Cattle ranchers have been responsible for clearing great swathes of virgin rainforest in Brazil in recent years. According to the World Resources Institute, over 40% of the global tropical primary forest loss in 2021 occurred in Brazil, a total of 1.5 million hectares. This was attributed to forest fires and agricultural expansion, with deforestation for pasture accounting for just over half of the country’s total tree cover loss area between 2001 and 2015.
Investors have a critical role to play in halting and reversing deforestation, especially through engagement with companies and capital allocation. We expect companies that source or produce soy, beef and leather, which are commonly linked to deforestation in the Amazon rainforest, to commit to deforestation-free and conversion-free production and sourcing by 2025. The commitment should cover all commodities, regions and suppliers, including indirect suppliers.
We also encourage a commitment to achieving full traceability of commodities to source, across all tiers of the supply chain, in order to demonstrate that the company’s value chain is deforestation- and conversion-free. There should be an explicit commitment to respect human rights.
Companies should focus on the implementation of the commitment by articulating a clear strategy for how their operations and supply chain will become deforestation and conversion-free. This includes setting clear expectations for suppliers and creating mechanisms to enforce them. Ongoing due diligence and monitoring of suppliers and operations will be critical for effective implementation.
Read the full article in our Q1 2023 Public Engagement Report.