October 2019 Message from Lead Consultant
New IMM study on Forest Sector investment
Key findings of a new IMM study on FLEGT impact on forest sector investment include that while investors recognise the risk mitigating potential of FLEGT, they see little real impact to date. The study covers VPA implementing (including Viet Nam and Honduras) and FLEGT-licensing VPA partner countries and is intended to provide a baseline for monitoring potential impacts of FLEGT VPA implementation and FLEGT-licensing on investment decisions in the forest and timber sector. The study finds that in theory, FLEGT hosts an array of activities and tools that enhance forest sector attractiveness for investments by reducing typical risks. All investors interviewed for the study recognised this risk mitigating potential of FLEGT. However, according to the study, most of these risk-mitigating characteristics only materialise when a VPA becomes fully operational. Moreover, the importance of risks associated with weak law enforcement and governance structure is rated lower by investors than more specific technical and economic project risks.
Read the full report here.