WWF-Brazil and the Instituto Latino-Americano para Justiça Coletiva (ILAJUC) have released today a guide titled “Navigating Deforestation Risks and Embracing Sustainability in Brazilian Investments: A Guide for Investors,” designed to help investors identify, prevent, and mitigate risks associated with deforestation while protecting both environmental integrity and financial interests.
The guide examines the role of deforestation and ecosystem conversion in the climate crisis, highlighting the threats to the Amazon and the Cerrado biomes. It outlines the legal framework addressing environmental liabilities and deforestation, focusing on both international and domestic legislation, including due diligence standards and deforestation-specific laws.
The document details the drivers behind deforestation and conversion, analysing challenges within the meat and soy industries, and discusses the role of financial institutions in promoting sustainability, including their potential liability for environmental damage.
The guide concludes with a call to action for investors, outlining a step-by-step approach to managing deforestation- and conversion-free supply chains, urging them to embrace comprehensive due diligence practices to mitigate risks and promote a greener future for Brazil.
“As the threat to the Amazon continues and the deforestation crisis rages in the Cerrado, along with the emergence of mandatory due diligence requirements for companies regarding environmental and human rights practices, investors must prioritize and actively enforce due diligence to ensure that supply chains are free from deforestation and land conversion”, said Natalie Rosen, Senior Researcher at ILAJUC and the author of the guide. “This guide is specifically designed to help investors identify, prevent and mitigate the risks associated with their portfolio activities, thereby safeguarding both environmental integrity and their financial interests.”
Key Insights from the Guide Include:
• Global Implications of Deforestation: Deforestation in Brazil has far-reaching consequences for climate regulation, biodiversity, and essential ecosystem services, posing significant legal and financial risks for investors.
• Evolving Legal Framework: The responsibility for addressing deforestation has evolved into a shared obligation. Investors are increasingly held accountable for the environmental practices of their portfolio companies, driven by specific legislation like the EU Deforestation Regulation (EUDR) and mandatory due diligence requirements for corporations.
• Forces Behind Brazil’s Deforestation Crisis: Although Brazil has strengthened its environmental protection laws, challenges remain due to enforcement issues and systemic loopholes, particularly in the cattle and soy industries.
• The Role of Financial Institutions: Financial institutions are called upon to integrate comprehensive due diligence practices into their investment decisions, moving beyond mere legal compliance. Investors must actively ensure their supply chains are free from deforestation and land conversion.
• Step-by-Step Checklist: The guide provides a practical checklist to assist investors in navigating the investment landscape, ensuring deforestation- and conversion-free supply chain choices.
The guide is now available for download on the WWF-Brazil and ILAJUC websites in English and in Portuguese. Investors are encouraged to utilize this valuable resource to align their portfolios with sustainability goals, mitigate risks, and contribute positively to environmental conservation efforts.
The summarized step by step version can also be read in English and in Portuguese.
Media Contact:
About WWF-Brazil:
WWF-Brazil is part of the World Wildlife Fund network, dedicated to conserving nature and reducing the most pressing threats to the diversity of life on Earth.
About ILAJUC:
Instituto Latino-Americano para Justiça Coletiva (ILAJUC) focuses on promoting collective justice and environmental sustainability in Latin America.
