Investors Representing $600 Billion Urge Solutions for Latin America’s Deforestation
Green Century Funds, an asset management firm geared toward investors interested in environmentally and social responsible investing, is asking some of the world's largest food companies to ramp up efforts to curb deforestation in South America. The Boston-based company says it has organized 38 U.S. investors, together representing at least $617.5 in assets under management, to urge companies to take on voluntary measures that reduce the impact commodities such as palm oil, beef and soy have on South America’s environment. The investors sent letters to almost two dozen companies, including the multinational suppliers Cargill and Bunge; fast-food giants like McDonald’s and Wendy’s; consumer packaged goods (CPG) firms Colgate-Palmolive and Unilever; and retailers Walmart and Kroger. The signatories of what is being called the Latin American Forest Protection initiative are asking these companies to implement supply chain policies that respect human rights while committing to a zero-deforestation agenda. The outcomes, insist Green Century and its partners, are a reduction in greenhouse gas emissions, improved supply chain transparency traceability and a path toward more sustainable development. Green Century’s announcement comes a decade after measures such as the soy moratorium, which was widely credited with halting deforestation in Brazil’s Amazon region, appeared to have slowed deforestation in South America. But over the past few years, environmental destruction appears to be on an upswing in the region. Recent investigations by publications including the New York Times indicate that deforestation is accelerating in regions such as the Amazon, Brazil’s cerrado and Paraguay’s Atlantic forests. Bolivia is one South American nation where deforestation has come at a high cost to both the environment and human rights. Last year the French graduate school Insead concluded that the country of 10.7 million people, despite per-capita GDP well under $3,000, has witnessed a spike in greenhouse gas emissions largely attributed to deforestation. The common practice of burning forests to make way for farms has increased Bolivia’s per-capita carbon footprint and it is now higher than several European countries. And while the Amazon is largely the focus of Brazil’s environmental record, the grasslands of the country’s cerrado have been altered to the point where it is disrupting the the region's water cycle – placing the country’s hydropower sector and freshwater supplies at risk. The Times’ investigation, which verified claims made by the NGO Mighty Earth that deforestation has rapidly increased across Brazil and Bolivia, points to the agricultural suppliers Cargill and Bunge as driving much of South America’s forest loss. Despite their promises during a 2014 United Nations climate summit to eliminate deforestation attributed to palm oil, soy and beef, critics say the companies are not doing enough to stop sourcing soy from lands recently cleared to make way for new plantations. Environmentalists say Cargill falls short when it comes to the monitoring of soy growers’ destructive land management practices in Brazil and other countries. Meanwhile, investors urged Bunge to make more concrete commitments to eliminate deforestation from its supply chain. Both companies said the Times "inflated" their ties to deforestation in South America. According to the United Nation’s Food and Agriculture Program (FAO), South America rivals Africa as the continent that has suffered the most from deforestation between 2010 and 2015. Rapid economic development, as well as food resilience programs launched by leaders such as Bolivia’s Evo Morales, have contributed to these trends. According to Green Century, the adoption of transparent zero-deforestation policies by the world’s largest food companies are key to solving these problems – while shielding their investors from long-term risks. Image credit: Sam Beebe Published earlier today on Triple Pundit.