Global Canopy has published its 2023 Deforestation Action Tracker report assessing 713 financial institutions with high-profile climate commitments and their action to eliminate deforestation, conversion and associated human rights abuses. The assessments include all financial institutions that are members of initiatives that make up GFANZ (Glasgow Financial Alliance for Net Zero) or Race to Zero coalitions.
All in all, the report shows that deforestation policies are frequently non-existent (for 75% of all financial institutions assessed). Only 10% have a deforestation policy in place for all highest risk commodities, 15% have policies for at least one, but not all high-risk commodities.
As Niki Mardas, Executive Director of Global Canopy puts it: “The great majority of financial institutions with strong net-zero targets have an inexplicable blind spot on deforestation, conversion, and associated human rights abuses.”
At the least, 44% of the financial institutions assessed are involved in initiatives on deforestation or advocating for legislation. However, few of them have deforestation policies that require their clients/holdings to be compliant with their policy rather than only advising or encouraging them to do so.
Currently none of the financial institutions assessed are on-track to eliminate commodity-driven deforestation by 2025 in line with the expectations of the UN High Level Expert Group. The 2025 deadline was set at COP27 and states that financial institutions need to eliminate agricultural commodity-driven deforestation by 2025 as part of their climate commitments.
That means there is quite some work to be done within the next two years. Though with the tools and data available it is certainly doable for financial institutions to make progress on deforestation, conversion, and associated human rights abuses.
Following the recommendations of Global Canopy, financial institutions should join ambitious alliances, set strong policies, actively engage portfolio companies and report transparently.
Net-zero coalitions like GFANZ should require both transition planning and progress reporting on action on deforestation, conversion, and human rights – and include deforestation in their relevant guidance, tools, and data offerings.
The Deforestation Action tracker will continue to publicly assess progress linked to these recommendations in future years.
Read the full report.
You can further read more about the methodology behind the Deforestation Action Tracker (including details on how the financial institutions were assessed and a full list of those included in the baseline review)
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