UNEP Launches New Agricultural Investment Tool to Address Deforestation Concerns
Jakarta. Trade, unsustainable production, processing and retail sales of products such as soy, palm oil and beef are factors often associated with deforestation around the world, but a new tool has emerged that could reduce associated future risks.
Thirty financial firms based in a number of countries are the subjects of a joint study by the United Nations Environment Program (UNEP) and the Natural Capital Declaration (NCD), entitled “Bank and Investor Risk Policies for Soft Commodities.”
A report on the result of the study, launched last week, highlights the vital urgency to pay attention to global deforestation and degradation risks.
Along with the report, UNEP and NCD launched their jointly developed Soft Commodity Forest-Risk Assessment Tool.
A joint press statement from the two organizations said the majority of the 30 institutions included in the study did not have policies to understand or address rules and regulations on forest conservation.
This despite the fact that forests are often affected by such companies’ investment in the forestry and agricultural sectors.
The emergence of the new tool can create an evaluation structure that will help those institutions and others alike to assess potential risks in regards to deforestation and forest degradation, the statement says.
UN undersecretary general and UNEP executive director Achim Steiner strongly believes in the importance of regulating deforestation due to the large number of leading consequences. On the other hand, strictly limiting the exploitation of tropical rainforests can lead to risks associated with water security, food, energy, health and climate on a global scale.
“Banks and investors who engage in the destruction of forests through their lending and investing practices expose themselves to potentially significant regulatory, reputational, legal, operational and market risks,” he said.
According to Steiner, the guided resolution should be to commit to the tools and methods that aid in limiting deforestation and instead generate value chains for products.
Andrew Mitchell, NCD co-director and chief executive of Global Canopy Program, agrees with the new tool and its potential.
“The tool now gives the financial firms the means to update or develop soft commodity policies using the minimum and best-practice suggestions provided in the report,” he said.
Findings from the report suggest that the best performing companies, which have been looking after risks, include the African Development Bank, FMO Development Bank, the International Finance Corporation, Standard Chartered Bank and Sumitomo Mitsui Trust Bank.
Only 13 percent of the 30 companies included the study have been successfully developing products and services that provide safe and sustainable trade of commodities.
UNEP says companies and other institutions can now use this tool to adjust factors that will affect their scores in the deforestation control, and can use the 30 companies studied as a comparison or benchmark to improve their own policies.
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