News & Publications

Opinion Column - 23/09/2019

Amazon Fires in a Global Context of Deforestation: need for increased Investor awareness

Over the past weeks, forest fires have been ravaging the Brazilian Amazon region and made the headlines in the international newspapers during several days. The number of forest fires is higher in the Amazon regions where they are used – mainly by farmers - as the main tool to free land for agriculture.

Investors & Asset Managers should be aware of the reputational and financial risks they are facing if they don’t take sufficiently into account this issue in their investment decisions.
Moreover, the huge media coverage and focus on the Amazon region should not divert also attention from other vulnerable regions. On the other hand, engaging companies on this issue could also be an opportunity in terms of reputation and reduced risk exposure.

Vigeo Eiris monitors the involvement of companies of different sectors in deforestation through its Controversy Risk Assessment database, either through direct impact on biodiversity (for companies that have a direct involvement through forest management, mining activities, oil & gas extraction, etc) or through supply chains (mainly for food production). In addition, Vigeo Eiris assesess companies commitments and due diligence measures on different sustainability drivers linked to deforestation such as Biodiversity, Environmental and Social standards in the Supply Chain and Human Rights.

As indicated below, Vigeo Eiris findings show that investors should not only care for Amazon fires but also for deforestation in other vulnerable regions such as Indonesia and Malaysia, where the big majority of controversies are reported.

Vigeo Eiris Key Findings

  • Overall, 90 controversies, related to deforestation, and involving 50 companies, were identified in Vigeo Eiris controversy database
  • 22 cases also involved Human Rights violations with responsibility of companies
  • The Food sector is the most exposed, facing 58 cases overall
  • The most affected countries are Indonesia and Malaysia

Download the full report below

Download :
icon-download-34x36 1909_VigeoEiris-DeforestationPaper-final
Keywords : Deforestation, ESG, sustainability risk