Global investors call for end to Brazilian deforestation

Investors managing more than $2.8trn (£2.1trn) in assets have today thrown their weight behind an initiative seeking to halt deforestation in Brazil’s Cerrado region.

Legal and General Investment Management (LGIM) are among the investors supporting the call for action, joining McDonalds, Tesco, Walmart and Unilever in their bid to end forest loss driven by commodity production in Cerrado.

The vast tropical savanna is thought to be one of the most threatened ecosystems on the planet, and has already seen half of its original forests and native vegetation cleared for agricultural expansion.

It is estimated that continued deforestation in the region could release approximately 13.7 billion tones of CO2 into the atmosphere, jeopardising Brazil’s international commitments for green house gas emissions.

“Investors are realising the importance of protecting ecosystems like Cerrado, as their beneficiaries face a world too hot to retire into,” said Jeremy Coller, founder of the FAIRR Initiative, which coordinated the investor support.

“Globally, deforestation puts almost a trillion dollars of listed equity turnover at risk, and that makes the rapid pace of native vegetation loss in Cerrado a material concern for investors.”

More than 70 large corporates have given the support to the ‘Cerrado Manifesto’, which was launched last year and calls for immediate action by soy and meat companies to prevent further forest loss.

The new investor statement is timed to coincide with the drafting of an agreement between producers, industry, consumer organisations and civil society to eradicate deforestation in Cerrado.

Dutch asset managers APG and Robeco, and US investor Green Century Capital Management, have joined LGIM in lending their support to the initiative.

“We expect the companies which we invest in to disclose both their exposure to forest risk commodities, as well as how these are managed,” LGIM head of sustainability and responsible investment strategy, Meryam Omi, said.

“Given the significant role deforestation plays in increasing greenhouse gas emissions, it is essential to increase the importance of this issue on board agendas.

“Ensuring responsible sourcing and land use for commodities such as soy and cattle is a key component of risk mitigation.”

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