For the last several decades the impact of soybean production across Brazil, Paraguay and Argentina has been seismic. Increasing production is destroying important biomes in South America. This also exposes companies that source soy and related products from the region to business risks and drives up emissions.
In early 2019, 57 investors representing more than $6.3 trillion in managed assets issued an open call to companies to put an end to soybean-driven deforestation by disclosing and eliminating risks within their soy supply chains.
An area overlooked
Brazil is now the world’s largest producer of soybeans, and vast stretches of land in Brazil, Paraguay and Argentina have been deforested in order to achieve these agricultural and economic milestones. Brazil’s southern Amazon region, the Cerrado to the immediate south, and the Gran Chaco that spreads out across southern Paraguay and northern Argentina have all been impacted by land conversion for soy production.
The Cerrado once covered approximately 20 percent of Brazil’s interior (second only to the vast Amazon in its dominance over the country’s land area). It is a swath of tropical savannah equivalent in its size to England, France, Germany, Italy and Spain combined. Yet, up to 80 percent of the Cerrado’s original vegetation cover is gone or seriously degraded, and only a small percentage of what remains is currently protected. Soybean production and cattle ranching are driving this massive deforestation. And a similar storyline holds true for soy in the Gran Chaco. While a 2006 Brazilian Soy Moratorium has been successful in reducing deforestation in the Amazon region, no such agreements exist yet for the Cerrado and the Gran Chaco.
However, the Cerrado Working Group (GTC), comprised of NGOs, producer organizations, Brazilian consumer goods companies, financial institutions and the government, is working with a number of global retailers, investors and consumer goods companies who have signed the Statement of Support to help stop deforestation in the Cerrado. The statement signatories are calling for companies in the meat and soy value chain to adopt policies to halt further deforestation in the Cerrado region.
Investors taking action
A joint release by Ceres and by Principles for Responsible Investment (PRI) explained that investors are looking to break the cycle of soybean production and deforestation by using the power of financial markets to incentivize the food sector to change production practices that harm the environment and negatively impact climate change. Their statement was coordinated by the Investor Initiative for Sustainable Forests, a joint initiative led by Ceres and PRI to eliminate deforestation from cattle and soy supply chains by transforming industry practices.
“Much of the discussion around climate change has been focused on the energy sector,” explained Danielle Carreira, Senior Manager, Environmental Issues at PRI. “However, agriculture, forestry, and land use are a very large portion of the problem. Increased deforestation and land conversion in important biomes are putting business and society at risk. As the problems associated with climate change and deforestation continue, companies will see more investors looking to engage with them on the issue.”
“In light of the latest IPCC report urging the limiting of global temperatures to 1.5 degrees, addressing the emissions impacts from deforestation will be critical,” said Julie Nash, director of food and capital markets at Ceres. “Deforestation creates material market and reputational risks for companies, and is a source of systemic risk across investment portfolios given its contribution to climate change.”
A collaborative effort
With support from the Gordon and Betty Moore Foundation’s Conservation and Financial Markets Initiative, Ceres, PRI and other partners are working to link the food sector to production practices that conserve, rather than damage, natural ecosystems. In turn, this work amplifies and supports the efforts supported by our seafood and agricultural markets initiatives.
Read more:
Investors Call for End to Soybean-Driven Deforestation (Wall Street Journal)
Investors with $6tn in assets call for soya traders to tackle deforestation (Financial Times)
Investors worth 4tr call on firms to tackle supply chain deforestation risks (Business Green)
Increased Demand for Soybean Products; Investors Call for the Eliminate Deforestation Risks (Value Walk)
The reputational risk of deforestation-linked soy: Investors call for action on global supply chains (Food Ingredients First)
‘It’s about managing risk’: Food industry urged to tackle deforestation in soy (Food Navigator)
Investors Call On Big Soy To Cut Out Deforestation (Strategic Sourceror)
Investors call on soy trade companies to eliminate deforestation (Supply Chain Drive)
Incentives for Sustainable Soy in the Cerrado (Report from The Nature Conservancy)
Message sent
Thank you for sharing.