Deforestation progress report

This progress report outlines the steps we have taken over the past few years to address potential agricultural commodity-driven deforestation risks within our investment portfolios.

It highlights how we have achieved the milestones outlined in the COP26 commitment letter, through our engagement activities with companies operating in key sectors, our collaboration with industry initiatives and policy makers, and the evolution of our policies and frameworks aimed at mitigating deforestation-related impacts.

We consider deforestation as a financially material risk with significant potential implications for our clients’ assets if left unaddressed. Consequently, we believe that addressing this matter is an integral part of our fiduciary duty.

Our commitment to use best-efforts to eliminate deforestation driven by agricultural commodities from investment portfolios by 2025 involved a multi-pronged approach with several milestone activities undertaken:

• Assessing exposure to agricultural commodity-driven deforestation
• Establishing a deforestation policy addressing potential exposure
• Engaging with portfolio companies to address potential deforestation in their operations and supply chains
• Advocating for stronger regulatory and policy frameworks that seek to protect forests
• Integrating deforestation risk into investment decision-making
• Increasing investment in nature-based solutions
• Transparently reporting progress

While we have and will continue to deploy our very best efforts to address and eliminate commodity-driven deforestation, we recognise that challenges remain. A collective effort is required globally, from the private and public sector, from civil society and individuals. Importantly, action is required far beyond high-deforestation-risk countries, given the global nature of activities and supply chains linked to deforestation. Therefore, while we have made significant progress against the commitment milestones[1], fully eliminating agricultural commodity-driven deforestation remains an ongoing global challenge.

We acknowledge the significant role we play in accelerating action to drive the change necessary to achieve the upcoming Global Stocktake[2] goal of halting and reversing deforestation and forest degradation globally by 2030.  This is one important part of our wider work to address nature degradation and climate change, which we continue to evolve to seek to drive long-term value creation for our clients.

Read our deforestation progress report

[1] Please refer to page two for the milestones in the Financial Sector commitment letter on eliminating commodity-driven deforestation.
[2] Global Stocktake, 2023.