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Photo shows speakers at Finance Sector Roadmap launch


Addressing commodity-driven deforestation - a new roadmap for the finance sector

COP26 saw new commitments from financial institutions on deforestation - and the launch of a new Finance Sector Roadmap to help them deliver.

Deforestation shot to the top of the agenda at the UN climate talks in Glasgow last week, with a host of high profile pledges from governments, companies and financial institutions on tackling deforestation. The conference has focused attention on the need for momentum for corporate action on deforestation - but it also made clear the scale of the task at hand.

The  World Leaders Summit saw over 30 financial institutions, with over US$ 8.7 trillion in assets under management, commit to tackle agricultural commodity-driven deforestation.

Including major financial players such as Aviva, Axa and Legal and General, the investors’ pledged to create organisational plans, milestones, and incentives to meet the timelines, recognising the 1.5 degree target set by the Paris Agreement.

To support financial institutions on this journey, Global Canopy has been working with the Finance & Deforestation Advisory Group to launch a Finance Sector Roadmap on eliminating commodity-driven deforestation.


Delivering finance sector commitments on deforestation

How can the finance sector deliver on commitments on commodity-driven deforestation

Speaking at the launch event for the Roadmap at COP26, Minister of State for the Pacific and the Environment Lord Zac Goldsmith welcomed the commitments from the private sector, which he said were critical in sending the market a signal of a clear direction of travel. 

“This is not the end, this is the beginning... Our job is to grow and grow and grow those commitments that we saw, but even more importantly, is to inject true accountability, to make sure that everything that was pledged, everything that was promised is properly and fully delivered.”


Eliminating Commodity-Driven Deforestation: Finance Sector Roadmap

Watch the launch of the Finance Sector Roadmap at COP26

Without delivery, of course, pledges made at COP26 are meaningless - and there are already concerns that high profile announcements made in Glasgow are not reflected in countries’ national policies and action plans. The Roadmap is designed to support that delivery, and has been developed in consultation with financial institutions and civil society organisations to set out best practice with a target of eliminating commodity-driven deforestation by 2025.

A modular approach to addressing deforestation

The Finance Sector Roadmap takes a modular approach

If the finance sector is to play its part in achieving the 1.5 degree target set out in the Paris Agreement, more sign-ups are needed. Just four of the signatories to the commitment letter appear in Global Canopy’s list of the 150 financial institutions providing the most finance to the most exposed companies in forest-risk supply chains. 

Commitments to act on deforestation appear to be lagging way behind high profile commitments on Net Zero - yet financial institutions cannot achieve net zero if they do not address deforestation within their portfolios.

In fact just over one third of the 150 financial institutions assessed in the most recent Forest 500 ranking have published a clear policy on addressing deforestation risks in their portfolios - with a combined investment of over US$2.7 trillion in companies exposed to deforestation.

Speaking at the launch, Jose Maria Pugas from JGP Asset Management in Brazil - one of the signatories to the commitment - urged other banks and investors to sign up.

“It is an honour to be the first Brazilian to sign but also a sadness because we are the only one to sign. So my appeal is to every asset management firm, every financial institution to commit to deforestation-free finance “

“We have to see deforestation as a moral risk, as an existential risk,” he said. “It’s not just a checkbox, it’s much more of a moral commitment.”


Find out more about the Finance Sector Roadmap on Eliminating Commodity-Driven Deforestation at 

Contact [email protected] to find out more.

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