Stockholm (NordSIP) – In an effort coordinated by Ceres and the PRI, 230 institutional investors representing US$16.2 trillion in AUM called for urgent corporate action regarding the devastating fires in the Amazon fuelled by rapid deforestation in Brazil and Bolivia.
The statement calls on companies to establish a commodity-specific no-deforestation policy focusing on the supply chain, with transparent monitoring and verification of supplier compliance and annual reporting on risk exposure, management and progress.
Signatories include Nordic investors such as Storebrand Asset Management, AMF, the Council on Ethics of the Swedish National Pension Funds, AP1, AP2, AP3, AP4, DNB, Folksam, Handelsbanken Asset Management, Länsförsäkringar, Nordea Asset Management, Öhman Fonder, Swedbank Robur Fonder and Skandia, among others.
“For too long, the discussion on climate change has concentrated on the energy sector. There is an urgent need to focus more on effective management of agricultural supply chains,” said Jan Erik Saugestad, CEO Storebrand Asset Management. “Deforestation and loss of biodiversity are not only environmental problems. There are significant negative economic effects associated with these issues and they represent a risk that we as investors, cannot ignore. The adoption of Storebrand’s investment policy to curb deforestation, lays out a clear mandate to intensify our work on active ownership, and obliges us to apply maximum pressure to change company behaviour. Storebrand’s ambition is to have an investment portfolio that does not contribute to deforestation by 2025, and we will not knowingly finance operations that are illegal, fail to protect high conservation value forests or violate the rights of workers and local people.”
Many of the statement signatories participate in the Investor Initiative for Sustainable Forests (IISF), which aims to transform industry practices to eliminate deforestation from cattle and soy supply chains.
Beyond the Amazon fires, the investor statement also echoes concerns from a recent special report on climate change and land released. In it, the IPCC highlights evidence that poor forestry and land-use management, including commodity-driven deforestation, cause 11% of GHG emissions.
“In signing this statement, investors representing a significant portion of global capital are pledging their support for the Amazon region, which has been devastated by fires and deforestation,” said PRI CEO Fiona Reynolds. “In doing so, investors are recognising the critical role they play to urgently accelerate action to help societies affected by this tragedy, and to prevent environmental disasters of this scale in the future.”
“Institutional investors increasingly recognise that deforestation creates material financial risks, including reputational and regulatory risks for companies, and that it exacerbates systemic risk across portfolios by contributing to climate change,” said Ceres CEO and President Mindy Lubber. “Therefore, companies must demonstrate to investors that they can hold their global suppliers accountable for disclosing and eliminating these risks.”