Why deforestation and NBS?

Tackling deforestation Investing in NBS

Deforestation sits at the intersection of climate and nature: net-zero targets will be out of reach unless deforestation is urgently halted and reversed.

By committing to work to eliminate agricultural commodity-driven deforestation from portfolios and drive the sustainable transition of the agricultural sector, financial institutions can simultaneously enable the delivery of climate targets, support biodiversity and food security, mitigate against risk, and prepare for forthcoming regulations.

Launched at COP26, the Finance Sector Deforestation Action (FSDA) is a results-driven collaborative of financial institutions that unites signatory organisations around an engagement approach to addressing nature-related risks and opportunities by tackling deforestation, and creating essential convergence across other climate and nature-related initiatives.

38 financial institutions with more than (US) $8.9 trillion in assets under management are committed to eliminating agricultural commodity-driven deforestation risks (from cattle, soy, palm oil, pulp, and paper) in their investment and lending portfolios by 2025. To read the commitment letter, please click here.

Finance and Deforestation Advisory Group: FSDA members have the support of the Finance and Deforestation Advisory Group, which is focused on helping signatories to meet their Commitment. The Group provides ongoing advice and support on data, tools, and best practices. This group includes Conservation International, Global Canopy, Global Optimism, High-Level Champions for Climate Action Team, Nature4Climate Coalition, and WEF Tropical Forest Alliance.

Join the Finance Sector Deforestation Action Initiative

Financial institutions can access and sign on to the Financial Sector Commitment on Eliminating Agricultural Commodity-Driven Deforestation by accessing this aforementioned form. For any queries, please email deforestationfree@climatechampions.team.

View FAQs here.

Address deforestation risk: 

  • Investor Expectations: FSDA members have developed investor expectations to support company engagements. These expectations are grounded in the Commitment, informed by relevant science and best practices, and anticipated to evolve over time. Click here for details.
  • Finance Sector Roadmap: AFI-aligned and endorsed Finance Sector Roadmap provides stepwise guidance and actions for financial institutions to tackle deforestation in their portfolios and meet the Commitment. It brings together the best available data and tools, showing financial institutions how they can map risk, set policies, identify and engage with non-compliant portfolio constituents, and look to increase exposure to nature-positive activities.
  • Examples of tools that can be used by clients and holdings to combat agricultural commodity deforestation: are SBTi-FLAG, SBTN, TNFD, CDP, etc.

Platform examples related to NbS investment

Progress so far:

  • Company Engagements: FSDA signatories have been using the investor expectations they developed and published to step up engagement with companies on increasing actions that address their deforestation impact.
  • Data Providers: FSDA signatories are engaging with major data providers to call for issuer-level data on deforestation risk exposure and management.
  • Policies: FSDA signatories have made progress in enhancing or establishing deforestation policies.
  • Investment in NbS: FSDA signatories are implementing strategies and increasing investments in nature-based solutions.
  • Case studies to be shared soon.


Momentum Shift Leading to Inevitability of Action 

Guidance, Tools, and Frameworks are Emerging Accelerate Action

(US) $8.9 trillion Assets under Management

The signatory financial institutions commit to use best efforts to tackle commodity-driven deforestation impacts in their investment and lending portfolios by 2025. The commitment is focused on addressing agricultural commodities that are responsible for the lion’s share of deforestation impacts:  beef, soy, palm oil, pulp & paper. Their stated intention is to reduce deforestation-related risks while supporting the transition to a sustainable agricultural sector.

The signatory organisations will individually create organisational plans, milestones, and incentives to meet the proposed timelines, aligned with a Paris Agreement-compliant 1.5°C pathway.

FSDA Signatories

ACTIAM; AP2; Australian Ethical Investment; Aviva plc; AXA Group; Banco Estado de Chile; Boston Common Asset Management; Capital + SAFI S.A.; Church Commissioners for England; Church of England Pensions Board; Comgest; CPEG; Domini Impact Investments LLC; East Capital Group; Fidelity International; GAM Investments; Generation IM; Grupo Bancolombia; Impax Asset Management PLC; International Business of Federated Hermes; JGP Asset Management; Local Authorities Pension Fund (LAPF); Legal and General Investment Management (LGIM); LGPS Central Limited; Lombard Odier; London CIV; Menhaden PLC; NEI Investments; NN Investment Partners; Robeco; Schroders; SCOR SE; Skandia; SouthBridge Group; Sparebank 1 Forsikring; Storebrand Asset Management; Sumitomo Mitsui Trust Asset Management; TCI Fund Management Ltd.

Interested in learning more about the Financial Sector Commitment Letter on Eliminating Agricultural Commodity-Driven Deforestation?

Please click here for Frequently Asked Questions.