Investors managing US$16 trillion demand deforestation action

 In this aerial view, red dust of the BR230 highway, known as "Transamazonica", mixes with fires at sunset in the agriculture town of Ruropolis, Para state, northern Brazil, on Sept 6, 2019.
In this aerial view, red dust of the BR230 highway, known as "Transamazonica", mixes with fires at sunset in the agriculture town of Ruropolis, Para state, northern Brazil, on Sept 6, 2019.PHOTO: AFP

OSLO (BLOOMBERG) - Institutional investors with more than US$16 trillion (S$22 trillion) in assets under management, including Europe's biggest asset manager Amundi SA, called on companies to implement anti-deforestation policies for their supply chains and report extensively on how they tackle the issue.

The 230 investors, which also include BP Paribas SA and the California Public Employees' Retirement System, signed a common statement in reaction to the fires that are raging in the Amazon. The initiative, coordinated by non-profit groups PRI and Ceres, is part of growing international pressure on Brazil to deal with the increase in blazes in the Amazon rainforest.

"Deforestation and loss of biodiversity aren't only environmental problems," Jan Erik Saugestad, chief executive officer of Storebrand Asset Management, one of the investors, said in a statement.

"There are significant negative economic effects associated with these issues and they represent a risk that we as investors can't ignore."

The investors are asking companies to present a no-deforestation policy with clear commitments covering their entire supply chains, and set up a monitoring system for suppliers' compliance with that policy. They're also asking for annual reports on deforestation risk exposure and progress on the policy.