Traders fail to guard the Amazon, conservation group finds | Latin America Information
Many of the world’s largest financial institutions, managing trillions in assets, are “fueling” deforestation in the Amazon by failing to set clear guidelines to contain the damage, a forest protection group claims in a new report.
Key institutional investors who are not subject to deforestation guidelines include Aberdeen Standard Investments, Legal and General Investment Management, Amundi Asset Management, and Candriam Investors Group. This was announced by the UK-based non-profit Global Canopy in a report published on Thursday.
“The financial sector is driving deforestation in Brazil by investing in companies in beef and soy supply chains,” said Niki Mardas, executive director of Global Canopy, in a statement.
After the Amazon forest fires hit global headlines in September 2019, 251 investors, who collectively managed nearly $ 18 trillion in assets, signed a statement calling on companies to do their part to curb the destruction of the largest tropical rainforest to the world.
However, a year later, only a handful of financial institutions calling on companies to act have put their own anti-deforestation policies in place, according to the Global Canopy report.
Meanwhile, the Amazon rainforest in Brazil is experiencing the worst fire eruption in 10 years, despite preliminary government data showing deforestation decreased 5 percent in the first eight months of 2020.
“Investors should research the companies in their portfolio for deforestation risk and develop and publish a clear policy outlining their approach [this]”Mardas told the Thomson Reuters Foundation via email.
“The key is that investors work with companies to address the problem. Investors should consider divesting them in cases where exposure has failed, ”he added.
Only 21 of the investors who signed the 2019 Declaration have their own guidelines for deforesting all the forests in their portfolios, according to Global Canopy.
These include BNP Paribas, DNB Asset Management, HSBC and Storebrand Group.
Storebrand, which has an asset management arm, states on its website that it “does not want to fund negative environmental and social impacts in this potentially high-risk sector,” adding that it would end relationships with companies that do not meet its standards.
Another 12 investment firms, including Aviva Investors, have guidelines for wood, palm oil, or both, but not for soy and cattle, although these are the main drivers of deforestation in Brazil, according to Global Canopy’s assessment.
A man cuts a tree with a chainsaw in a forest near the municipality of Itaituba, Brazil [File: Nacho Doce/Reuters]A spokeswoman for Aviva Investors, the fund manager of the insurer Aviva, said she had stepped up its commitment to cattle-related deforestation in Brazil.
Aviva has urged cattle exporter Minerva Foods to have more traceability in its indirect supply chain and has joined an investor initiative lobbying the Brazilian government on the matter, the spokeswoman added.
Among those identified as missing in the report, global asset manager Candriam told the Thomson Reuters Foundation that it was working with the same investor initiative, adding that deforestation and biodiversity loss are among the “many issues” that the review of the Company guidelines are taken into account.
Big British investor Aberdeen Standard hoped that its commitment to business would “drive change and put pressure on tougher policies”.
Legal and General Investment Management said it has so far excluded four food companies from certain sustainable investment funds due to a specific lack of deforestation measures.
Amundi did not respond to Reuters’ request for comment.
On Friday, 39 banks and corporations, together with think tanks and the governments of France, the United Kingdom, Switzerland and Peru, set up a “Task Force on Nature-Related Financial Claims” to address market failures that contribute to the destruction of nature such as forests .