Sustainable land use

Deforestation in the Amazon: the cost for indigenous people

2020-06-15T13:29:00+01:00

Besides its grave climatic impacts, deforestation in Brazil is also threatening the rights and lives of indigenous peoples with conflicts over resources in the Amazon resulting in more than 300 killings in the past decade.

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Investors must act now to tackle deforestation and threats to indigenous people in the Amazon

2020-06-25T10:26:00+01:00

By Nabylah Abo Dehman, Manager, Social Issues, Isabella Coin, Analyst, Environmental Issues, and Maria De Filippo, Senior Specialist, Environmental Issues, all at the PRI

To fully understand the risks that climate change poses to their investee companies and portfolios, institutional investors cannot ignore the risks associated with agriculture, forestry and land use.

Investor statement on deforestation and forest fires in the Amazon.

This statement is endorsed by 254 investors representing approximately US $17.7 trillion in assets.

Read the full statement

Why should investors care about land use change?

Land use change represents significant operational and climate-related risks to both companies and investors looking to create long-term value. To minimise these risks, investors can engage with their investee companies about eliminating deforestation from their direct operations and supply chains.

Agriculture, forestry and land use account for 24% of the greenhouse gas emissions arising from human activity, with the majority of this coming from land use change and tropical deforestation and degradation. National governments are aware of this and preparing to take action: according to countries’ Nationally Determined Contributions to the Paris Agreement, emissions reductions from land use, land use change and forestry represent a quarter of all planned emissions reductions by 2030. Companies involved in cattle, soy, palm oil and timber are particularly likely to be affected: at least two-thirds of tropical deforestation is driven by the production of these four commodities.

Beyond climate-related risks, companies directly or indirectly linked to soft-commodity driven land use change can face reputational risks, legal risks and market access risks. Land use change also affects agricultural productivity, through a loss of biodiversity and ecosystem services, soil degradation and disruption of hydrological cycles.

Climatic Tipping Point – Why Investors Should Care

This report highlights how climate tipping points determine how the Earth’s system functions as a whole, with a focus on deforestation within the Amazon rainforest.

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