News

Deforestation Human Rights Risks Call for Regulation

Campaigners tell policymakers to create ambitious measures to tackle abuses, as new tracking tools offer greater transparency and traceability.

A new report from non-profit group Global Canopy has stressed the key role that regulation must play in addressing human rights risks linked to deforestation.

The tenth annual Forest 500 report tracked the policies and performance of 350 companies and 150 financial institutions in relation to deforestation. Global Canopy drew ten lessons for enabling and accelerating action in this area, including what it described as an “urgent” need to better understand the human rights impacts of deforestation.

“The most concerning trend of all is the total blindspot on human rights,” the report read. “Deforestation is inextricably linked to land use conflict, violence and threats against forest, land and human rights defenders, making a focus on human rights imperative.”

According to Global Canopy’s findings, just 1% of companies have published a statement on all the human rights commitments they were being assessed on. Additionally, all 28 firms continuously assessed since 2014 have scored zero in the human rights section of the Forest 500 methodology every year.

“For the most part, voluntary action – especially from companies – has failed,” Emma Thomson, Forest 500 and Tracking Lead at Global Canopy, told ESG Investor. “Regulation for companies needs to be stronger, including for the human rights abuses that are associated with deforestation and conversion.” 

Human rights abuses often accompany or enable deforestation and conversion, which means there’s a close connection between the two, Thomson explained. “They need to be addressed together,” she added. “Without that, deforestation will not be effectively eliminated.”

The report urged international agreements, frameworks, and efforts to include action on the human rights abuses that precede or accompany deforestation and conversion, and called on corporates and financiers to address these issues as part of any effective approach on deforestation.

Companies were also advised to publicly set and begin the implementation of commitments respecting human rights, while financial institutions were told to require clients and holdings to act on these issues.

Filling the (regulatory) void

Against this background, Global Canopy’s report underlined the essential role that regulators should play in accelerating and scaling up action on deforestation.

“A decade ago, we were staring into a regulatory void,” the report read. “New regulation in key jurisdictions, like the EU and UK, should accelerate corporate action on this issue.”

Last June, the European Union Deforestation Regulation (EUDR) became the world’s first deforestation due diligence law, requiring firms trading in or placing products containing seven key commodities on the EU market to conduct due diligence to ensure their products are not linked to deforestation. Large businesses are required to demonstrate compliance by this December, while small and medium-sized businesses have until June 2025.

The UK Environment Act, for its part, has only covered illegal deforestation so far, and its due diligence portion requires secondary legislation to become law.

According to Global Canopy’s report, only 1% of companies are on track to be compliant with incoming EU legislation – though none of it covers the human rights abuses that go hand-in-hand with deforestation, it said.

In the US, deforestation legislation has begun to develop in the form of the US Forest Act. “But it is in very early stages [and] has a long way to go,” said Thomson.

Financial institutions are not currently subject to the EUDR or the UK’s deforestation act. Over half (55%) of the companies included in the Forest 500 report have no publicly available policy on deforestation.

“The finance sector must be included in regulatory measures, and legislation needs to be ambitious and feature deforestation-associated human rights abuses,” Thomson insisted.

Next year, Global Canopy is due to conduct a stocktake of the companies and financial institutions exposed to deforestation, conversion, and associated human rights abuse risks through their supply chains and financial portfolios.

Elsewhere, the sixth session of the United Nations Environment Assembly, taking place in Kenya this week, will be attended by environmental ministers and leaders from over 180 nations. Together, they will aim to negotiate resolutions on nature-related issues. Avoiding emissions through the protection of landscapes to limit deforestation, could be one of them.

Developing a toolkit

Alongside creating industry guidance, Global Canopy has helped develop several tools to tackle deforestation. Last November, it collaborated with the Stockholm Environment Institute and Zoological Society of London to launch Forest IQ – a data tool aiming to identify and highlight the financial sector’s involvement in deforestation.

The tool comprises three core indicators, including exposure, materiality and reported performance, and integrates data from existing datasets – such as Global Canopy’s Forest 500.

In addition, Global Canopy and Make My Money Matter released in 2022 an interactive guide, which provided a framework for pension schemes to map and understand deforestation risks.

Last week, Inclusive Development International (IDI) and the Data Science Institute at the University of Chicago launched an open-access online tool using data science methods to map global palm oil supply chains.

The tool links global corporations to the on-the-ground impacts of palm oil consumption – such as hundreds of thousands of square kilometres of deforestation. IDI noted that palm oil’s industrial cultivation has been a major driver of global deforestation and biodiversity loss, and has also sparked human rights violations such as land grabs and child and forced labour implications.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2024 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top
Share via
Copy link
Powered by Social Snap