Catholic investor alliance to target Brazilian government on illegal gold mining

Investor Policy Dialogue on Deforestation is also engaging on the topic, says it is in Brazil’s national interest to enforce legislation.

The Catholic investor alliance engaging the Brazilian government on its protection of the Amazon has announced it will also target the country’s central bank and the leading presidential candidate over illegal gold mining.

The group, which includes investors from Germany and the US, as well as dozens of non-financial Catholic institutions, has spoken with industry experts and NGOs, and held in-person meetings with a leader from the Munduruku people to understand the impacts of illegal gold mining on the Amazon region and indigenous groups living there.

Tommy Piemonte, head of sustainable investment research at Bank für Kirche und Caritas (BKC), which is leading the engagement, said the alliance was in contact with the Brazilian central bank and had asked it to comment on the problem of traceability of gold, as well as to consider potential solutions.

The group is also looking to engage with Luiz Inácio Lula da Silva, who is currently leading in the polls ahead of the presidential election in October, and has pledged to crack down on illegal mining on indigenous lands if he wins.

Graham Stock, senior sovereign strategist at BlueBay Asset Management, told Responsible Investor that the Investor Policy Dialogue on Deforestation (IPDD) – of which he is co-chair – was engaging the Brazilian government on all causes of deforestation. The IPDD is an $8.8 trillion investor alliance engaging multiple sovereigns including Brazil and Indonesia on deforestation.

“We have been very clear in our discussions that it is in Brazil’s national interest to ensure that existing legislation is enforced,” said Stock. “This applies to the Forest Code more broadly and to rooting out illegal activity in mining, agriculture and logging.” The IPDD is supportive of any effort to encourage Brazil to tackle the issue, he added.

While it may lack the financial weight of the IPDD, Piemonte said that Brazil’s large Catholic population gave the alliance led by BKC “a connection point that probably gives you power that you have lost as a normal institutional investor”.

“We think as a Catholic investor alliance we have a chance, not to fulfil every one of our requirements – this is clear – but some of them,” he added. “On the other side they are also Catholics, in the government, on the economy side and so on.”

The alliance has previously been in dialogue with FUNAI, the Brazilian agency in charge of indigenous affairs, as well as a Brazilian diplomat in the US, the German and Norwegian ambassadors to Brazil, and the country’s foreign minister.

Piemonte said it was also important to raise awareness of the issue among voters, whom he described as the most important stakeholder for governments. Ensuring that public attention in the country, as well as that of the media and international community, is on the issue is a key factor in BKC’s engagement.

Previous attempts, Piemonte noted, had mainly focused on the climate case, while it was also important to emphasise the economic issues of deforestation.