- APG and Robeco are two of the most recent companies to sign on to the Cerrado Manifesto, which calls for an end to deforestation in Brazil’s Cerrado biome.
- The Manifesto is a two-page document that puts the onus on soy and meat producers and traders, as well as other companies in the commodities supply chain, to prevent runaway destruction of the Cerrado savannah.
- According to experts, about half of the biome’s native forests and vegetation have already been cleared for agricultural expansion.
- While more than 70 companies have signed the Cerrado Manifesto, including large fast food companies and supermarkets like McDonalds and Walmart, experts say the initiative won’t likely be successful without participation by large commodities firms, such as Cargill, ADM and Bunge.
More soy and meat companies have signed on to the Cerrado Manifesto, aimed at creating additional protections for the critically important biome in Brazil. New signatories include APG, Robeco, Legal and General Investment Management (LGIM), and Green Century Capital Management.
The manifesto, launched in 2017, is intended to support and expand existing environmental legislation, and calls on companies in the soy and meat supply chain to make a voluntary pledge to help curb further deforestation. While Brazil’s Forest Code does provide some protection to the region, the Manifesto points out that the Cerrado biome needs additional protections since up to 80 percent of rural properties there could be legally converted from native vegetation to soy and other crops.
New signatories to the Manifesto reportedly have trillions of dollars in assets.
The Cerrado is home to many of Brazil’s most important water aquifers and river systems. But the biodiverse savannah was destroyed at a breakneck pace from 2013-2015 – it has already lost more than half of its original area. The pace and scope of the Cerrado’s destruction has exceeded the Amazon’s destruction for more than a decade.
According to local residents in one area, springs and small streams are no longer flowing, and river levels are dropping. They believe that intensive irrigation for extensive commercial soy, corn and cotton crops is to blame.
Unchecked damage in the Cerrado could lead to changes in regional, and possibly continent-wide, rainfall patterns and severe reductions in carbon dioxide (CO2) storage. The Cerrado stores the equivalent of 13.7 billion tons of CO2, making it an important Brazilian buffer against climate change.
“Investors are realizing the importance of protecting ecosystems like Cerrado, as their beneficiaries face a world too hot to retire into,” said Jeremy Coller, founder of the FAIRR Initiative, in an interview with The Actuary. The FAIRR Initiative coordinated investor support. “Deforestation puts almost a trillion dollars of listed equity turnover at risk, and that makes the rapid pace of native vegetation loss in Cerrado a material concern for investors.”
Over 70 large corporations have already signed on to the agreement, including major fast food chains and supermarkets such as McDonalds, Tesco and Walmart. However, large commodities companies such as Cargill, ADM and Bunge – all very active in the Cerrado – have yet to signal their willingness to join the initiative. Analysts say the traders’ participation will likely be essential to the Cerrado Manifesto’s success.
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