Investors are increasingly engaging companies to better manage deforestation risks in their supply chains – an issue that has traditionally been overlooked, according to US-based non-profit Ceres. The issue was raised in the recent special report on the impacts of global warming of 1.5°C above pre-industrial levels by the Intergovernmental Panel on Climate Change (IPCC), said Brooke Barton, senior director of Ceres’ water and food programmes. “Within the industries that are affected, there is also growing evidence of material risk – both reputational risk and market access risk. An example of this is IOI Group in Indonesia, which had its responsible palm oil certification taken away because of deforestation. [It saw] significant share price impacts due to loss of customers,” Barton said.

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Environmental Finance