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 37 financial institutions with more than (US) $8.5 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, 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: SBTN targets, Taskforce on Nature-related Financial Disclosures (TNFD) Framework, CDP Forests Guidance.

Tools related to NBS investment:

• NbS Pilot Investment Platform: focused on NbS, including regenerative and sustainable agriculture, forests, and land use.
• The Little Book of Investing in Nature: offers an essential overview of  innovative financial products to increase investment in nature-positive activities.

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

Momentum Shift Leading to Inevitability of Action 

• Kunming-Montreal Global Biodiversity Framework (GBF) includes goals and targets relevant to the finance sector, including disclosure on nature-related risks, impacts and dependencies, and alignment of financial flows.
• Glasgow Leaders’ Declaration on Forests and Land Use commitment to halt and reverse forest loss and land degradation by 2030 is endorsed by over 141 governments covering 90% of the world’s forests.
• GFANZ co-chairs and vice-chairs call to action on deforestation note that transition plans that lack objectives and clear targets to eliminate and reverse deforestation are incomplete.
• Deforestation-free procurement acts are emerging, such as US Forest Act, European Union Regulation on deforestation-free supply chains , and UK Environment Act 2021.

Guidance, Tools, and Frameworks are Emerging Accelerate Action

• Updated Race to Zero – Leadership Practices include recognition of the need for organizations to set net-zero commitments to halt deforestation and protect biodiversity.
• GFANZ Financial Institution Net-zero Transition Plan Guidance incorporates guidance on tackling  commodity-driven deforestation.
• SBTi FLAG Guidance stipulates a no-deforestation commitment with a target date no later than 2025.
• Science Based Targets Network (SBTN) is developing guidance for companies to set appropriate targets to reduce, eliminate, and reverse biodiversity loss in their operations and supply chains.
• Taskforce on Nature-related Financial Disclosures (TNFD) framework v0.4 for companies and financial institutions to assess, disclose and manage nature-related risk released in March with the final framework expected in September 2023.

• Nature Positive for Climate Action: London Climate Action Week 2023
• Finance for Biodiversity Foundation/Finance and Deforestation Advisory Group Webinar: in collaboration with Finance for Biodiversity
• Nature Positive for a Net Zero Future: London Climate Action Week 2022
• Nature Positive for a Net Zero Future: Climate Action Week New York 2022
• Financing Nature Podcast: Financing Nature’s COP27 Special Series
• FSDA at COP15: Ending Commodity-Driven Deforestation and Scaling up NBS

• Economist Impact: Nature can protect us – if we protect it. Five changes that will help the private sector invest in nature—now
• ESG Investor: Creativity and Collaboration Vital to Finance Nature
• UNEP: CBD COP15 ends with landmark biodiversity agreement
• Nature Action 100: At COP15, investors announce Nature Action 100 to tackle nature loss and biodiversity decline
• BNN Bloomberg: Asset Managers Forced to Confront Biodiversity Risk Most Had Ignore
• Responsible Investor: Carney calls on FIs to integrate nature and biodiversity in transition plans.
• IFRS: ISSB announces plans to advance work on natural ecosystems and just transition
• IPE: Why we need deforestation-free portfolios by 2025
• Responsible Investor: 100+ days since COP Deforestation Commitments – why every investor needs to act now
• Race to Zero: Leading financial institutions commit to actively tackle deforestation
• Investment Week: Asset management firms pledge to fight deforestation by 2025
• FT: COP26: Global leaders sign pledge to halt deforestation
• Race to Zero: COP27 Press Briefing

• Race to Zero: Assessing the Financial Impact of Land-Use Transition on the Food & Agricultural Sector
• Race to Zero: Why Net-Zero Needs Zero Deforestation Now
• Forest 500: 2023: A watershed year for action on deforestation
• Make My Money Matter: Cutting Deforestation from Our Pensions

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

Please click here for Frequently Asked Questions.