The International Investors Group on Climate Change (IIGCC) has announced the launch of the Deforestation Investor Group (DIG), a platform to help investors get to grips with and manage deforestation risk.
The new platform, which was trialled last year, builds on the Financial Sector Deforestation Action (FSDA) initiative, aiming to broaden the reach of investor action on deforestation by supporting investors at any stage of their engagement with financial risks from deforestation.
FSDA was active from 2021, bringing together more than 30 financial institutions that made a commitment to work towards eliminating commodity-driven deforestation from their investment and lending portfolios by 2025.
The DIG is underpinned by new guidance on integrating deforestation into net zero strategies, with tailored recommendations for consideration across asset classes. The guidance is intended to help investors implement the IIGCC Net Zero Investment Framework.
The guidance was developed by a targeted IIGCC working group with input from FSDA members and wider consultation. It recommends investors start with five priority actions:
- assess portfolio exposure to deforestation risk;
- develop a deforestation policy;
- integrate deforestation considerations into investment decision-making;
- address material exposure through portfolio stewardship;
- advocate for regulation and policies that curb deforestation and scale deforestation- and conversion-free supply chains.
Edward Mason, partner and head of public markets engagement at Generation Investment Management, said the new guidance and DIG were “the next steps in the mainstreaming of investor action on deforestation”.
Investors seeking to implement the deforestation guidance are eligible to participate in quarterly meetings and join the DIG, the IIGCC said.
The Church Commissioners for England have already indicated their intention to utilise the DIG for their work on deforestation.
