Global investors managing $5.2 trillion demand to meet Brazil diplomats over deforestation

Deforestation of Brazil's Amazon surged to an 11-year high in 2019. PHOTO: AFP

BRASILIA (REUTERS) - A group of 29 global investment firms that manage US$3.7 trillion (S$5.2 trillion) are demanding meetings with Brazilian diplomats around the world to call on right-wing President Jair Bolsonaro's government to stop soaring deforestation in the Amazon rainforest.

The investors, led by Norwegian insurance and pension firm Storebrand Asset Management, sent letters to Brazilian embassies in seven countries, calling for meetings and expressing concern that Brazil is rolling back environmental protections, according to a statement that included a copy of the letter.

"The escalating deforestation in recent years, combined with reports of a dismantling of environmental and human rights policies and enforcement agencies, are creating widespread uncertainty about the conditions for investing in or providing financial services to Brazil," the letter said.

Deforestation of Brazil's Amazon surged to an 11-year high in 2019, Bolsonaro's first year in office, and has risen a further 34 per cent in the first five months of 2020, according to preliminary data from government space research agency INPE.

Environmental advocates blame Bolsonaro for weakening protections and causing a surge in deforestation and forest fires since he took office in 2019.

Bolsonaro has argued Brazil is a model of conservation, while calling for more mining and farming in the Amazon region.

Brazil's Foreign Ministry did not respond to a request for comment.

Storebrand Asset Management CEO Jan Erik Saugestad said in an interview that while previous initiatives focused on pressuring Brazilian companies, this new effort is aimed squarely at the government.

The 25 European firms that signed on include Norway's Nordea Asset Management and the Church of England, which has a 2.8 billion pound (S$4.85 billion) pension fund. Britain's Legal & General Investment Management is among the largest investors with 1.2 trillion pounds under management.

US-based firms Domini Impact Investment and Pax World Funds have also signed the letter, while Sao Paulo-based Fram Capital is the only Brazilian signatory.

While Europe has traditionally been the most vocal critic of Amazon deforestation, Japan's Sumitomo Mitsui Trust Asset Management signed the letter, and Senior Sustainability Officer Seiji Kawazoe said he expects more Japanese firms to take issue with deforestation in the future.

The letter does not spell out consequences if Brazil's government does not take action, but seven European financial firms told Reuters last week they could divest from Brazil-linked holdings if environmental destruction continues.

Many of those firms also signed the letter to embassies.

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