Awareness, understanding, and intent

Recommended financial institution actions

Financial institutions can demonstrate awareness of deforestation risks, and send a clear signal to the market by:

1. Establishing a policy that seeks to reduce the deforestation footprint of the institution’s financing portfolio.

Financial institutions should implement a policy that:

  • Requires robust sustainability policies and improvement from clients and investees.
  • Reallocates funds away from those that persistently misaligned with the transition to deforestation-free supply chains.

2. Becoming a signatory to the New York Declaration on Forests, the Banking Environment Initiative’s Soft Commodity Compact or other similar initiatives.

Collective commitments help drive sectoral change beyond the commitments of an individual institution. To date, 11 financial institutions have signed up to the Banking Environment Initiative’s Soft Commodity Compact, agreeing to:

“use all reasonable endeavours to work with Consumer Goods Forum supply chains to explore how they can finance the growth of the markets producing palm oil, timber products, soy and beef to the CGF’s required zero net deforestation standards in ways appropriate to their individual business models.“

Additional resources