Pension funds put pressure on Brazilian govt to act on deforestation

Pension funds and other investors have met with the Brazilian Congress to discuss potential improvements to the country’s sustainable management of the Amazon rainforest.

The 26 financial institutions met with Congress to outline five areas of development they wanted to see improvements in, or risk losing their investments.

These areas were: A significant reduction in deforestation rates; the enforcement of Brazil’s Forest Code; the ability of Brazil’s agencies to carry out their mandates effectively, as well as any legislation that may impact forest protection; the prevention of fires in or near forest areas; and public access to data on deforestation, forest cover, tenure and traceability of commodity supply chains.

Following the meeting, the Brazilian government agreed to deploy the military in future to help prevent forest fires.

Danish pension fund, MP Pension, is one of the investors participating in the initiative. Its investment director, Anders Schelde, commented: "It is gratifying that something is starting to happen in Brazil. But the decision is only the first small step. Much more is needed to save the rainforest in the Amazon.

"If large investors come together, we represent a considerable sum of billions. Brazil needs this money badly, so if we threaten to pull our investments out of the country, they will have to listen.”

Engagement with the Brazilian government began on 23 June 2020, when 34 financial institutions wrote an open letter to Brazilian embassies calling for action on deforestation.

The 34 institutions represent over $4.6trn in funds.

The group of 26 investors that attended the meeting included pension funds from the across Europe.

The meeting attendees were: Storebrand Asset Management, BlueBay Asset Management, NN Investment Partners, Robeco, KLP, SEB Investment Management, AP2 Second Swedish National Pension Fund, Legal and General Investment Management, Nordea Asset Management and Sumitomo Mitsui Trust Asset Management, Aviva Investors, Actiam, a.s.r. asset management, Church Commissioners for England, LGPS Central, Border to Coast Pension Partnership, Brunel Pension Partnership, Surrey Pension Fund, Northern LGPS, The Local Authority Pension Fund Forum, Church of England Pensions Board, Comgest, Fram Capital, Domini Impact Investment, MP Pension, Pax World Funds, and AP Pension.

Commenting on the meeting, Storebrand Asset Management CEO, Jan Erik Saugestad, said: "We are pleased to hear that the House share our concerns.

"The representatives expressed that they will not vote on matters related to the environment that may damage Brazil's image abroad and any approval of bills needs to go through proper process.

"This is important to ensure a regulatory framework that is consistent, long-term and protects the forests and the best interest of Brazil, companies, and investors.

“Given the recent developments with increasing deforestation, action will speak louder than words."

    Share Story:

Recent Stories

How the US’s robust securities law can benefit European investors
Over recent years several financial scandals have shocked investors, such as the Danske Bank money laundering case. When a scandal like this occurs, investor returns suffer, which is why many seek redress. Many European investors seek to recover assets lost as a result of securities fraud through U.S. courts, with their robust securities laws.

In this podcast, Jeremy Lieberman, Managing Partner at Pomerantz LLP, talks to European Pensions Editor, Natalie Tuck, about how European investors can use U.S. courts to recover assets lost to securities fraud and the challenges facing investors seeking compensation.

Podcast: Opportunities in Chinese equities
China was the first country to be impacted by the coronavirus outbreak, which lead to its economy plummeting. Since then, however, the country has managed to keep outbreaks of the virus under control, and is experiencing a V-shaped recovery with many areas returning to normal.

In this podcast, David Choa CFA, Head of Greater China Equities at BNP Paribas Asset Management talks to European Pensions Editor, Natalie Tuck, about China, its position within the global economy and the potential institutional investor opportunities within Chinese equities.
Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Europe’s pensions challenges
Francesca Fabrizi meets Matti Leppälä, Secretary General and CEO of PensionsEurope, to discuss the key aims and objectives of the association today.