Due Diligence

A key component of any successful business, including in the Forest Products sector, is access to capital, and RFS plays a part in bridging the information gap that too often exists between operators in the sector and financing institutions.  The performance of Due Diligence is key to the screening of investment opportunities, and the assessment of the bottom-line viability of businesses anywhere in the world.  RFS Principal Nick Moss Gillespie gained invaluable experience, prior to the establishment of RFS, working with cutting-edge investment advisory firm Innovest (ISVA) on the qualitative and quantitative rating of companies’ environmental and social performance; Nick’s focus was on natural-resource sectors, including the Forest Products sector.  Since founding RFS, Nick built on this early exposure to Forest Finance, working with UK-based EnviroMarket Ltd., a leading innovative financial consultancy, on a proof-of-concept study (commissioned by IFC and DfID) on EcoSecuritization, and the feasibility of issuing forest-backed bonds.  A further engagement with EnviroMarket on behalf of WWF aimed at assessing the forest investment screening policies of Financial Institutions, and the difficulties that producers in emerging economies face in raising capital.

Subsequently, Nick built on this experience to engage in the evaluation of forest-sector companies’ performance, and the benchmarking of aspects of their management, as part of investor Due Diligence.

Clients include Impact Investors such as the EcoEnterprises Fund (initially launched by The Nature Conservancy US), utilizing a methodology focused on financing aspects as well as management strategies, and including extensive document review and in-depth interviews with company officers and owners, as well as fieldwork to assess both social and environmental performance indicators.  Deliverables inform portfolio management process for the EEF, and provide monitoring function of ongoing project activities.  More recently, under EcoEnterprises Partners II, Nick has conducted Due Diligence on a major producer of non-timber forest products in the northern Brazilian Amazon.