Norway’s biggest asset investors demand action on Amazon fires

The two largest funds based around Oslo are engaging with three United States companies to stop rainforest destruction.

A tract of Amazon jungle burning as it is being cleared by loggers and farmers in Canarana
Norwegian asset managers and the country's climate minister have called for immediate steps to stop deforestation - and fires that are burning at a record rate - in Brazil's Amazon region [Lucas Landau/Reuters]

The two most sizeable investors in Norway have told global companies to make sure they are not contributing to environmental destruction in the Amazon rainforest of Brazil.

KLP and Storebrand ASA, with a combined $168bn in assets under management, have begun contacting large corporations that have agricultural activities in Brazil, while calling on other investors to help apply pressure to reverse ecological devastation.

“We would like to engage companies and ensure that they are taking necessary actions,” said Jeanett Bergan, KLP’s head of responsible investments, naming Cargill, Bunge Limited and Archer Daniels Midland as the main United States companies that supply Brazilian soya.

She referred to the situation in the Amazon as “very concerning”, in light of the political shift that has taken place in Brazil under new President Jair Bolsonaro, who has encouraged more unrestrained consumption of the country’s natural resources.

KLP alone manages $80bn in funds, and Bergan said companies should seek “responsible sourcing” of their products.

“We encourage other investors and banks to do the same,” Bergan told Al Jazeera. “We are a shareholder in many institutions, and we try to use the leverage we have [to halt] environmental degradation and corruption.”

Meanwhile on Tuesday, Norway’s Minister of Climate and Environment, Ola Elvestuen, also warned companies not to contribute to deforestation. Oil producer Equinor and aluminum producer Norsk Hydro ASA do business in Brazil, and the Norwegian government holds large stakes in those firms. 

‘Critical’ situation

Thus far in 2019, more than 75,000 fires have raged in Brazil – an increase of 85 percent over the prior year, according to the Brazilian National Institute for Space Research.

Nonprofit organisation Amazon Watch says that soya and beef production are among the most significant factors contributing to deforestation and fires.

Matthew Smith, head of sustainable investments at Storebrand Asset Management – which has $88bn in funds – described the natural destruction in the Amazon region as “critical” and “unprecedented”.

“We believe taking care of the rainforest areas in general is the most effective and cheapest way of reaching [the climate goals of] the Paris Agreement,” he told Al Jazeera. “And that’s why we’ve elevated forest protection as one of our key categories of sustainable investments.”

French President Emmanuel Macron has referred to the “international crisis” in the Amazon, as world leaders scramble to compel the Brazilian government and companies to act swiftly. 

Macron has pledged to withhold approval of the European Union’s Mercosur trade agreement if Brazil fails to meet its climate commitments.

“The fires in the Amazon are the latest signs of how critical deforestation has become, where clearing of land for palm oil, cattle, soy and timber are the greatest drivers,” said Smith. “We expect that the companies we invest in [will] address human rights, monitor their supply chains, map their risks and reduce the negative effects.”

Amazon fires: Rainforest destruction at record high

Source: Al Jazeera