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 use best efforts 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 new and forthcoming regulations.

Launched at COP26, Finance Sector Deforestation Action (FSDA) brings together 36 financial institutions with more than (US) $8 trillion in assets under management who are working toward 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 signed by these financial institutions, 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, Climate Champions TeamMake My Money Matter, 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: SBTN targets, Taskforce on Nature-related Financial Disclosures (TNFD) Framework, CDP Forests Guidance.

Tools related to NBS investment:

Progress so far:

  • COP27 Briefing: See more detail available here on how signatories have been moving forward with implementation as the Finance Sector Deforestation Action (FSDA) initiative.
  • Policies: FSDA signatories have made progress in enhancing or establishing deforestation policies.
  • 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.
  • Investment in NbS: FSDA signatories are implementing strategies and increasing investments in nature-based solutions.

Case Studies:

  • Storebrand: Creating deforestation-free investment portfolios
  • Schroders: Steering finance towards a net zero, nature-positive future
  • Aviva: Biodiversity efforts continue with £38m pledge to restore lost UK rainforests
  • JGP: Eliminating commodity-driven deforestation through active ownership, creative financing, and nature restoration

 

Momentum Shift Leading to Inevitability of Action 

Guidance, Tools, and Frameworks are Emerging Accelerate Action

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

Please click here for Frequently Asked Questions.

ADVISORY GROUP