Driving action on the forest and nature loss linked to trade and finance – Global Canopy’s 2023-2024 Annual Report

Our latest Annual Report looks back at Global Canopy’s success this year in bringing nature to the heart of the climate conversation.

The nature and climate crises are two sides of the same coin. Governments, businesses and finance cannot tackle climate without action on nature – that has been our clarion call. That’s why the final text agreed at climate COP28 in Dubai was so significant – it was the first time tackling deforestation was included, a recognition of its critical role in climate action. In the same year, the EU passed a landmark law to tackle deforestation linked to its imports. The world is waking up to the problem – and Global Canopy’s data, metrics and frameworks are specifically designed to guide the solutions.

Open data

Our tenth annual Forest 500 report, published in February, assessed the 350 companies and 150 financial institutions with the most influence on commodity-driven tropical deforestation. When we began these assessments, just 11% of financial institutions in the Forest 500 had published a deforestation policy. Ten years later that figure has risen to 45%. There’s still a long way to go, but deforestation is now firmly on the business agenda.

2023 Forest 500 data was used to release our second annual human rights briefing, highlighting the inaction of companies and financial institutions. It was one of our most downloaded publications of the year.

We also published our first full Deforestation Action Tracker report – a detailed stocktake of action on deforestation by more than 700 financial institutions that have strong net-zero commitments. Global Canopy’s Executive Director Niki Mardas commented: “The great majority of financial institutions with strong net-zero targets have an inexplicable blind spot on deforestation, conversion and associated human rights abuses.” Data from the two reports has been used by Planet Tracker’s Nature Scorecard as well as Accounting for Sustainability guidance for pension fund chairs and trustees.

New Trase data released for COP28 quantified the greenhouse gas emissions caused by deforestation and peatland degradation linked to countries’ production of key commodities. It showed commodity-driven deforestation and peatland loss annually emits more carbon than the whole German economy.

And in August we shone a powerful spotlight on the deforestation crisis caused by the Bolivian soy sector. Although smaller than the powerhouse Brazil, each tonne it produces is linked to seven times as much deforestation. The findings were presented in-person to farmers’ associations in Santa Cruz and widely disseminated in domestic and international media.

Strong requirements on markets

The last decade has proved that regulation is essential to drive effective action on deforestation. Over the last year we’ve been actively involved advising and lobbying politicians in both the EU and the UK to create effective due diligence laws.

The European Union Deforestation Regulation (EUDR) has the potential to galvanise change across entire markets and sectors. Drawing on our experience with deforestation data, Trase published two policy briefings highlighting lessons for the European Commission (on how best to approach classifying sourcing regions to support enforcement checks) and Member States (on the data available to support assessments of Brazil’s soy exports for compliance with national laws).

In the UK Trase produced research with Global Witness highlighting the devastation from the delay in implementing the Environment Act’s due diligence law. And our evidence to the Environmental Audit Committee calling for regulation of the finance sector formed a key part of their January report on deforestation. Thanks to pressure from us and like-minded NGOs, the Treasury has been tasked with assessing whether the current regulation of the finance sector is adequate.

Enabling action

Global Canopy’s innovative tools and collaborations are a key reason why deforestation has some of the most advanced data, guidance and metrics for companies and investors looking to tackle their nature-related risks and impacts.

We officially launched Forest IQ, bringing together the best available, aligned and actionable data on how more than 2,000 major companies are addressing their links to deforestation. Created by Global Canopy, ZSL and the Stockholm Environment Institute, it was developed in close consultation with financial institutions and specifically designed to meet their needs – sweeping away a key excuse for inaction.

“Forest IQ delivers an important contribution to the ESG landscape for investors with their continuous search for actionable data and assessments of companies on their performance in mitigating deforestation loss.”

Peter van der Werf, Head of Engagement, Robeco

After two years of design and development, the Taskforce on Nature-related Financial Disclosures (TNFD) – an initiative we co-founded – published its Final Recommendations for nature-related risk management and disclosure. We’ve played a vital role in supporting its development. We collaborated with the TNFD to produce its educational resource, TNFD in a Box – a vital asset for inhouse sustainability teams. We piloted the TNFD recommendations with several multinational organisations. And we helped create sector guidance for the food and agriculture, aquaculture and forestry, pulp and paper sectors.

And our ENCORE platform – Global Canopy’s partnership with UNEP-FI and UNEP-WCMC – is frequently highlighted as an essential tool to get started with the TNFD recommendations. It allows organisations to explore their exposure to nature-related risk. There are now over 6,000 registered users. We have grown our international reach, building capacity to use ENCORE among organisations in Colombia, Indonesia, Peru and South Africa.

Road to COP30 in Belem

Home to such a wealth of biodiversity, action from Brazil is crucial if we’re to succeed in tackling the twin climate and nature crises. And in the run-up to COP30 in the Amazon, building on Brazil’s pledges to end deforestation by 2030, Global Canopy is also ramping up its work in Brazil.

We have expanded the size of our team based in Brazil and are customising our tools and guidance for business, finance, government and civil society in Brazil. In August we worked with the Science Panel for the Amazon, and the UN Climate Champions initiative to organise the Finance for Zero Deforestation Amazon workshop, during the Presidents’ Summit in Belém. It galvanised leading financial institutions, scientists, and civil society to collaborate.

We’ve also begun work to transform cattle financing in Brazil. In the coming year, we will bring new baseline assessments and sectoral guidance to the key major global financial institutions and networks with the greatest influence on Brazil’s cattle sector – charting a clear path and setting global expectations for immediate and strategic action on their portfolios.

Read the Annual report