Re-evaluation should be carried out annually.
Re-evaluation of adaptation or resilience plans and measures, as specified in 2.1, is also planned.
There are monitoring and reporting systems and processes in place to identify high risk scenarios and to identify whenunexpected risks are likely.

Appendix 5: Management Plan
For the assets and projects that the management plan does apply to, evidence must be given to show that there are plans
for management in all of these fields. There should be a designated person allocated to overseeing and implementing all
aspects of the management plan.
If an asset or project is Certified by either FSC or PEFC that is considered proof enough that those assets comply with all
aspects of the management plan.
Requirements of the management plan
1. Soil health: a soil management plan is developed and implemented with a focus on soil carbon,
productivity, retention of soil, retention of soil biomass and soil structure
2. Water management: there has been an assessment done of the water requirements of the forests,
22 This list taken from World Banks Climate and Disaster Risk Assessment Tool

Climate Bonds Initiative Forestry Criteria Document

3.
4.
5.
6.
7.

8.

impacts on and water needs of downstream users (both human and natural) and discharges into
watercourses. A water management plan is in place that addresses relevant risks and includes
measures to protect ground water and local water bodies
Fire management: measures have been developed and are implemented for the prevention ofdestructive forest fires (i.e. fires that do not serve management purposes)23
Riparian areas protection: provision has been made to protect riparian areas
Biodiversity management: the management plan includes provisions for managing and maintaining
biodiversity
Species selection: selection of species that are suitable for the project type (e.g. conservation,
restoration or sustainable forest management), will not disrupt genetic diversity or that are suitablefor current or projected future ecological conditions
Chemical use: prohibition of active ingredients that are listed in the Stockholm Convention, theRotterdam Convention or that are listed as classification Ia or Ib in the WHO recommended
Classification of Pesticides by Hazard, except in case of an emergency situation or a governmental
order. In these cases, environmental and social risk assessment is required.
Forest protection: protection and monitoring measures are in place to prevent and monitor for illegal
logging and illegal land conversion.

Appendix 6: Ecoregion approachThis approach is relevant to the certification of conservation or restoration projects as detailed in section 3.5 and 3.6. The
goal for certifying conservation and restoration projects is to improve or maintain carbon stocks and the climate resilience ofthe habitats. For both to be achieved and for the project to be appropriate for the location it is in there has to beconsideration of what the native habitat for the given location is. The Ecoregion Approach was recognised by the TWG as
the best tool that is available for understanding what the native habitat of a given region is.
An issuer must prove complaince with the Ecoregion Approach by:Complying with the Ecoregion Approach
1. Identify the ecoregion or ecoregions the projects or assets are in. This can be done through thefollowing process:a) Identification of the project and assets locationsb) Using coordinates of projects and assets, indicate which ecoregions the projects and assets
are located in. WWF’s GIS shapefile for the ecoregions map should be used as the source
for identifying ecoregions24 25c) Locate the subsequent ecoregion description using the appropriate biome and thereafter
ecoregion26 27 The resulting page for the ecoregion concerned will contain detail regarding
the species (particularly trees and plants) found within it. Each page will provide theacademic sources used to justify the ecoregion delineation
2. Justification should be provided that the projects and assets are consistent with the habitats andspecies identified in the relevant ecoregion(s). The verifiers must check there is agreement between
the ecoregion and the planned projects

23 This is not meant to address the possible increased fire-proness due to climate change. The resilience checklist covers that part of fire

management.

24 WWF’s shapefile can be found here: https://www.worldwildlife.org/publications/terrestrial-ecoregions-of-the-world

25 Dinerstein et al. (2017) released revised classifications of the ecoregions which increases the number of ecoregions and refined their boundaries.
However, these revisions have not yet been adopted by WWF. Therefore, WWF will continue to be used with the expectation that their classifications will
eventually be updated to reflect the study by Dinerstein et al. (2017)26 Ecoregion descriptions can be found here: https://www.worldwildlife.org/biome-categories/terrestrial-ecoregions
27 The ecoregion can be more easily found by looking under the corresponding realm

Climate Bonds Initiative Forestry Criteria Document

Disclaimer: The Climate Bonds Standard Board operates legally as an advisory committee of the Climate Bonds Initiative Board andoversees the development of the Climate Bonds Standard. Neither the Climate Bonds Standard Board nor any organisation, individual orother person forming part of, or representing, the Climate Bonds Standard Board (together, "CBSB") accepts or owes any duty, liabilityor responsibility of any kind whatsoever to any issuer which wishes to apply for any of its bonds to be certified under the Climate Bonds
Certification Scheme ("Scheme"), or to any issuer whose bonds may at any time be certified under the Scheme or to any other person or
body whatsoever, whether with respect to the award or withdrawal of any certification under the Scheme or otherwise. All advice orrecommendations with respect to any certification under the Scheme or otherwise that CBSB provides to the Climate Bonds Initiative
Board is provided to it in an advisory capacity only and is not to be treated as provided or offered to any other person