Portfolio Relevance

Practical tools and analysis lens for applying forest risk insights to your investment portfolio, with sector landscape analysis, materiality assessments, and corporate engagement data.

Sector Landscape Analysis

Sector-level forest risk landscape with both degradation and deforestation signals. Access now.

Available Tools:

  • Timber Commodity Ratio & Risk Financial Data

  • Degradation Awareness Analysis

  • Forest Stewardship Practices Analysis

Materiality Analysis

Models and references to assess financial materiality by forest- reliant sectors. Access now.

Available Tools:

  • Financial Impact Models

  • Risk Probability Assessments

  • Sector Materiality Map

Corporate Engagement

In-depth analysis on corporate disclosure and engagement strategies for forest-risk companies. Access now.

Available Tools:

  • Corporate Disclosure Overview

  • Engagement Templates

  • Resolution Tracking

Degradation Risks and Opportunities in Portfolios

Forest degradation and deforestation create material financial exposures across portfolios—even where “forest cover” remains. Regulations and investor scrutiny are rising.

Financial Materiality

Forests underpin agricultural productivity, water regulation, and carbon. When they’re degraded or cleared, costs mount quickly.

  • The World Bank estimates that ecosystem-service collapse could impose ~$2.7T per year by 2030 on the global economy.

  • New World Bank analysis links deforestation-driven soil-moisture losses to ~$380B/year (~8% of global agricultural output)—a current, measurable drag.

  • In the tropics, most gross above-ground carbon losses (2003–2014) came from degradation/disturbance, not clear-cutting, raising carbon and transition risk even where maps still show “forest.”

Source: The World Bank, Carbon PulseWorld Bank

Regulatory Pressure

Compliance expectations now go beyond “zero-deforestation.”

  • EU Deforestation Regulation (EUDR): products must be deforestation- and (for wood) degradation-free after Dec 31, 2020, with geolocation and due-diligence statements filed in the EU Information System (operational Dec 4, 2024). Large firms: Dec 30, 2024; most micro/small firms: Jun 30, 2026.

  • Other regimes tightening expectations: U.S. Lacey Act (2008) bans trade in illegally sourced wood/plant products; UK Environment Act (FRC due diligence); Germany’s Supply Chain Act; France’s Duty of Vigilance.

Investor takeaway: regulatory scope now reaches forest degradation (not just deforestation) and requires traceability to farm/harvest plot.

Source: World Resources Institute, CSR Report, Green Forum, Position Green

Stakeholder Expectation

Markets are asking for better forest-risk visibility—while demanding higher data quality.

  • Institutional investors increasingly use ESG data (e.g., 88% report increased use), but also flag greenwashing concerns (85%), pushing for verifiable, geolocated evidence in due diligence.

  • Investor bodies highlight the EUDR as a tool to identify supply-chain deforestation/degradation risks across financed companies.

Source: EY, PRI

Why Portfolio Assessment Has Been Difficult

Understanding portfolio exposure to forest risk is not straightforward. Investors face systemic obstacles that make assessments inconsistent, incomplete, or misleading.

Complex Risk Mapping

Forest exposure varies by commodity, geography, and supply chain depth, making risk comparisons across sectors difficult.

Examples:

  • Aggregated risk data that hides high-exposure regions

  • Supplier-level focus without upstream transparency

  • No clear link between commodity ratios and financial risk

How We Help:
Timber Commodity Ratio and Degradation Awareness Analysis map exposure clearly, aligning risk signals with sector- and portfolio-level impacts.

Unclear Financial Relevance

Even when data exists, translating forest signals into financial materiality is difficult, leaving investors unsure how risks affect value.

Examples:

  • Sustainability metrics not linked to financial outcomes

  • Outdated or irrelevant baselines for assessing impact

  • Overreliance on qualitative claims without models

How We Help:
Financial Impact Models and Sector Materiality Map convert forest-risk data into clear, comparable financial relevance for investors.

Fragmented Disclosures

Corporate reporting on forest impacts is inconsistent across regions, commodities, and companies. Investors are left piecing together incomplete and non-comparable data.

Examples:

  • Gaps between degradation and deforestation reporting

  • Selective disclosures by geography or commodity

  • Missing or outdated corporate data sources

How We Help:
Corporate Disclosure Overview and Resolution Tracking tools consolidate scattered data, creating a consistent foundation for portfolio-level assessment.

Tools At a Glance.

This section will give a live web overview of what each of the three tool page looks like and for another click in option for investor to explore the three main tools.