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Investors with $3.7 Trillion in Assets Warn Brazil Over Surging Deforestation

Words by Leon Kaye
Deforestation

This week more than two dozen investors backed by $3.7 trillion in assets under management sent letters to several Brazilian embassies warning them about threats, both environmental and financial, tied to accelerated deforestation.

“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,” reads the letter, signed by organizations including Legal and General Investment Management of the U.S., Japan’s Sumitomo Mitsui Trust Asset Management, and the Dutch investment management firm Robeco.

Leading the charge is Storebrand Asset Management, a pension and investment management firm based in Norway.

Storebrand’s action on this front may not be surprising considering the role its home country has had in decarbonization and vehicle electrification — not to mention the nation’s sovereign wealth fund’s past efforts to take on coal producers and automakers such as Volkswagen.

But these investors are also joined by the Church of England, which earlier this week issued a statement warning of the consequences of environmental racism. All of the signatories made it clear that the policies of the current Brazilian government, led by right-wing populist Jair Bolsonaro, will make it difficult for Brazilian companies and suppliers to access overseas markets. The letter also makes it clear that investors could soon view Brazilian sovereign bonds as too high of a risk.

When it’s not accused of turning a blind eye to human rights violations and environmental degradation, Bolsonaro’s administration has encouraged the occupation of lands populated by Indigenous peoples. Brazil’s president has also dismissed the true causes of ongoing forest fires across the country, even going so far as to blame Leonardo DiCaprio as being responsible for the fires. When he is not lashing out at his critics and Brazil's marginalized communities, Bolsonaro has encouraged the development of more agriculture and mining across the nation’s Amazon forests.

In addition, while Bolsonaro has repeatedly mocked the novel coronavirus pandemic as a “little flu,” his administration has also been clear about its use of the pandemic as an excuse to roll back environmental regulations and steal lands home to local tribes.

On that point, this group of investors was harsh in its criticism of Provisional Measure 90, a federal decree that declares open season on public lands across Brazil. “Should the measure pass, it would encourage further illegal occupation of public lands and widespread deforestation which would jeopardize the survival of the Amazon and meeting the targets of the Paris Climate Change Agreement and undermine the rights of indigenous and traditional communities,” say the letter’s signatories.

As of press time, the investors' demands to have meetings with Brazilian officials have gone unanswered.

The letter follows on the heels of similar threats made last week by seven leading Europe-based investment companies, which last week said they would divest from such Brazilian industries as beef, grains and government bonds if the rapid rate of deforestation in Brazil was not reversed.

Image credit: Sébastien Goldberg/Unsplash

Leon Kaye headshotLeon Kaye

Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.

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