Many of the world’s greatest monetary establishments that handle trillions of {dollars} in belongings are “fuelling” deforestation in the Amazon by failing to set clear insurance policies to cease the injury, a forest conservation group claims in a brand new report.

Major institutional traders that lack zero-deforestation insurance policies embrace Aberdeen Standard Investments, Legal and General Investment Management, Amundi Asset Management and Candriam Investors Group, UK-based nonprofit Global Canopy mentioned in a report revealed on Thursday.

“The financial sector is fuelling deforestation in Brazil through their investments in companies in beef and soy supply chains,” Global Canopy Executive Director Niki Mardas mentioned in an announcement.

After Amazon wildfires made international headlines in September 2019, 251 traders – collectively managing practically $18 trillion in belongings – signed an announcement urging corporations to do their half in halting the destruction of the world’s largest tropical rainforest.

A yr later, nevertheless, solely a handful of the monetary establishments that referred to as on companies to act have launched their very own insurance policies in opposition to deforestation, Global Canopy’s report discovered.

Meanwhile, the Amazon rainforest in Brazil is experiencing its worst rash of fires in 10 years, although preliminary authorities information confirmed deforestation dropped by 5 % in the first eight months of 2020.

“Investors should assess the companies in their portfolio for exposure to deforestation risks, and they should develop and publish a clear policy setting out their approach to [this],” Mardas instructed the Thomson Reuters Foundation by e mail.

“The critical thing is that investors engage with companies to address the issue. Investors should consider disinvestment in cases where engagement has failed,” he added.

Just 21 of the traders who signed the 2019 assertion have their very own zero-deforestation insurance policies for all the forest-risk commodities of their portfolios, Global Canopy mentioned.

They embrace BNP Paribas, DNB Asset Management, HSBC and Storebrand Group.

Storebrand, which has an asset administration arm, states on its web site it “does not wish to finance negative environmental and social impacts in this potentially high-risk sector”, including it will finish relationships with corporations that don’t meet its requirements.

An extra 12 funding corporations, together with Aviva Investors, have insurance policies for timber, palm oil or each however not for soy and cattle, regardless of these being the important drivers of deforestation in Brazil, in accordance to the Global Canopy evaluation.

Many of the world’s greatest monetary establishments that handle trillions of {dollars} in belongings are “fuelling” deforestation in the Amazon by failing to set clear insurance policies to cease the injury, a forest conservation group claims in a brand new report.A person cuts down a tree with a chainsaw in a forest close to the municipality of Itaituba, Brazil [File: Nacho Doce/Reuters]

A spokeswoman for Aviva Investors, the fund administration arm of insurer Aviva, mentioned it had stepped up engagement round cattle-related deforestation in Brazil.

Aviva had pushed cattle exporter Minerva Foods for extra traceability in its oblique provide chain and joined an investor initiative lobbying Brazil’s authorities on the concern, the spokeswoman added.

Among these named in the report as missing insurance policies, international asset supervisor Candriam instructed the Thomson Reuters Foundation it was working with the identical investor initiative, including that deforestation and biodiversity loss had been amongst “the many issues” it seems at when reviewing corporations’ insurance policies.

Major UK investor Aberdeen Standard mentioned it hoped to “drive change and add pressure for stricter policy action” on forest-related commodities by its engagement with corporations.

Legal and General Investment Management mentioned it had to this point excluded 4 meals corporations from sure sustainable funding funds due to a selected lack of motion on deforestation.

Amundi didn’t reply to Reuters’s request for remark.

On Friday, 39 banks and corporations joined think-tanks and the governments of France, the United Kingdom, Switzerland and Peru to work on establishing a “Task Force on Nature-related Financial Disclosures”, which goals to handle market failures contributing to the destruction of nature, equivalent to forests.