US$4 trillion fund holders tell Brazil to halt deforestation of the Amazon
PARIS, France: Investment funds managing close to US$4 trillion in assets called on Brazil Tuesday to halt deforestation of the Amazon in an open letter warning that biodiversity loss and carbon emissions from the practice posed a ‘systemic risk’ to their portfolios.
The managers from countries across Europe, Asia and South America expressed their fears that the government in Brasilia was using the Covid-19 crisis to push through environmental deregulation that could “jeopardise the survival of the Amazon”.
“We are concerned about the financial impact that deforestation and the violation of the rights of indigenous peoples may have on our clients and investee companies, by potentially increasing reputational, operational and regulatory risks,” the letter said.
While lockdowns linked to the coronavirus pandemic are likely to see the world’s carbon emissions fall several percentage points, increased deforestation in the Amazon could actually increase Brazil’s annual contribution to global warming.
Environmentalists warn 2020 is on track to be the most destructive year ever for the world’s biggest rainforest, with even more losses than in devastating fires that triggered a global outcry last year.
A total of 829 square kilometres in the Brazilian Amazon, 14 times the area of Manhattan, was lost to deforestation in May alone, according to satellite data from Brazil’s National Space Research Institute (INPE).
That was a 12-per cent increase from last year, and the worst May since record keeping began in August 2015.
Activists accuse Brazil’s President Jair Bolsonaro, a farright climate change sceptic, of emboldening those responsible for deforestation with calls to legalise farming and mining on protected lands.
The fund managers, who collectively control more than US$3.75 trillion worth of assets, urged Bolsonaro’s administration to show ‘clear commitment’ to reducing deforestation and to protect indigenous rights.
Seiji Kawazoe, from Japan’s Sumitomo Mitsui Trust Asset Management – one of more than two dozen firms to sign Tuesday’s open letter – said avoiding negative impacts from climate change had become a prime concern of the holding.
“The Amazon is one of primary areas of rainforest which impacts the global climate and we joined the letter to call for urgent action from the government to avoid taking actions that have a negative impact on climate change,” he told AFP.