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Environmental, Social Governance Integration Expert

UN Environment Finance Initiative

See full vacancy and apply on the UN Careers Portal

 Result of Service

The ultimate result of the service will be the establishment of enhanced ESG policies, processes and procedures by the banks that will take part in this project to better capture deforestation risks in their books. Equipped with better tools to understand the scope of the risks they are exposed to, the target banks will be allowed to develop and implement appropriate strategies to reduce their contribution to the economic activities driving deforestation in the palm oil, beef and soy production sectors.

Work Location

Working remotely

Expected duration

7 Months between 1 June – 28 December 2018

Duties and Responsibilities

UNEP Finance Initiative in collaboration with the International Finance Corporation and the World Wildlife Fund is executing a GEF funded project on enabling transactions for removing deforestation from commodity supply chains (“Good Growth Partnership”, hereinafter referred to as GGP) with a focus on palm oil in Indonesia and Liberia, and beef and soy in Brazil and Paraguay. The project is comprised of three components:

1) Support to commercial transactions
2) Support to Financial Markets & Institutions
3) Support to Governments

In a rapidly evolving operating environment that increasingly recognize the importance of forests in supporting the functioning of agricultural commodity supply chains, risks created by unsustainable deforestation present a considerable threat for the long-term value of companies producing, transforming, transporting and selling these commodities.

For the financial institutions that invest in these companies, the misperception and even ignorance of these risks can result in a suboptimal allocation of the assets under their management and in imperfectly hedged and therefore not recoverable losses.

The investment community often relies on the inclusion of Environmental, Social Governance (ESG) criteria in their investment decision-making processes to identify and manage potential environmental and social risks in their positions. To date, deforestation risks have either been ignored in ESG criteria or inappropriately factored in.

In order to fill that gap, the consultant will be responsible for the formalization of improved ESG criteria and financial decision-making inclusive of deforestation risks as they relate to investment in and lending to the soy, beef and palm oil sectors. More specifically, the consultant will be tasked with producing a number of briefs reviewing the existing ESG models and the extent to which they capture deforestation risk in soy, beef and palm oil sectors, documenting the existing barriers preventing the adoption of deforestation criteria, and recommending guidelines and solutions to promote enhanced integration, (ii) to organize outreach activities to sensitize stakeholders of the importance of including criteria of deforestation risk in their decision-making processes, (iii) to backstop efforts related to the program mentioned in the TOR and other related issues of the GGP Programme, (iv) to contribute to the project management of the inter-related components of the Program, including global coordination and management of in-country consultants and (v) to draft project briefs, proposals and other materials related to the overall Programme.

The specific objectives of the consultancy include:
1. Taking stock of the current level of inclusion of deforestation risks in ESG criteria and financial decision-making related to the soy, beef and palm oil sectors, reviewing existing practices with the objective of informing the formulation of best practice recommendations.
2. Working on a complete understanding of the conceptual and practical hurdles limiting the inclusion of deforestation risks in ESG criteria.
3. Listing the different requirements that would have to be met to accurately reflect deforestation risks (e.g. type of data, existence and nature of monitoring systems…)
4. Suggesting criteria and metrics for inclusion along with best implementation practices, in collaboration with partnering financial institutions. Recommendations will have to reflect the findings of the Value at Risk and business case research teams
5. Disseminating the recommendations through an active engagement process with the investment community and financial institutions more broadly
6. Supporting the Project Manager in ensuring effective coordination with the partner IAP implementing agencies
7. Contributing general backstopping to support the work of in-country consultants related to ESG integration

1. Two technical briefs, one on palm oil, the other on beef and soy:
(i) Reviewing the existing ESG models and the extent to which they capture deforestation risks
(ii) Documenting the existing technical/conceptual/practical hurdles hindering the broader adoption of deforestation criteria in the existing indicators
(iii) Listing the different requirements for a successful inclusion of deforestation risks in financial decision-making
2. A draft framework of guiding principles to identify, select and compute deforestation criteria and include them in ESG factors relevant to the commodity trade finance community
3. An impact assessment examining the effects of integrating deforestation risks in ESG criteria on the financial institutions’ investment decisions and their portfolio allocations. As part of the impact assessment, a quantification of the financial gains resulting from the improved pricing of investment risk will have to be undertaken.
4. Series of workshops and/or webinars to disseminate the results of the analysis and reinforce the engagement process with the investment community

Specific tasks and responsibilities:
The consultant will provide advice, analytical skills and expertise in the area of ESG finance to contribute to the overall objectives of the program. The consultant’s main tasks will include:
1. Conduct interviews with industry expert, review scientific and technical literature and use own expertise and judgement to accurately describe the current situation regarding the inclusion of deforestation risks in ESG criteria.
2. Coordinate with the business case teams and the Value at Risk teams to converge on a common definition of deforestation risk, to ensure conceptual and definitional consistency across the program’s components.
3. Define new ESG criteria that can capture effectively the risk dimension of deforestation in beef, soy and palm oil supply chains.
4. Explore integration options and investigate the extent to which they improve investment decisions by securing partnerships with a small number of asset managers.
5. Provide ESG criteria inclusive of deforestation.
6. Participate in global and country GGP coordination calls, provide inputs and contribute to the formulation of UNEP FI’s work program as it related to the GGP Program of Work.
7. Assist in-country consultants in establishing and managing engagement with financial institutions and facilitate coordination with GGP partners on country initiatives involving the financial sector.

Qualifications/special skills

Skills: The ideal candidate should have strong expertise in the integration of ESG criteria for the financial sector and previous experience in assisting banks in their integration efforts. Knowledge of REDD+, zero deforestation commodity supply chains, and other landscape investments would also be an asset.

Academic Qualifications: Master’s Degree in one or several of the following areas: economics, finance, business administration, international relations, development studies or environmental management.

Experience: At least five years of work experience, working in the area of sustainable finance either in the private sector, or an international or non-governmental organization working on environmental finance.

Language: English is a working language of UNEP FI. Knowledge of other United Nations languages is an asset.

See full vacancy and apply on the UN Careers Portal