Fires in the Amazon: Why investors are calling on companies to help end deforestation Home / News Center / Blog Posts / Fires in the Amazon: Why investors are calling on compa...
October 22, 2019 Julie Nash, Ph.D. Food, Forestry, and Land Use Images of the Amazon rainforests engulfed by smoke and flames that spread across the globe in recent months were a clear signal about the growing urgency to tackle devastating deforestation. The ongoing destruction reminded us of the need to ensure that we all do our part to protect the Amazon, the world’s largest rainforest.
Tropical rainforests play a critical role in tackling the global climate crisis, protecting biodiversity and helping ecosystems thrive. Major investors and corporations, in particular, increasingly recognize the material financial costs and risks of failing to address deforestation in investment portfolios and along their operations and supply chains. In just the past five years, we have seen a proliferation of environmental, social and governance (ESG) indices and a growing shift to include these issues as material aspects of investment portfolio management and risk mitigation.
In response to the fires, a record number of more than 230 institutional investors representing USD $16.2 trillion in assets under management issued an urgent call to action last month for companies to tackle deforestation in their operations and global supply chains. Their message was clear: “As investors, who have a fiduciary duty to act in the best long-term interests of our beneficiaries, we recognize the crucial role that tropical forests play in tackling climate change, protecting biodiversity and ensuring ecosystem services.” Specifically, these investors are asking companies to publicly disclose commodity-specific no deforestation policy, establish a transparent monitoring and verification system for supplier compliance, and report annually on deforestation risk management, including progress on implementation of their nodeforestation policy.
There is growing momentum among institutional investors demanding action from their portfolio companies on climate change mitigation, alignment with the Paris Agreement goals, and eliminating deforestation in soybean and cattle production. Investor engagement with companies at this unprecedented level has
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