The world’s largest responsible investor group is campaigning to end the manmade fires raging through the Amazon, as latest assessment reveals increased deforestation since the 2014 New York Declaration on Forests.
As Fiona Reynolds, CEO of the Principles for Responsible Investment (PRI) — an organization furthering sustainable finance with more than 2,200 investor signatories representing $90 trillion — told Dow Jones Newswires on Wednesday, PRI will release a statement on Sept. 16, addressed to companies doing business in the Amazon.
“It will be a large number of investors who are really calling on companies that operate in the Amazon to do a better job,” Reynolds said. “They are still getting people to sign on, but I know there is already a large group. Once it’s signed, we hope that others will sign on.”
Following the statement, Reynolds said it is likely that a group of investors with the PRI will meet with companies to hash out solutions to end the fires, “whether that’s a big, collaborative engagement — which I suspect it might — or engaging with very specific, individual companies,” Reynolds said.
At the PRI’s annual conference in Paris this week, which has attracted more than 1,800 people, concerns about the Amazon fires have been discussed by many institutional investors, including asset managers and asset owners including pension funds and insurance companies.
Fires in Brazil this year have reached their highest levels since 2010, with more than 43,400 fires between January and August — double the amount of fires over the same period last year.
The burning of the Amazon generated an estimated 46 percent of Brazil’s greenhouse gas emissions in 2017, according to Sistema de Estimativa de Emissoes de Gases de Efeito Estufa, a Brazilian group that tracks GHG emissions.
Some companies have already taken action against the fires, which are often set to clear land for cattle, crops and mining. In late August, clothing giant VF Corp. said it would no longer source leather from Brazil, after deciding it couldn’t guarantee that all its suppliers operated sustainably. Since then, H&M has followed suit; and this week, PVH Corp. — owner of Calvin Klein and Tommy Hilfiger — said it also was “reviewing its Brazilian supply base to determine whether it is contributing to deforestation.”
Global food and beverage companies are also carefully assessing ingredients sourced from Brazil: Nestle SA is now reviewing its meat and cocoa purchases from Brazil to ensure they weren’t fueling the fires; and Coca-Cola Co., which makes the main ingredient for its drinks in the Amazonas state of Brazil, has said it was speaking with companies and local governments to prevent future fires.
People “don’t want products that mean that the Amazon has been ravaged to be able to get them,” Reynolds said.
PRI’s announcement comes on the heels of a disconcerting update from the New York Declaration on Forests (NYDF) in the lead-up to next week’s 2019 United Nations Climate Summit, which reveals that five years after a landmark pledge to cut the rate of natural forest loss by half and restore 150 million hectares of land by 2020, the global state of forests has dramatically worsened.
Despite the surge of engagement and sweeping commitments around the NYDF at the 2014 UN Climate Summit, progress toward meeting them has been slow from the start. This latest assessment shows that since hundreds of governments and companies signed the NYDF, the annual rate of tree cover loss has increased 43 percent, reaching over 26 million hectares per year — an area the size of the United Kingdom. Tropical forests — currently up in smoke in the Amazon and the Congo Basin — have taken the biggest hit, accounting for over 90 percent of global deforestation between 2001 and 2015.
Particularly concerning is the loss of pristine and irreplaceable primary tropical forests, which are home to valuable carbon sinks and the greatest biodiversity on the planet. The report puts the rate of loss of tropical primary forests at up by over 40 percent, equal to 4.3 million hectares per year.
“Since the NYDF was launched five years ago, deforestation has not only continued — it has actually accelerated,” said Charlotte Streck, co-founder and director of Climate Focus, a think tank that led a coalition of 25 organizations — the NYDF Assessment Partners — in authoring the report, Protecting and Restoring Forests: A Story of Large Commitments Yet Limited Progress.
“We must redouble efforts to stop forest loss, especially in primary tropical forests; and restore as many forests as possible before the irreversible impacts of losing trees further threatens our climate and food security.” — Charlotte Streck, Climate Focus
The report analyzes the latest research on forest protection and restoration efforts; and presents new data on the scale, location and status of forest landscape restoration projects already underway worldwide.
Though some endorsers of the NYDF — including El Salvador, Ethiopia and Mexico — have made strides in planting trees, less than 20 percent of the pledge’s overall restoration goals have been met, the report finds. And though a surge of new trees has cropped up on farms and pastures — providing income, food and protection from extreme weather — efforts to regrow natural forest areas, which offer far more carbon as well as biodiversity benefits, have only seen slow progress.
“The report makes very clear that restoring natural forests can’t compensate for the loss of primary forests,” Streck said. “It can take decades to centuries for forests to recover their full carbon-absorbing and weather-regulating capabilities. We must restore forests in addition to protecting them. Progress in both is necessary — and, in fact, complementary.”
Forest loss rages on
According to the report, the countries with the highest forest loss in the last five years include four Amazon Basin countries: Brazil, Bolivia, Colombia and Peru. In June 2019 alone, deforestation rates in the Brazilian Amazon increased 88 percent compared to the same month last year. There are also troubling new hotspots of increasing forest loss in West Africa and the Congo Basin — the Democratic Republic of Congo has more than doubled its deforestation in the last five years. In Asia, most forest is lost in Indonesia, Malaysia and Cambodia.
However, the report does show positive trends in the region, with Indonesia the one bright spot on the deforestation map: Political action combined with favorable weather over the last two years helped stop the widespread burning of peatlands and scale back forest destruction. While annual fires continue to threaten public health and the climate, President Joko Widodo’s permanent ban on the development of peatlands and primary forests is a good step forward.
Since the NYDF was endorsed, the largest driver of deforestation has been forest clearance for agriculture, including the industrial scale production of commodities including beef, soy and palm oil. The inability of companies engaged in forest-risk commodities to meet commitments to eliminate deforestation from their supply chains contributes to the forest crisis. Also part of the problem is limited improvements in forest governance, including strengthening forest protection laws, enforcement in producer countries and adoption of demand-side regulation from consumer countries — largely exacerbated by a major gap in funding for forests. With income needed from commodities production, most countries still find more value in clearing forests than keeping them standing.
“There has been a failure to transform the underlying economic incentives that favor forest destruction over forest protection,” added Ingrid Schulte, coordinator of the assessment and one of the report authors. “Halting forest loss will take a serious systemic shift in behavior — from everyone — by reducing demand for commodities that carry embedded deforestation, reducing meat consumption, and investing in governance and protecting the rights of Indigenous Peoples.”
The Indigenous leaders who endorsed the NYDF argue that forest protection isn’t possible without strengthening their land rights, a claim backed by the latest IPCC report released last month.
“The report makes clear that Indigenous Peoples and local communities are critical allies in the fight against deforestation and climate change. The scientists concluded that when our land rights are secure and enforced, our territories have consistently low rates of deforestation — often lower than in neighboring protected areas,” said Gregorio Mirabal, general coordinator of COICA (Coordination of Indigenous Organizations of the Amazon Basin).
“We signed the NYDF and have kept our forests standing. Now, governments and companies need to keep their end of the bargain.” — Gregorio Mirabal, COICA
Restoration slow to ramp up
Under the NYDF and the 2011 Bonn Challenge, countries pledged to restore a total of 150 million hectares of land by 2020 and restore at least an additional 200 million hectares by 2030, an approach increasingly viewed by scientists and policymakers as a proven, cost-effective and immediately available climate solution. But the report found that only a sliver of this restoration has taken place — 27 million hectares of forests over the last two decades. That’s roughly equivalent to the area of forest lost every year, and it represents 18 percent of the area countries that committed to restore by the end of next year.
“Not all forest restoration is created equal,” Streck said. “While some approaches, such as planting fruit trees on farmsteads, provide a buffer to the food system and help farmers boost resilience against climate impacts, there is really only one type of restoration that presents the best strategy at our disposal for solving the climate crisis: when it is combined with protection, the restoration of natural forests is most critical to helping us meet global climate goals.”
Forest protection and restoration, as well as other natural climate solutions, will be one of the issue areas featured at the UN Climate Summit on September 23. According to the report authors, the report underlines the importance of ensuring forest protection and restoration are key climate solutions profiled at the gathering.
“Many companies have cleaned up their individual supply chains, but this has not translated to reducing forest loss globally. As we head into the 2020s, it is imperative for us all to move from incremental to more transformational steps across sectors and landscapes,” said Justin Adams, Executive Director of the World Economic Forum’s Tropical Forest Alliance. “Only intensified partnerships and accelerated collective action can pull our forests back from the brink. Hopefully, this report will inspire and galvanize governments, business and civil society to redouble their efforts.”