Firms with $8.7trn in assets under management have committed to "make best efforts" to eliminate agricultural commodity-driven deforestation from their portfolios by 2025.
The firms who have signed up will strive towards eliminating agricultural commodity-driven deforestation from cattle products, palm oil, soy, and pulp and paper production from portfolios by 2025.
They will also use active ownership and ongoing stewardship to "catalyse actions to eliminate deforestation across supply chains".
This will include publicly disclosing risks, establishing policies to address agricultural commodity-driven deforestation, deepening engagements, publicly reporting progress on efforts to tackle forest-risk agricultural commodity-driven deforestation, and increasing investment in nature-based solutions.
The group includes Aviva, Storebrand Asset Management, Generation Investment Management, JGP Asset Management, NEI Investments, Impax Asset Management, Church Commissioners for England and Boston Common Asset Management.
Fiona Reynolds, CEO, Principles for Responsible Investment, commented the "new joined-up approach builds on a considerable foundation of investor engagement with companies, regulators and policy-makers to address deforestation impacts".
This commitment is a response from the finance sector to the COP26 Call for Climate Action Announcements from Private Finance Institutions.
Nigel Topping and Gonzalo Muñóz, high level champions for Climate Action at COP26, said: "The time to ratchet up our collective global ambition to deliver on the Paris Agreement is now. Halting agriculture-driven deforestation to halve emissions and reverse biodiversity loss by 2030 is not an option but a necessity for companies credibly committed to net zero in order to fulfil their science based commitments. There is no pathway to keep 1.5C within reach without that.
"We welcome the response received from financial institutions to our shared call to action and recognize other companies that interact with the food system across the value chain also need to address deforestation as a necessity for net zero targets as they too must lead the system shift to a nature-positive future."
A roadmap and set of time-bound actions for financial institutions to achieve the commitment's goals is also launching at COP26, on 3 November.
This is part of a package of deforestation announcements announced ahead of Day 2 of COP26.
First published by our sister title Investment Week
