Global Canopy has today released Deforestation-free Transition (DEFT) Pathway to enable investors and banks to scale up and better target engagement with the 500 most influential companies in forest risk commodity markets.
Banks and investors are uniquely positioned to drive rapid progress towards halting deforestation by engaging companies in forest risk supply chains. Yet they have been held back by a lack of specialised knowledge and the complexity of integrating fragmented data sources and frameworks.
DEFT Pathway, a new tool hosted on the market-leading data platform Forest IQ, addresses these problems head on. Financial institutions and investors can locate portfolio companies on a six-stage pathway benchmarking these companies against peers. Clear and visually intuitive tailored company profiles present priority actions for each company to move to the next stage, with indicative timelines to complete each step.
Josh Brewer, Responsible Investment Officer at Oxfordshire County Council Pension Fund, commented: ”I like DEFT Pathway and think it has enormous potential to support engagement activity on deforestation. The Pathway is the ideal tool for an engagement meeting on deforestation, it’s like having a deforestation expert sitting next to you.” (See appendix for sample profiles)
While designing DEFT Pathway, Global Canopy consulted:
- 26 financial institutions managing over US$9 trillion
- 10 companies in the supply chains for forest risk commodities, based in Brazil, Europe and South-East Asia
- three finance sector networks (Ceres, IIGCC and the PRI’s Spring initiative)
- six NGOs with expertise on market-driven deforestation.
Building on these consultations, the key features of DEFT Pathway include:
- prepopulated, independently assessed data
- coverage of the Forest 500 companies – the companies globally with the greatest exposure to forest risk supply chains
- a methodology that synthesises existing frameworks, guidance and metrics, including the Accountability Framework’s Common Methodology and the Finance Sector Roadmap.
- free access, with the tool available now at www.forestiq.org.
Pei Chi Wong, Global Finance Sector Lead at Global Canopy, comments: “The most recent Forest 500 data shows that only 36 of the 150 most exposed financial institutions have a process to engage non-compliant holdings. Yet investors have told us that they have an appetite for stewardship – with the right support. DEFT Pathway will address key concerns that have been a barrier to action.”
Niki Mardas, Executive Director at Global Canopy, added: “Our mission is to reduce market impacts on nature – and that starts with greater transparency and doing away with excuses for inaction. By setting out tailored priority actions with indicative timeframes, DEFT Pathway enables financial institutions to maximise effective engagement with their portfolio companies most exposed to deforestation – and tackle a big risk to us all. We’ve seen that a majority of exposed companies do the bare minimum to address deforestation risk and then falter – DEFT Pathway delivers clarity and transparency on next actions along a six-stage pathway to drive momentum and results.”
The full version, coming in 2027, will draw on feedback from the beta.
DEFT Pathway was made possible by the support of the Betty and Gordon Moore Foundation.