Member AUM
$70 trillion

Investors join global food companies to halt deforestation in Brazil’s Cerrado savannah

31 July 2018
Key Topic(s)
Greenhouse Gases
  • Investors join 70 global companies to call for zero deforestation in Brazil’s sensitive Cerrado region

  • New investor statement launched today with signatories including giant Dutch asset managers APG and Robeco, Legal and General Investment Management (UK) and Green Century Capital management (US).

  • “Investors are realising the importance of protecting ecosystems like Cerrado, as their beneficiaries face a world too hot to retire into” says Jeremy Coller, Founder of FAIRR network, which is building investor support to protect the Cerrado.

(London, 30 July 2018). Investors managing over $2.8 trillion in assets have put their weight behind work to halt forest loss driven by agricultural commodity production in Brazil’s Cerrado region. Cerrado is an area of tropical forests alongside the Amazon described as one of the most threatened ecosystems on the planet.

Approximately 50% of the Cerrado’s forests and native vegetation has already been cleared for agricultural expansion and last year the ‘Cerrado Manifesto‘​​ called for immediate action by soy and meat companies to prevent further loss. Since then over 70 large corporate buyers including McDonalds, Tesco, Walmart and Unilever have signed a Statement of Support.

The FAIRR Initiative is coordinating institutional investor support for the Cerrado Manifesto to send a clear market signal that investors want to halt deforestation in the Cerrado. The new statement is timed to coincide with the drafting of an agreement between producers, industry, consumer organizations and civil society on an action plan for eradicating deforestation in Brazil’s Cerrado biome. The drafting process will commence in August.  Current investor signatories including giant Dutch asset managers APG and Robeco, Legal and General Investment Management (UK) and Green Century Capital Management (US).

Jeremy Coller, Founder of the $8 trillion FAIRR Initiative and CIO of Coller Capital said,

“Investors are adding their weight to a coalition of support that includes retailers, manufacturers, livestock producers and feed companies; as-well as civil society.  The investment community is sending a clear market signal to cattle and soy firms to demand a zero-deforestation policy in Cerrado. Globally, deforestation puts almost a trillion dollars of listed equity turnover at risk and that makes the rapid pace of native vegetation loss in Cerrado a material concern for investors.

Institutional investors are realising the importance of protecting ecosystems like Cerrado, as beneficiaries face a world too hot to retire into. Already, over 38 million hectares of alternative available land have been identified in the region where soy production can sustainably expand without causing any further loss of forest assets.”

The investor statement of support is available at:

Meryam Omi, Head of Sustainability and Responsible Investment Strategy at Legal & General Investment Management, said:

“As part of our Climate Impact Pledge, LGIM engages with some of the world’s largest food retailers and producers on deforestation. Given the significant role deforestation plays in increasing greenhouse gas emissions, it is essential to increase the importance of this issue on Board agendas. We expect the companies which we invest in to disclose both their exposure to forest risk commodities, as well as how these are managed. Ensuring responsible sourcing and land use for commodities such as soy and cattle is a key component of risk mitigation.”

Daniel Salter, Group Responsible Sourcing Manager, Tesco said

“Soy production can be compatible with forest protection. Industry, civil society and governments must work together to ensure that soy expansion occurs only on existing agricultural land. Offering incentives as well as effective policies that redirect soy expansion to existing agricultural land can ensure zero deforestation soy production.”

Marks & Spencer was one of the original signatories to the corporate Statement of Support in October 2017. Mike Barry, Director Plan A, Marks & Spencer, added:

“Soy is an incredibly important part of the global food system, for producers, manufacturers and retailers alike. M&S has taken many steps to make our own soy supply chains more sustainable including helping soy smallholders in Paraguay and leading the CGF Soy Working Group. However, we recognise that on an issue this big and complex only collaborative action to protect the Cerrado within a framework of good development planning and governance working alongside policy makers, producers, traders & civil society will deliver sustainable development pathways that support resilient soy & cattle production in the region.

FAIRR is particularly concerned about the deforestation risks inherent in the global protein supply chain.  In July 2018, it launched the Coller FAIRR Protein Producer Index, an assessment of how 60 global livestock and aquaculture companies disclose and manage key ESG risks, including deforestation and biodiversity loss. FAIRR’s assessment found that despite soy and cattle being the most significant drivers of deforestation, 84% of the companies in its Index – suppliers to some of the biggest food brands in the world – do not have targets or policies to address deforestation risk.”

Peter van der Werf, Senior Engagement Specialist, Robeco said:

“The economic and environmental costs of deforestation are quickly being understood by the investment community. Deforestation poses material risks that threaten to disrupt the supply chains of companies in the agriculture sector. To protect long-term value and to avoid the loss of ecosystems rich in biodiversity such as the Cerrado, Robeco continues to engage with companies in our investment portfolio on deforestation. We call upon other institutional investors to follow that example and ensure they are engaging with portfolio companies on the sustainability of their supply chains.”

Lucian Peppelenbos, Senior Responsible Investment & Governance Specialist, APG Asset Management said:

“Companies that directly or indirectly cause deforestation, especially in sensitive conservation areas such as the Cerrado face physical, regulatory and reputation risk – and that translates into the potential for tangible capital loss for investors. The investor statement on Cerrado is a powerful statement to the wider market that institutional investors like APG favour agricultural production on existing arable land over supply chains that threaten international climate goals and global biodiversity.”

Notes to editors

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The $8 trillion FAIRR (Farm Animal Investment Risk & Return) investor network is a Coller Initiative. It is a collaborative forum for investors that aims to raise awareness of the material impacts factory farming and poor animal welfare can have on investment portfolios, and works to help investors share knowledge and form collaborative engagements on these issues.