Leading Global Investors Managing $6.4 Trillion Call on Companies to Eliminate Deforestation in South American Cattle Production
SAN FRANCISCO, September 14, 2018 /3BL Media/ - As carbon pollution from global cattle production and tropical deforestation continues its alarming rise, 44 investors with approximately US $6.4 trillion in assets under management today called on companies sourcing beef and related cattle products to mitigate and eliminate deforestation risks from their supply chains.
Citing wide-ranging risks from deforestation, one of the fastest-growing contributors to global greenhouse gas (GHG) emissions, investors issued a formal statement at PRI in Person in San Francisco aimed at the cattle sector and its associated supply chains. Beef production is the world’s leading driver of tropical deforestation, responsible for 65% of gross deforestation from 2001-2009. The biggest losses as a result of beef production are tropical forests in Brazil and other areas of South America.
The Investor Expectations Statement on Deforestation in Cattle Supply Chains notes that “Cattle production has been identified as a leading driver of tropical deforestation, primarily through the conversion of forest to pasture and through the cattle industry’s demand for soy-based feed products,” The 44 investors signing the statement, including Aberdeen Standard Investments and BNP Paribas Asset Management, highlight that “With a view toward protecting long-term value and mitigating risks, we will seek to engage relevant investee companies on deforestation risk within their supply chains, particularly those with direct or supply chain exposure to cattle and related products.”
“In order to curb carbon emissions and limit global warming to below 2 degrees Celsius, eliminating deforestation in cattle, soy and other key agriculture commodities must be a top priority,” said Julie Nash, director of Food and Capital Markets at Ceres, who helped organize the investor statement.
“There is growing awareness amongst institutional investors of the material risks that deforestation poses to investee companies, in particular the link between tropical deforestation and greenhouse gas emissions, as such many investors are increasingly looking to engage with companies to discuss this issue,” added Danielle Carreira, senior manager, environmental issues at Principles for Responsible Investment (PRI), which also helped in organizing the investor statement.
Every year the world clears an area of tropical forests the size of Maine (35,385 square miles). These ecosystems provide a critical habitat for millions of species in addition to local communities and store vast quantities of carbon, which is released into the atmosphere when they are razed. The biggest losses have been in Brazil’s Amazon rainforests, dubbed “the lungs of the earth” since they hold some 14 percent of the world’s terrestrial carbon.
The investor statement highlights wide-ranging financial risks that deforestation is creating for food and agribusiness companies and their investors. And it warns they will likely grow as global demand for cattle and soy continues to rise and countries take stronger action to stem forest losses.
The statement lays out what investors expect of companies regarding their disclosure and management of deforestation risks. It calls for companies to demonstrate a commitment to eliminating deforestation by taking the following steps, among others:
- Stronger awareness and governance regarding deforestation risks, including oversight at the board of directors level;
- A publicly-disclosed commodity-specific deforestation policy with quantifiable, time bound commitments covering the entire supply chain and sourcing geographies;
- Traceability across the entire cattle supply chain;
- Monitoring and verification processes to ensure that suppliers are complying with the company’s deforestation policy.
For more details on the investor expectations statement, click here.
Ceres is a sustainability nonprofit organization leading the most influential investors and companies to build leadership and drive solutions throughout the economy. For more information, visit www.ceres.org or follow on Twitter @CeresNews.