While the latest Forest 500 assessment shows voluntary commitments are falling short, they remain an important tool to eliminate commodity-driven tropical deforestation. All of these institutions are exposed to deforestation risks, but even those that have made statements do not necessarily have public policies in place for the companies they finance. Despite high profile collective statements, including in response to the Amazon fires, the majority of the most influential financial institutions in the Forest 500 still do not publicly recognise deforestation risks within their investments or portfolios. While moves towards this in the EU are welcome, action in all major markets is needed to avoid leakage and drive sector wide transformation.įinancial institutions also have a responsibility to address their exposure to deforestation risks in their portfolios. Given this voluntary commitment failure, civil society, legislators, and even some leading companies have called for regulatory action to ‘level the playing field’ and force action by companies on deforestation risks.
Major companies, financial institutions and governments signed up to ambitious goals to end deforestation in commodity supply chains by 2020, but these commitments have failed to galvanise meaningful action. In fact, some companies have quietly dropped previous commitments.
Ending forest loss is essential to address these crises, yet the main driver of tropical deforestation is demand for agricultural commodities. As we start a new decade, we face a climate emergency and a crisis in nature, illustrated all too vividly by the 2019 fires in the Amazon.