Sicirec Rating System

Sicirec Rating System for commercial reforestation projects

The rating is divided into two main parts:


 * Rating for Financial Security (F)
 * Rating for Ecological Quality (E)

And a supplemental part:


 * Rating for Specific Situations (S)

Purpose of this rating
The rationale for combining the two separate quality categories of financial security and ecological quality, is the goal of establishing a clear formula in the market that combines these values insepearably, in such a way that the investor can be sure of both aspects. The investor must be able to expect a decent profit with a sufficient measure of certainty, while at the same time being sure that through this investment he helps to produce a measurable ecological improvement on a lasting basis. Market research shows there is a gigantic market for this type of product laying dormant, struggling to wake up and find an outlet. Until now, this outlet has never been realized. The general idea is that the more the environment is violated, the lower the costs and the higher the profits that can be made. In spite of all the "green" investment funds that have emerged during the last decade, there are still no clear examples available for the investing public to combine the two values of financial profit and ecological profit in a convincing way. To date, the profits realized from those "green" have been in general very low, whereas the "green" aspects are, at best, doubtful. If the above-mentioned goal will be achieved, this situation will change drastically.

Weight of financial and ecological parameters
Since, at this moment, profitability is the most pressing and debated aspect of the (teak) reforestation projects, the financial parameters are given 17 % more weight than the ecological parameters. The ecological parameters can, in principle, be upgraded afterwards - albeit at considerably higher costs - whereas the financial parameters must be healthy from the start in order for the project to not fail.

Specific situations
The rating category "specific situations" (S) is utilized in case some important aspects, that are not covered by the existing rating scheme and that are idiosyncratic for the plantation in question, have to be taken into account. Such special aspects can be either positive or negative.

Rating scale
To avoid suggesting an accuracy that is unrealistic, the (sub and final) results are translated to a 5-point scale as follows:

Ratings and projections of revenues
Internally Sicirec utilizes the rating for estimating the revenues to be expected. To that end the rating for Financial Security (F) is multiplied with the yield expectation for the ideal case.

Graphical overview schedule
[[Media:Rating_schedule_20080606.pdf‎|Graphical overview schedule of the Sicirec Rating System, all Rating Criteria and their relative weight.pdf]]