Ethos has collected international best practices in the fight against deforestation and summarised them in an Engagement Paper published today. On behalf of the 71 members of its international shareholder dialogue programme, Ethos will initially engage 7 multinational companies particularly exposed to deforestation risks to encourage them to implement concrete and measurable measures to stop the destruction of forests.
Every year, millions of hectares of forest are destroyed to be transformed into pasture, fields for agricultural crops or even mines. According to the UN Food and Agriculture Organization, around 10 million hectares of forest per year were cleared between 2015-2020, an area approximately the size of Iceland. Forest degradation is responsible for about 15% of annual global greenhouse gas emissions and is a risk to our planet's biodiversity and ecosystems. This can result in financial and reputational risk for companies that are directly or indirectly involved in forest destruction.
Concrete and measurable engagement targets
Ethos Foundation, which promotes socially responsible investment, is convinced that the companies concerned must act now and adopt measures to eradicate deforestation. As part of its international shareholder dialogue programme - the Ethos Engagement Pool International (EEP International) - Ethos is publishing an Engagement Paper on deforestation. This document presents 6 expectations Ethos has towards companies:
1. Establish a “No Deforestation” policy
2. Commit to full traceability in the supply chain
3. Adopt a monitoring and verification system including a grievance mechanism
4. Engage with stakeholders and advocate to stop degrading forests
5. Support voluntary sustainability certification
6. Report on the implementation of the policy and the traceability commitment
“Given the impact on the environment and the lack of action by companies, deforestation remains a crucial issue for responsible investors.” explains Vincent Kaufmann, CEO of Ethos. “As shareholder representatives, we want to engage companies along the agricultural value chain and measure their progress. These companies must implement without further delay rigorous global policies and allocate the necessary resources to fight deforestation.”
7 companies targeted in priority
This new engagement campaign led by Ethos on behalf of the 71 members of the EEP International (representing CHF 212 billion of assets under management) focuses initially on seven multinational companies. These companies are active along the beef and soy value chains and are particularly exposed to the problem of deforestation in the Amazon: Ahold Delhaize, Archer Daniels Midland, BRF Brasil Foods, Bunge, Carrefour, J Sainsbury, JBS. Other producers, traders and retailers of agricultural products might be targeted in a second phase.