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The following article was written by Michael D. Underhill, Chief Investment Officer at Capital Innovations LLC.

As a veteran of the institutional investment management industry for over two decades, I have seen a series of booms and busts in the market driven by irrational investor behavior, opacity of markets and lack of information. Managing global timber, infrastructure and agribusiness strategies affords a unique view on the market and reinforces the importance of conducting one’s research into specific issues around company fundamentals and sustainability (i.e., a company‘s capacity to prosper in a hyper-competitive and changing global business environment).

Corporate governance issues have plagued investors particularly with respect to corporate management, transparency, and regulation in emerging markets. Three recent examples of this are Sino-Forest Corporation, China Forestry Holdings, and Cathay Forest Products.

The environmental, social and governance (known as “ESG”) issues around Sino-Forest Corp, which led to its current debacle, were a confluence of events which included:

• The lack of clarity in the Chinese log market.

• Investor concerns over the economic slowdown in China.

• WSJ's Heard on the Street column raised concerns about Chinese agriculture and forestry companies.

• The call to question of the credibility of Sino-Forest Management due t......................

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