Terms of reference for evaluation of Rainforest Foundation Norway work towards the financial sector

Introduction

Rainforest Foundation Norway (RFN) aims to halt deforestation and human rights violations by commercial actors through targeted actions in the financial sector. By advocating for the integration of nature and biodiversity by financial institutions, including deforestation-free policies aimed at halting commercial deforestation, developing risk alert systems, and providing specialized knowledge building, RFN will empower financial institutions to influence companies in forest-risk value chains.

Rainforest Foundation Norway has a program within the NICFI programme 2021-2025 that includes targets towards the financial sector. The main outcome is: “Targeted banks and investors avoid funding commodity production that drives deforestation or violates the human rights of IPLCs.”

In order to achieve this outcome RFN engages directly with investors. Facilitating both collective and bilateral initiatives, and leveraging partnerships with NGOs, academic institutions, international organizations and networks. In the theory of change for the program these efforts are essential to promoting sustainable business practices, mitigating material risks, and aligning with global sustainability goals. This will ensure that financial institutions avoid funding of commodity production the drives deforestation.

The program has been a five-year program with 2025 as the last year. It will be necessary to evaluate if the outcomes will be reached, and if the strategy toward financial institutions is the most effective considering RFN’s position. This evaluation will help guide RFN in future programs and workstreams targeting financial institutions and change in corporate behaviour. The targeted investors are mainly based in Western Europe, but with a newer workstream also involving Chinese financial institutions.

Background and rationale

The primary drivers of deforestation and forest degradation include agricultural expansion, logging, and mineral extraction. These activities pose significant environmental risks and threaten the rights and livelihoods of forest-dependent communities. Financial institutions, as shareholders and financiers of companies within these forest-risk value chains, are uniquely positioned to influence corporate behaviour towards sustainability, making them a relevant actor to target alongside, and addition to other strategies focusing on public opinion, regulation, and direct dialogue.

For several years, RFN has focused on identifying and targeting financial flows associated with unsustainable resource extraction, addressing the issue on a systemic level. This is based on RFN’s unique expertise informed by partnerships with organizations based in rainforest countries, of how companies’ supply chains drive deforestation and forest degradation.

Over time, RFN has established itself as a credible authority among financial institutions on forest and nature risk, cultivating an extensive network of key stakeholders and enhancing its ability to drive impactful reforms within forest-risk value chains. RFN has strategically aligned its efforts with global sustainability initiatives, such as the UN Sustainable Development Goals (SDGs), the Paris Agreement and the Kunming-Montreal Global Biodiversity Framework (GBF). This has helped attract support and credibility from global stakeholders, enhancing RFN's influence and impact.

Purpose

The primary objective of this evaluation is to gain a deeper understanding of whether RFN's strategy of guiding investors to influence their investee companies is effective in achieving the desired outcomes of the agreement. This evaluation focuses specifically on the efforts of the Deforestation-Free Markets team on the global level under the NICFI agreement and does not include work carried out by partners or country teams within RFN that contribute to the same overarching outcome.

The findings will be used to assess the strategic choices made by RFN to date and to develop a more efficient approach to engaging with financial institutions. Additionally, the evaluation aims to identify which target groups within the financial sector that offer the greatest potential for success and how these insights could refine RFN's theory of change.

Evaluation use and users

The evaluation is part of the agreement with NICFI and will assess the first four years of the program, providing guidance for future work involving financial institutions to increase RFNs effectiveness, impact and additionality to our partners and country teams. Additionally, it will inform the strategy for engaging with financial institutions across other workstreams under different donor agreements – most notably the Norad framework agreement.

Objectives

The evaluation should assess the impact of the program going in its the last year, review the effectiveness of the strategy and approach taken towards financial institutions. It will also be necessary to provide a literary summary of research on the effectiveness on different approaches towards the financial institutions. Evaluation questions Developing key evaluation questions will be a part of the inception phase of the evaluation, to concretize the evaluation within the scope. In the following there is a list of questions that RFN would like to see included in the evaluation:

1. Overall impact and effectiveness:
   
   a. Has the work carried out under the NICFI agreement had a measurable impact on financial institutions’ policies and practices, as well as on the policies and practices of the companies they invest in? Are the observed changes in financial institutions’ behaviour following RFN intervention?
   
   b. How effective has this work been in achieving the overall goal of reducing deforestation?
   
2. Targeting strategies:
   
   a. Is the current strategy, as defined in the strategy document for the finance sector work, and the theory of change for the drivers work of identifying and targeting the right investors and companies, effective? What adjustments, if any, are needed to improve the strategy’s effectiveness?
   
3. Engagement approaches:
   
   a. Is RFN's strategy of engaging with investors to influence their investee companies through their company engagement the most effective approach for achieving meaningful impact on the policies and practices of financial institutions and investees?
   
   b. Is RFN's current strategy of influencing corporate behaviour without advocating for divestment the most effective approach to achieve sustainability goals?
   
   c. Could alternative approaches, such as focusing on standardization of frameworks, advocating for stronger national and international regulations, or by standard-setters, yield greater results?
   
4. Public campaigns vs. investor engagement:
   
   a. Is the strategy of working with financial investors to influence investee companies more effective than using a public-facing campaign to drive change?
   
   b. What are the comparative advantages and potential trade-offs of these approaches in achieving desired outcomes on both the investor and company levels?

Scope

The scope is to evaluate the work that the Deforestation Free Markets team has done towards financial institutions under the five-year NICFI agreement. This may also include some of the work done under the Framework agreement with Norad as the workstream overlap.

Methodology

The methodology will be decided in dialogue with RFB and the evaluators. The choice of method is therefore to be proposed in the tender and can be a mix between qualitative methods and quantitative as well as to give a research overview.

In line with the deliverables listed below we ask for the following:

• Review of relevant existing reports and scientific literature on the strategics choice of working “behind the scenes” vs. a more public approach to towards financial institutions and companies.
• Overview of data sources.
• Clear overview of key caveats and assumptions for any included projections.
• The selected assumptions should be rooted in evidence and plausible at the time of analysis.

Deliverables

1. Inception report

• Description of research strategy: Analytical approach, methodology, selection of scope or geographical focus. The decision about methodology will be taken after the inception report.
• Summary of already collected/identified information sources and data
• Identification of gaps in data/information available.
• Description of planned case studies and/or interviews.
• List of informants.
• Key evaluation questions if these are modified/different from this ToR. The questions can also be more limited than suggested in the report.
• Draft outline for the evaluation.

2. Presentation

Before the final report is prepared, the consultant shall organize a presentation of selected elements of the draft report to RFN, and to involved partners (via online solutions if needed). The aim of this presentation is to receive feedback on findings and preliminary conclusions and recommendations, as well as to facilitate use of the evaluation.

3. Final report

The final report is to be submitted after feedback has been received and integrated into the draft report. The final report should be submitted as a final, proof-read version, in a reader-friendly layout, and submitted electronically. The report shall be in English and constitute a maximum of 30 pages, excluding annexes. It should contain at least the following sections (not exhaustive):

• Executive summary. The executive summary shall consist of max. 2 pages and provide brief summaries of all the main parts of the full report.
• Introduction and context background.
• Description of the evaluation process, questions and methodology for data collection and analysis including scope, constraints, and limitations.
• Brief description of the projects evaluated.
• Findings and conclusions.
• Recommendations for the remainder of the program and future programming to be implemented by RFN.

Timeline

The research project is expected to be conducted over 4-6 working months with regular progress updates and milestones, starting from March 2025. The final deadline, milestones and progress updates will be agreed in dialogue with RFN and specified in the contract.

Budget

Total of 160 000 NOK. This will include necessary travel costs and other costs related to obtaining the knowledge necessary.

How to apply

Candidates interested in submitting a proposal should email the documents listed below to Ingrid Tungen, ingrid.t@rainforest.no, by 9th of March, 2025.

Candidates must submit the following:

• CV of all members in the team, and a summary (maximum two pages combined) of their qualifications.
• Proposed methodology and timeline, max 2 pages.
• A financial offer, including daily fees based on 8 working hours per day. If team members have different fees, the expected division of labour between them must be indicated. Include any other costs necessary to carry out the research.
• At least two references (including contacts) for similar work.

Questions regarding the assignment can be submitted to the main contact.

Main contact: Ingrid Tungen, ingrid.t@rainforest.no.

Selection criteria

The study shall be carried out by one consultant or a team. Among the proposed individuals/teams, RFN will select the candidate(s) that provide best value for money based on a consideration of:

• to what extent the consultant/team are well suited for the task, emphasizing in-depth expertise (including academic work and/or implementation) and the relevance of the specific technical expertise and experience of the team member(s),
• the proposed methodology and
• the total cost of the proposal.

Eligible tenderers

• Tenderers must provide information on their legal form and ownership structure.
• Tenderers shall be excluded from participation in a procurement procedure if:

(1) they are bankrupt, are having their affairs administered by the courts, or have suspended business activities.

(2) they or persons having powers of representation, decision-making, or control over them have been convicted of an offence concerning their professional conduct by a final judgment.

(3) they have been guilty of grave professional misconduct.

(4) they have not fulfilled obligations relating to the payment of social security contributions or taxes in accordance with the legal provisions of the country in which they are established, or those of the country where the contract is to be performed.

(5) they or persons having powers of representation, decision-making, or control over them have been convicted for fraud, corruption, involvement in a criminal organization or money laundering by a final judgment.

(6) they make use of child labour or forced labour and/or practice discrimination, and/or do not respect the right to freedom of association and the right to organize and engage in collective bargaining pursuant to the core conventions of the International Labour Organization (ILO).

• Tenderers shall confirm in writing that they are not in any of the situations listed above. RFN reserves the right to investigate any of the situations listed above if it has reasonable grounds to doubt the contents of such confirmation.
• Contracts shall not be awarded to tenderers which, during the procurement procedure:

(1) are subject to a conflict of interests.

(2) are guilty of misrepresentation in supplying the information required as a condition of participation in the tender procedure or fail to supply this information.

Ethical considerations

Ethical considerations will be upheld throughout the research process, ensuring informed consent, confidentiality, and respect for the rights and privacy of participants. The assignment should be conducted in accordance with the highest professional standards. As such, the work will ensure sensitive, safe, non-discriminatory participation, confidentiality, and anonymity of respondents. Specific consideration must be given to ethical issues of design, data collection, reporting and storage. According to the EU General Data Protection Regulations (GDPR), the consultancy must maintain appropriate measures to protect personal data. Info on GDPR can be found here: https://gdpr.eu

Documents of interest

Theory of change map for the investor work

RFN will provide further detail and information upon request for the project. These include definitions of outcomes and indicators for the NICFI agreement and the RFN board case for finance strategy, dated 19. June 2024.

Please send requests to: Ingrid Tungen, ingrid.t@rainforest.no.