abusesaffiliationarrow-downarrow-leftarrow-rightarrow-upattack-typeburgerchevron-downchevron-leftchevron-rightchevron-upClock iconclosedeletedevelopment-povertydiscriminationdollardownloademailenvironmentexternal-linkfacebookfiltergenderglobegroupshealthC4067174-3DD9-4B9E-AD64-284FDAAE6338@1xinformation-outlineinformationinstagraminvestment-trade-globalisationissueslabourlanguagesShapeCombined Shapeline, chart, up, arrow, graphLinkedInlocationmap-pinminusnewsorganisationotheroverviewpluspreviewArtboard 185profilerefreshIconnewssearchsecurityPathStock downStock steadyStock uptagticktooltiptwitteruniversalityweb
Article

2 Dec 2021

Author:
Financial Times

Brazil: Investors and food retailers failed to act on pledges to divest from the country over deforestation, analyses Financial Times

NPR

"Asset managers fail to act on pledges to divest from Brazil over deforestation", 02 December 2021

...Several European investment groups that last year threatened to divest from Brazil over soaring deforestation have not done so, even as new figures show the pace of destruction of the Amazon rainforest is at its worst since 2006. European food retailers, including Britain’s Tesco and M&S, have also shied away from threats to boycott Brazilian produce, saying now that they favour a united approach by industry and government to stop the felling of the world’s largest rainforest.

The lack of action has prompted concerns about the commitment of asset managers and retailers to take effective action if environmental targets are not met...

In June 2020, more than two dozen financial institutions around the world wrote to the Brazilian government, demanding it rein in surging deforestation which they said has created “widespread uncertainty about the conditions for investing in or providing financial services to Brazil.” Seven of the companies — including Norway’s largest pension fund KLP and the UK’s Legal & General Investment Management — explicitly threatened to divest from meatpackers and grain traders linked to deforestation as well as Brazilian sovereign bonds, if the situation did not improve...

“Exclusions and active ownership are two equally important tools that we as an investor have at our disposal. Divestment can be the solution but isn’t always. Sometimes engagement takes us further,” said Sara Skärvad of Storebrand...

Norway’s KLP, Storebrand and UK asset manager LGIM told the Financial Times that they had not divested from Brazil over environmental concerns in the past year. Swedish state pension fund Ap7 said it had not divested, but added that it had “blacklisted JBS a couple of years ago” because of concerns over labour practices. Oslo-based DNB Asset Management said it had “previously excluded” companies based on deforestation risk, and Brazilian companies with links to illegal deforestation were not a part of its actively managed mandates. It said it was in “ongoing dialogue” with agribusiness group Bunge, which is included in index funds the group manages.

All of the investment groups that spoke with the Financial Times said they would still consider divesting if Brazil did not take further action...

Last year, more than 40 European companies, including Tesco and Marks and Spencer, warned they could boycott Brazilian produce if a land reform bill widely expected to spur Amazonian deforestation passed Congress. Although the bill did not progress, deforestation has nonetheless continued to increase...