Moving investing and sustainability forward, together 38 Bioenergy International No 81, 5-2015 www.di-piu.com info@di-piu.com Low Electrical Consumption Best Density High Reliability Low Maintenance The most cost efficient briquetting technology MARKETS AND FINANCE investors are looking to social and environmental sustainability requirements as a way to gauge and mitigate risks before making investment decisions on bio-based projects. Recently the Roundtable of Sustainable Biomaterials (RSB) and Everest Energy brought investment and sustainability actors together to a stakeholder meeting to discuss the issues of assurance, verification and RSB certification as a tool. The overall aim was to figure how to work together to increase demand for high quality sustainability frameworks, ensure effective management approaches and contribute to de-risking the entire value chain. Going forward all financial institutions will have, and require from project developers, a sustainability chapter. This means that any lending provided to a project will need to adhere to the chosen sustainability framework established by the lender, but how does an investor verify a potential borrower’s sustainability and associated environmental and social risks? That’s why RSB and Everest Energy found it critical to bring together the financial sector to implement RSB sustainability certification as a tool for that much-needed assurance and verification. The RSB is an independent and global multi-stakeholder coalition, which works to promote the sustainability of biomaterials. RSB’s user-friendly certification scheme is the strongest and most trusted of its kind, verifying that biomaterials are ethical, sustainable and credibly sourced. Everest Energy is an independent global energy project developer and project advisor specialised in structured and “hands-on” project development, project finance and strategic project structuring who is working to support RSB in its engagement with the private sector. RSB views its sustainability certification product as a tool for the financial sector to verify sustainability, promote effective management and reduce risk throughout the development value chain. All bio-based projects seeking project finance from a financial institution could use RSB certification to demonstrate that they are truly environmentally and socially sustainable. At the moment, a project developer is faced with a multitude of different sustainability programs used by international financiers, leading to a number of challenges: 1. The project developer has to undergo a lengthy analysis of each program. This analysis comes at a cost and will be paid for by the project, therefore increasing the project development burn costs. 2. If a project or facility wishes to engage with several funders with several sustainability programmes (e.g. a development bank and a commercial bank) a “battle of forms” emerges. The potential solution to this problem is to create a win-win-win situation for a) RSB, b) the project developer and c) the financial institutions. This is done by showing that the RSB product adds value for: 1. The project when obtaining finance by using RSB as a pre-finance development tool 2. The financier if RSB is recognised by the institution as a standard of “good practice”, hence de-risking the evaluation process. Commercial investors expressed interest in becoming potential RSB members – first, to create awareness of ongoing dialogues within RSB and second, to influence project developers to commit to RSB’s sustainability principles and obtain certification as this will become increasingly important for sustainable projects to secure finance. The earlier in the development cycle that a project adopts the principles of an independent, global multi-stakeholder certification system, the easier and less costly it will be to develop and operate the project within the sustainability framework. To achieve this goal, workshop participants recommended investigating the potential of new RSB products in the project development chain. The creation of an Investor Working Group (IWG) was also recommended. BI81/4992/AS Photo courtesy: RSB
Bioenergy no 5 September 2015
To see the actual publication please follow the link above