Just 14% of investment companies that signed a 2019 statement calling for companies to take action to halt deforestation in the Amazon have their own zero-deforestation policies in place, an assessment by non-profit Global Canopy has found.
Of the 235 investment firms that signed the global statement in September 2019, which collectively manage $16trn in assets, the latest data shows that only 21 have taken steps to ensure they have their own deforestation policies in place covering all of the forest-risk commodities in their portfolios.
Global Canopy highlighted Aberdeen Standard, Legal and General Investment Management and Baillie Gifford as not having a zero deforestation policy.
Another 12 out of the 235 firms have policies for timber and palm oil but not for soy and cattle, which are the main drivers of deforestation in Brazil.
Meanwhile, according to new data from the Brazilian National Institute for Space Research (INPE), the number of fires in the Amazon has shot up 13% compared to the same point last year.
Niki Mardas, global canopy executive director at Global Canopy, said: “The financial sector is fuelling deforestation in Brazil through their investments in companies in beef and soy supply chains.
“Investors raised the alarm last year because of the financial risks linked to deforestation. The situation this year is far worse, and although some investors are showing real leadership, more action is needed across the sector.”
The latest research follows the findings of the Forest 500 2019 annual report (also by Global Canopy) which found that of the 150 financial institutions with the most exposure to deforestation in their portfolios some 102 did not have a deforestation policy for any of the forest-risk commodities they invest in.
The original statement, coordinated by the UN PRI initiative and Ceres last year, called on companies to have publicly-available commodity-specific no deforestation policies, to take action to minimise their risk of exposure to deforestation and to disclose that risk.
It also called for companies to be transparent about whether they monitor if their suppliers have zero-deforestation policies and whether these are implemented, with clear annual reporting on exposure and progress.
Mardas said: “Last year’s statement was an important step. But investors can’t go silent as the problem gets worse. They need to engage on this consistently, setting clear deforestation policies and reporting on their progress.”
Global Canopy also highlighted BNP Paribas and Storebrand are some of the few firms that have zero deforestation policies covering all of the forest-risk commodities in their portfolios in place.