Advocacy group Ceres and the UN-backed Principles for Responsible Investment (PRI) have announced at the COP22 in Marrakech a partnership which will set up a joint investor group to put pressure on food and timber companies, major contributors to deforestation and associated social impacts of forest destruction.
The initial geographical focus will be commodity-rich Latin America, where deforestation reduction is a major concern.
Beef production in Latin America alone, Ceres and PRI said in a statement, is responsible for the destruction of 2.7 millions tropical forest hectares as they are converted to pasture for cattle.
“Deforestation poses real financial risks to investors with agribusiness in their portfolios,” said Ceres’ Chief Operating Officer Dawn Martin.
In its joint statement announcing the investor group, Ceres and PRI said that land clearing for commodities production is often associated with enforced labor and land rights violations.
As such, they said, agribusiness that source from companies engaged in deforestation can transfer risk to investors’ portfolios.Fiona Reynolds, PRI managing director, called on investors to keep using their financial muscle to engage with stakeholders and combat deforestation.
Thomas DiNapoli, New York State Comptroller and trustee of the New York State Common Retirement Fund, said: “We want the many food companies that use palm oil to ensure that what they use is sustainably harvested and free from deforestation.”
On the agenda of the new group for the next two years:
· Map and develop a set of indicators for evaluating beef, soy and timber companies’ sourcing policies and their impact on deforestation
· Benchmark 50 to 60 companies in the beef, soy, and timber industries
· Based on benchmarking results, engage with low-scoring companies (including through shareholder resolutions) to press them to adopt sustainable sourcing policies.
· Engage in public policy advocacy at the national and international levels.