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Deforestation: Christian Braga for Greenpeace

Fuelling the fires: why investors need to do more to protect the Amazon

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Read the full briefing here

Summary

The scale of last year’s fires in the Amazon triggered a global reaction. In an important statement in September 2019, 235 investors* with over US $16 trillion in assets under management demanded action from companies linked to deforestation.

Since then, some investors have continued to use their leverage to engage with exposed companies. In June 2020, 22 of the statement signatories were also part of a group that wrote to and met with the Brazilian government to raise their concerns over financing companies in Brazil due to increased deforestation and human rights risks.

These are positive steps, bringing this issue to the fore for the finance sector and putting pressure on companies and governments to tackle deforestation.

Now investors need to embed this active stance in publicly-available deforestation policies – just as they have asked companies to do in their statement. Policies are important because they:

  • Send a clear signal to the market and to companies that the investor is committed to action on deforestation as a strategic priority.
  • Encourage a systematic approach to engagement and risk assessment across their entire portfolio – not just focusing on a few high-profile companies or regions.
  • Provide clarity on their expectations of companies and their approach to engagement

A small number of financial institutions have strong deforestation policies already in place. But an assessment carried out in July 2020 for this brief found that just 14% (33 of 235) of the investors that signed last year’s Amazon fires statement have taken this step.

Yet the problem has only worsened: the first six months of this year saw record levels of deforestation in the Amazon and this year the fires are raging again. At the same time, the coronavirus pandemic has exacerbated the human crisis in the Amazon.

It is vital therefore that all exposed investors set and implement clear policies on deforestation. There are more resources available than ever to help investors assess and address their exposure. This will help them mitigate their own growing risks on this issue, increase pressure on companies to take  action, and increase accountability for all.

*Of the 251 signatories to the statement, 235 investors were identified by our assessment. For the statement, see here.

 

Image: Christian Braga for Greenpeace

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Fuelling_the_fires_briefing.pdf 2.23 MB