Amazon Fires Aftermath: Our Ongoing Effort to End Deforestation

Deforestation briefly caught the world’s attention this summer, as thousands of fires – 84% more than the previous year – blazed in the Amazon. Concern surged as the “lungs of the world” went up in smoke and scientists warned that the Amazon was approaching a point of irreversible ecological collapse.

Since tropical forests usually are too wet for fires to ignite, it’s unusual for them to burn. When they do, there’s one conspicuous culprit: humans.

The Amazon fires this summer were no exception. Most of the Amazon’s fires occurred on land that was deforested earlier in the year and then was intentionally set ablaze to finish converting the area to agricultural lands, according to the Monitoring of the Andean Amazon Project (MAAP).

To combat the unnecessary destruction of tropical forests, it is imperative that corporations stop purchasing products cultivated through unsustainable agricultural practices.

Green Century has been pressing corporations to protect tropical forests since 2012, and other investors increasingly are joining the effort. In fact, 244 institutional investors, representing $17.2 trillion in assets under management, signed an August letter calling on companies to take urgent action to address deforestation in their supply chains.

Green Century helped recruit signatories to the letter, the largest ever investor letter on deforestation, and commenced our own engagements with some of the biggest companies operating in the region.

This attention from some of the world’s largest asset managers and owners clearly indicates the growing realization that healthy forest ecosystems, a stable climate, and economic growth are interconnected.

Unfortunately, the Amazon wasn’t the only region to experience a spike in forest fires this year. Other sensitive ecosystems – like the Brazilian Cerrado and the multi-state Gran Chaco, where agricultural expansion drives deforestation – also have experienced more intentional blazes this year.

In a tragic irony, scientists warn that the forest fires in South America this year could disrupt rainfall patterns in key regions that produce beef and soy, “potentially knocking a key driver of…economic growth.”

Companies that source commodities from the region should be concerned about disrupted rainfall patterns. This is not an abstract concern. Deforestation poses real operational, reputational, and regulatory risks to companies.

Green Century will continue to press companies to set – and realize – sustainable sourcing commitments to address the risks associated with the destruction of tropical forests, even as attention to the issue wanes.

 

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Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to a variety of risks including interest rate, credit, and inflation risk. A sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.

This information has been prepared from sources believed reliable. The views expressed are as the date of this writing and are those of the Advisor to the Funds.

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