Nearly 70 asset owners have backed a statement calling on companies to reinforce their efforts to make sure their operations and supply chains do not contribute to deforestation.

The statement is a response to the forest fires in Brazil and Bolivia and has been signed by 230 institutional investors with $12.6trn (€11.3trn) in assets under management.

Asset owners accounted for 30% of the signatories, and included Norway’s KLP, Swedish pension buffer funds, UK local authority pension investors and Swiss pension funds – via proxy voting group Ethos.

“It is with deep concern that we follow the escalating crisis of deforestation and forest fires in Brazil and Bolivia,” the statement said.

“As investors, who have a fiduciary duty to act in the best long-term interests of our beneficiaries, we recognise the crucial role that tropical forests play in tackling climate change, protecting biodiversity and ensuring ecosystem services.”

In a press release, the Principles for Responsible Investment (PRI) and Ceres, the organisations that co-ordinated the statement, explained that the investor statement called on companies to tackle financially material deforestation risks, including market and reputational risks, within their operations and global supply chains.

It specifically asked companies to:

  • publicly disclose and implement a commodity-specific ‘no deforestation’ policy with quantifiable, time-bound commitments covering the entire supply chain and sourcing geographies;
  • establish a transparent monitoring and verification system for supplier compliance with the ‘no deforestation’ policy; and
  • report annually on deforestation risk exposure and management, including progress towards the company’s ‘no deforestation’ policy

Some of the investors signing the statement had already turned their attention to relevant investee companies in the wake of media coverage last month of fires in the Amazon rainforest. 

According to a press release from KLP late last month, the Norwegian public sector pension provider had contacted firms trading significantly in agricultural commodities from Brazil to ask for “rapid dialogue and concrete action in light of the very serious situation”.