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Deforestation management needed to sustain global soybean industry

Soy, used primarily for animal feed and cooking oil, is the second largest agricultural driver of deforestation, behind livestock; covering more than one million square kilometres of farmland cultivation around the world. Because of its importance, international investors representing $6.3tn in assets have backed a call for agribusinesses to disclose and eliminate the risk of deforestation within the soybean supply chain.
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Agriculture, forestry and landscapes are responsible for a quarter of man-made greenhouse gas emissions. Last year the Intergovernmental Panel on Climate Change warned that net anthropogenic greenhouse gas emissions need to fall by 25& by 2030, and to net zero by 2070, if humanity is to avoid global temperature rises above a dangerous threshold level of 2°C.

Social risks connected to deforestation


The statement was organised by the Investor Initiative for Sustainable Forests and has been backed by 57 companies, including the California Public Employees’ Retirement System (Calpers)—one of the world’s largest private investment funds—as well as Aberdeen Standard Investments, Aviva and BNP Paribas Asset Management.

It warns that the environmental and social risks connected to deforestation represent serious risks to the financial performance and sustainability of companies in the soy business.

"While we recognise the important role of agriculture and soybean production to economic development and the livelihoods of farmers, we are also concerned that the environmental and social issues associated with unsustainable soybean production could have a material impact on companies that source the commodity," the statement reads.

"We expect companies to demonstrate a commitment to eliminating deforestation within their entire soybean supply chain, and will seek evidence of this on multiple levels."

The signatories to the statement will expect companies to measure, monitor and disclose their exposure to deforestation, to improve the traceability of their products and to articulate strategies to improve their sustainability.

"As a long-term investor, we consider climate change to be a systemic risk to our global investment portfolio and view the reduction of deforestation as one of many solutions to help manage our exposure to climate change risk," said Beth Richtman, Calpers managing investment director, sustainable investments programme.
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