Forestry in Asia: Issues for Responsible Investors

China, Indonesia and Malaysia comprise of over half of the forestlands across Asia. All three have struggled with deforestation, and their governments are actively encouraging the development of plantation forests, which are oriented towards wood production, not conservation.

Environmentally, forestry risks include deforestation, driven by aggressive expansion of the palm oil industry, and pressures on land resources due to demand for biofuels and agricultural products. The growing mineral and mining industry poses other environmental risks, straining not just forests but surrounding areas and waterways. Another concern is the exploitation of forests with high conservation value and significant biodiversity. In 2010 ADMCF contributed to authoring a report that outlines ESG issues that responsible investors should consider when looking at the forestry sector and, by association, the pulp and paper industry.