Robeco commits to eradicate deforestation in portfolios

Dutch asset management giant Robeco has outlined a plan to eliminate exposure to deforestation in its portfolios.

In a recently published paper, the firm outlined three core “pillars” in its approach; broadening individual stewardship efforts including corporate engagement, focusing on financial sector collaborative initiatives such as the Nature Action 100, and widening engagement with governments in deforestation-afflicted countries.

Robeco has set a commitment to eliminate deforestation driven by high-risk commodities across its investment portfolios by 2025. 

This forms part of the COP26 Deforestation Commitment signed by more than 30 financial institutions with collectively more than €8 trillion in assets, including Robeco, at the climate summit in Glasgow in 2021.

Laura Bosch Ferreté, an engagement specialist at Robeco’s Singapore branch, said: “Deforestation sits at the centre of climate change, biodiversity loss, as well as and food and water insecurity, posing a systemic risk to companies and investors.

“Wealth and well-being cannot exist without nature. Robeco acknowledges how critical preserving biodiversity and halting deforestation is not only to our long-term value creation, but also to the stability of our socio-economic systems.”

The deforestation report from Robeco shared data showing that agriculture drives up to 99% of all deforestation in the tropics, either to directly meet demand for commodities, or due to indirect mechanisms such as land speculation.

The topic of deforestation was recently tackled at Net Zero Investor’s first Natural Capital Forum, in which Olly Hughes, managing director for forestry at asset managers Gresham House, argued that the forestry industry needs to overcome a negative reputation and can thrive while underpinned by sustainability credentials.