The claims concern Fibria, a Brazilian firm that raised $700m (£560m) in 2017 through a sale of self-labelled green bonds. Earlier this year, Fibria merged with Suzano Papel e Celullose, the supplier of pulp for brands such as Andrex and Kleenex.

The allegations by environmentalists centre on one of five projects financed by funds from Fibria's first green bonds, due to be repaid in 2027: sustainable forest management.

According to the company's latest Green Bond Report, the activity ate up two-thirds of the bonds' entire proceeds between 2015 and 2018. A much smaller $22.5m was spent on restoring native forests and biodiversity conservation, waste management, water management, and renewable energy.

Sustainable forest management as practised by the company has come under fire on several fronts.

The Green Bond Report shows that over half of the $459m "sustainable forest management" expenditure disclosed so far was used to buy wood from sustainable sources - something not mentioned in Fibria's plans before the bonds were sold. That is the first criticism, summed up by one environmental organisation as "purchasing wood instead of protecting forests".

Suzano responded in a statement: "The company practises both initiatives separately and one activity does not occur to the detriment of the other."

It added: "By acquiring certified wood from the market, the company is driving demand for sustainable forest products."

The second criticism is that even the portion of "sustainable forest management" funds that was spent on forests is producing few environmental benefits and may even be counterproductive.

The activity as defined by Fibria includes preparing soil for the plantation of eucalyptus seedlings, ploughing deep into the land; planting the seedlings; and maintaining them until harvesting.

But preparing land for plantations "exposes soil, which contains CO2, and leads to huge amounts of emissions", says Wolfgang Kuhlmann, a forestry researcher and consultant.

Moreover, eucalyptus plantations remove less carbon dioxide from the atmosphere than natural forests, which would grow on the same land without any intervention if given the chance, says Simone Lovera, executive director of the Global Forest Coalition, which promotes social justice in forest policies.

The company is therefore "indirectly replacing forests with plantations", she says. "The carbon losses are tremendous."

Research supports both of these claims. For example, an article in Nature, published in April, states: "Plantations hold little more carbon, on average, than the land cleared to plant them... The regular harvesting and clearing of plantations releases stored CO2 back into the atmosphere every 10-20 years. By contrast, natural forests continue to sequester [remove] carbon for many decades."

A study co-authored by Mr Kuhlmann details the environmental impact from the harvesting of Fibria's eucalyptus plantations, which it says occurs every seven years on average. About half of the resulting wood is usually burnt to produce energy, "releasing carbon immediately", while the other half is made into short-lived consumer products such as office or tissue paper.

"Within two-three years after harvest, almost all the 'stored' CO2 is re-released into the atmosphere," says the report by the Environmental Paper Network (EPN), a global collective of researchers focused on climate and forest protection.

Niall MacDowell, senior lecturer in energy and environmental technology at Imperial College, London, echoes this assessment.

"CO2 absorbed by the biomass cannot be considered 'stored' if that biomass is subsequently harvested and combusted, with the resultant CO2 vented to the atmosphere," he says.

Cristiano Oliveira, Suzano's sustainability manager, admits that preparing land for plantations releases some carbon but says the amount is "small" because the company places leftover bits of harvested trees over the soil.

He adds that this practice makes burning the wood from the harvested trees "carbon neutral". But it is not clear how a small amount of emissions from the first activity cancels out more emissions from the second.

'Unrealistic' carbon savings?

There is also confusion over how much carbon is absorbed by Suzano's eucalyptus trees.

The company appears to have at least two different answers to this question, neither of which tallies with external estimates.

Fibria's first Green Bond Report, published in April 2018, puts yearly CO2 savings at 65,175 tonnes across 537 hectares of eucalyptus plantations on one of its sites - which works out as 121.4 tonnes per hectare per year.

"This seems unrealistic," the EPN says in its study published in May this year, estimating that a hectare stores only 36.7 tonnes of CO2 per year.

This estimate is close to a calculation given to The Independent by Jeremy Woods, a lecturer in bioenergy at Imperial College. He puts the likely savings at 31 tons, although he adds: "Much higher productivities are possible and indeed achievable."

Mr Oliveira responds to the criticism by the EPN by saying the organisation did not see the methodology the company used to calculate the carbon savings.

"I think we will be more transparent in terms of this and, once they see this, they will realise it's more realistic than they imagined," he said.

Suzano did not respond to repeated requests to see the methodology.

It did provide its latest Green Bond Report, dated May 2019. The figures contained in it, regarding another of the company's eucalyptus plantations, produce a different estimate of carbon savings: only 2 tonnes per hectare per year.

Lastly, eucalyptus plantations have been linked to environmental problems - for example, depletion of local water sources by the water-hungry trees.

Still, Suzano has defended its green bonds, saying high-yield eucalyptus plantations are "one of the most effective alternative sources of wood for diverse end-uses, reducing deforestation of native forests".

Lack of common approach

The concerns raised about the true environmental benefits of Fibria's bonds prompt the question: how did the company secure a green label for them back in 2017?

The EPN study says such designation is usually up to the issuers themselves, who explain how the bonds' proceeds will be used for environmental projects, but for more transparency issuers can commission an external organisation to assess the bonds' green credentials.

This is the approach taken by Fibria. In November 2016 it obtained a so-called Second Party Opinion from auditors Sustainalytics.

Sustainalytics concluded that spending plans for the bonds' proceeds were in line with the Green Bond Principles set out by the International Capital Market Association (ICMA) in 2016 and that eligible projects will have "a clear impact" on climate change mitigation.

Suzano says: "Fibria's green bond was created using the most recognised references and guidelines available... Furthermore, the company chose to undergo voluntary exercises, such as going through a second opinion provider."

However, the EPN study argues ICMA's Green Bond Principles are general and do not take into account the peculiarities of investing in plantations or forests.

Concerns have also been raised about inconsistencies in the labelling of bonds as green. For example, a proposal in June for a European Union green bond standard notes a lack of a common approach among external reviewers of such bonds and their "very diverse" levels of environmental expertise.

"[This] creates uncertainties for issuers and investors on the actual value, quality and impact of the external reviews," it says.

The issue is also being addressed at the international level. The International Organization for Standardization (ISO), is working on global standards for green bonds.