Tackling nature loss and deforestation as part of a just transition – key takeaways from London Climate Action Week

The Brazilian presence was strong at London Climate Action Week. Between COP President Ambassador André Aranha Corrêa do Lago, COP chief executive Ana Toni, Indigenous Peoples Minister Sônia Guajajara and Environment Minister Marina Silva, the seven days might have been a warm up ahead of COP30 in Belém. And their collective message was clear: the busy COP30 agenda includes tackling deforestation and nature loss, right at the top.

Darren Mckenzie

Senior communications lead, Global Canopy

“We must move forward with a just transition away from fossil fuels and deforestation.”

Marina Silva, Brazilian Environment Minister

It’s not often that moving away from fossil fuels and deforestation are placed in the same sentence, side by side. But that was the message from the Brazilian delegation. Twin pillars for credible and successful transition.

Transition, in turn, was the London buzzword. The UK government published its consultation for companies and financial institutions to develop and implement transition plans that align with the Paris agreement. And COP chief executive Ana Toni told the State of Climate Politics Forum, a flagship LCAW event, “Transition is inevitable. A just transition is a choice.”

 The reason for that urgency couldn’t be clearer. Despite global pledges to halt and reverse deforestation by 2030, forest loss surged to record highs in 2024. Loss of tropical primary forests alone reached 6.7 million hectares — nearly twice as much as in 2023 and at a rate equivalent to losing 18 football fields of forest every minute.

“As investors, we are increasingly concerned about the financial risks to our investment portfolios posed by tropical deforestation and nature loss.”

From the Belém Investor Statement on Rainforests

Global Canopy was one of the founding partners behind the Belém Investor Statement on Rainforests which was launched at an LCAW event at London Zoo. It demands government action to keep global promises to halt and reverse deforestation and forest degradation by 2030.

It calls on governments to collaborate by aligning best practices and providing financial and technical support to countries that produce forest risk commodities. It also demands they adopt harmonised disclosure rules across jurisdictions. But it also promises investor action on engagement, disclosure and support for regulation.

Global Canopy also released a major new report, jointly produced with the Taskforce on Nature-Related Financial Disclosures (TNFD) and the University of Oxford, highlighting that damaging nature triggers and exacerbates financial damage to businesses and the economy. The economic costs of nature loss are not a problem to think about decades in the future. They’re here now. 

Based on a review of more than 600 pieces of existing research and interviews, the report highlights strong evidence that nature degradation triggers and worsens disasters, such as floods, wildfire and drought, and other forms of damage to business, and is therefore critically linked to economic loss.

Report author, Global Canopy’s Technical Nature-related finance lead Dr Natacha Postel-Vinay stated: “The effects of damage to nature can ultimately range from price rises for consumers, to hikes in operating costs and capital expenditure for businesses, insurers and reinsurers paying out enormous sums on claims, hours of lost staff productivity through physical displacement, and more.” 

And that means financial institutions have to take heed. “Investors who think they can simply diversify away from this risk are bringing old paradigms to a new problem,” said Global Canopy Executive Director Niki Mardas. “The snowballing impacts of nature risks are already affecting the insurance sector, leading to the threat of higher premiums and a growing arc of uninsurability. For companies, financial institutions, regulators and fiscal policymakers alike, the most effective way to mitigate these risks is to act now – to shift financial flows away from activities that harm nature, toward those that can maintain, restore and regenerate it.”

In London it was evident that some forward-thinking investors are looking beyond geo-political headwinds and instead planning to address these fundamental economic and scientific risks. They are focusing on tools like Forest IQ and the Deforestation-free transition pathway (DEFT Pathway) to help them engage with companies on deforestation. They are using ENCORE to assess their nature-related impacts and dependencies.

But nature’s march up the climate agenda cannot be a flash in the pan. COP30 chief executive Ana Toni said “COP30 must result for nature” because nature is one of our greatest allies in the fight against climate change. To come anywhere close to our Paris targets, nature loss and deforestation matter. Ruth Davis – the UK’s Special Representative for Nature was clear. “My Brazilian colleagues do get this. My challenge is that it needs to happen at every COP for ever after.”