Forest destruction accounts for nearly the same amount of global greenhouse gas emissions as the entire global transportation sector and deforestation rates are yet again on the rise. In response, thirty-eight investors from across the globe have joined Green Century Capital Management to demand that companies reaffirm and extend zero deforestation commitments specific to Latin America.
Signatories of the Latin America Forest Protection Initiative — who represent more than a half trillion dollars ($617.5 billion) in assets under management (AUM) — are requesting that companies adopt a self-policing policy modeled on the region’s successful soy moratorium, which for years, helped reduce deforestation by two-thirds in the Brazilian Amazon. According to recent research however, deforestation rates have increased again as unsustainable deforestation practices have spread to other locations across the South American continent.
Investors aim to revert current deforestation trends and protect the Brazilian Amazon as well as other at-risk regions, such as Gran Chaco and the Cerrado, that have faced continued or increased rates of deforestation that are contributing to climate change.
Specifically, the coalition of investors is demanding that commodity traders such as Archer Daniels Midland and Bunge as well as more public-facing companies including McDonald’s and Wal-Mart drop suppliers utilizing unsustainable clear-cutting techniques that cause deforestation.
“Investors from the Netherlands to the U.S. are looking for companies that are proactively managing greenhouse gas emissions and the potential risks associated with deforestation, such as reputational damage and market access,” said Leslie Samuelrich, president of Green Century Capital Management. “This coalition signals investor support for a zero-deforestation program that can potentially protect investors globally.”
According to the Food and Agriculture Organization (FAO) of the United Nations, South America experienced the largest loss of forest area between 1990 and 2015. When one considers that ten percent of all CO2 emissions from human activity stem from deforestation and other land-use change, the Latin America Forest Protection Initiative and the companies it seeks to engage have the opportunity to address climate change, arguably the world’s most consequential environmental issue, at a leading source.
The Latin America Forest Protection Initiative can help move companies to adopt commodity sourcing policies that commit them to the principles of no deforestation, no exploitation of workers or communities, as well as traceability. If adopted, the policy may also help countries in South America find ways to meet reduction targets of greenhouse gas emissions pledged under the Paris Agreement, ensure sustainable economic growth and protect community rights and endangered species.