Deforestation-free Financial Markets
Today, it is hard to invest your savings or pensions without contributing to deforestation. Global finance has not taken sufficient account of the environmental damage and financial risks associated with deforestation, except from a few front-runners. Even committed financiers have lacked access to credible and standardized data to be able to address deforestation risk.
Financial institutions play a key role as shareholders and financiers of companies in value chains with forest-risks. These institutions are positioned to influence companies to adopt more responsible practices and policies.
Overall, forest destruction has not been understood as a significant financial risk. But in a low carbon future there is no room for deforestation related emissions. A license to clear intact rainforests should be considered a ‘stranded asset’, or non-profitable like a new coal plant, in an environment policy.
Our strategy for working with deforestation-free financial markets
- Support access to – and standardization of – data useable for investors
- Create awareness of deforestation as a material financial risk at company systemic level.
- Promote voluntary forest risk disclosures through CDP.
- Support the Task Force of Climate Related Financial Disclosures (TCFD) in developing guidance and practice for companies to report on deforestation risk throughout their supply chain.
- Build capacity of local banks in key forest countries.