The first step for strategic planning of new investments.
The evaluation of new investments from a socio-environmental perspective (commonly referred to as due diligence) generally involves the following objectives:
» Identify and assess risks related to the environmental regularization process of the project.
» Verify, when applicable, the feasibility of the scheduled timelines for project implementation and/or operation.
» Evaluate the realism of the costs associated with conducting studies and implementing programs and projects.
All these objectives are effectively applicable and important.
However, a socio-environmental due diligence can assume much greater strategic relevance for the investor, becoming the first instrument for the detection and analysis of explicit or latent socio-environmental risks and conflicts, and for the definition of ways to prevent and mitigate them.
The analysis also enables the evaluation of potential networks of relationships and local and regional partnerships to implement actions, as well as the identification of alternatives for the so-called ESG (Environmental, Social, and Governance) investments under Corporate Social Responsibility (CSR), beyond licensing obligations.
In summary, an “intelligent” socio-environmental due diligence allows, even at preliminary levels, an assessment of how variables that influence levels of social legitimacy in the region where the investment opportunity is located behave in the current scenario and over time.
Consequently, it will be possible to outline strategies for the investor’s involvement in the territory, seeking to prevent and minimize risks, preserve their socio-environmental schedule and budget goals, and not only protect but also leverage their corporate image.
Throughout our operation, we have conducted over 40 due diligences for electricity generation and mining projects of various sizes, serving both national and multinational clients.
With the expertise gained, we at Ferreira Rocha continuously refine our methodology for the development of these services.
Several factors have proven to be crucial in achieving all the strategic objectives presented in this article.
Even in the first phase of socio-environmental due diligences, which typically lasts around four to five weeks and is based solely on existing data and information, we know that it is important to consider seven key factors:
1. Involvement of an exclusively senior team in the due diligences, highly experienced in:
(i) studies and projects for environmental licensing of projects in different sectors and sizes,
(ii) planning, implementation, and critical analysis of stakeholder engagement, and
(iii) compliance with action plans carried out by independent consultants of funding institutions signatory to international socio-environmental performance standards.
Our team’s credentials include over 330 studies and projects conducted by Ferreira Rocha in the energy, mining, and real estate sectors.
2. Partnership with a specialized team for legal analysis in environmental due diligences, provided by the law firm Ricardo Carneiro, but with the necessary flexibility for Ferreira Rocha to also work with other teams already hired by the client.
3. Capacity for interaction, at least from the coordination team of socio-environmental due diligences, with international technical teams of multinational clients, allowing for constant updating of our methodology and analysis criteria.
4. Availability of criteria for identifying and evaluating negative risks and development opportunities based on compilation and analysis of international socio-environmental performance benchmarking, including performance standards from the International Finance Corporation (IFC), AccountAbility, International Council on Mining & Metals (ICMM), and the Equator Principles.
5. Utilization of conceptual and methodological frameworks associated with Social License to Operate (LSO), Social Participation, Ecosystem Services, and the Sustainable Development Goals (SDGs), among others.
6. Application of integrated geospatial analysis techniques and software using georeferenced databases provided by national and international entities.
7. Preparation of executive summaries resulting from the due diligence process, with detailed technical appendices, enabling the evaluation of the work’s results by both corporate decision-making levels and the technical teams of our clients.
In this regard, three out of our four largest clients for this type of service have repeatedly engaged us for assessments of new investments: one for a total of 28 small and medium-sized hydroelectric projects, another for two medium and large-scale hydroelectric plants, and the third for two large-scale mining projects.
We are open to showcasing our methodology and portfolio of services conducted for the evaluation of new investments under the socio-environmental framework! And we remain attentive to customizing our processes and services to better meet your objectives and goals for your business or project.
Count on us! Thank you for reading.
Delfim Rocha
Chief Executive Officer
Ferreira Rocha Assessoria e Serviços Socioambientais