Global Banks Sign Zero Net Deforestation Compact with Clients
In 2010, the Consumer Goods Forum’s (CGF) Board of Directors committed their 400 members, with combined purchasing power of over $3 trillion, to help achieve zero net deforestation by 2020. Now, a Soft Commodities Compact has been launched, the result of 2 years of extensive collaboration between the CGF and Cambridge University's Banking Environment Initiative (BEI), with guidance from WWF, to support the goal of zero net deforestation.
The BEI Soft Commodities Compact includes 2 commitments:
- Banks will require clients with significant operations in palm oil, forestry, or soy in high-risk geographies to adopt credible third party certification, driving improvements in their sustainability performance in line with CGF expectations by 2020.
- Banks will work with consumer goods companies and their supply chains to develop responsible financing solutions that support the growth of markets producing palm oil, timber products, soy or beef without contributing to deforestation.
In May, the World Economic Forum hosted Wall Street Banks, the BEI, and CGF companies in New York. Last week, Asian banks convened at the the BEI Forum 2014 in Hong Kong.
The civil society advisor to the BEI, WWF’s Commodities Finance programme has assisted negotiations and the formulation of the commitment, as well as the development of the Sustainable Shipment Letter of Credit.
We welcome and strongly encourage other banks to join the commitment to support zero net deforestation. The compact makes crucial strides towards stemming tropical deforestation, slashing portfolio emissions, and protecting human rights – while strengthening the portfolio and generating new business.