UK general election: Deforestation and nature loss must be a priority for the new government

On the fifth of July, there will be a UK government with a new mandate. It is essential that whoever takes power uses that mandate to show real leadership on the twin crises of climate change and nature loss.

By Helen Bellfield

Deputy Executive Director, Global Canopy

Each year the World Economic Forum releases the Global Risks Report – detailing the biggest threats to the world over the next decade. Environmental risks dominate – the top three being extreme weather, critical change to earth systems, and biodiversity loss and ecosystem collapse. Any government has a responsibility to combat those risks.

Stopping deforestation is a vital part of this. Deforestation is responsible for 11% of global greenhouse gas emissions. Protecting and restoring forests are critical climate solutions. Yet in 2023 the world lost 3.7 million hectares of primary tropical forest – the equivalent of losing 10 football pitches a minute.

And the UK is an important part of the global deforestation problem. We import forest risk commodities – cattle products, cocoa, palm oil, coffee and soy – that drive the destruction through the expansion of agricultural land. The latest Trase analysis shows from 2019 to 2021, the UK’s average deforestation exposure from the trade in these commodities was 15,200 hectares, although this is likely to be an underestimate as it excludes more processed products. Moreover, a 2021 study found UK financial institutions provided £40 billion in direct finance and £198 billion in indirect finance to companies at risk of causing deforestation.

So action on deforestation must be on the new government’s agenda. It would be a popular choice, too. Polling released after COP26 found nine out of ten people support reducing deforestation and protecting forests. A year later, Make My Money Matter polling found eight out of ten pension holders would be unhappy to discover their savings were funding deforestation. Tackling the UK’s links to tropical deforestation is not just essential for the planet. It’s what the people want.

Fulfilling the promises of the Environment Act

A critical first step is creating detailed and effective due diligence obligations for companies around deforestation. These were promised in the 2021 UK Environment Act. But turning the Act into company action requires secondary legislation to go through Parliament, and that secondary legislation has never been laid. Research by Trase, released with Global Witness in November, found that during the delay on the secondary legislation, beef, soy and palm oil imports to the UK were linked to the destruction of an area of tropical forest almost twice the size of Paris.

So the new government must ensure those secondary regulations are laid quickly and are ambitious in coverage, scope and demands on companies and enforcement powers. Key elements that are not yet set out include the due diligence obligations on the information that companies must collect, the criteria they must apply to assess risk, the ways in which they can mitigate risks, and the content and form of the reporting requirements. To be effective, these standards must be stringent, and where relevant aligned with the leading market practices emerging in response to the EU Deforestation Regulation.

There must be capacity and powers to implement the law too. That means effective resourcing for enforcement, including building the capacity of the enforcement authority to interpret and assess company reports and due diligence systems. Meaningful penalties must be levied against companies that fall short.

In the not-too-distant future, the government needs to move further to regulate the finance sector as well. Lenders and investors have the power to drive change through the choice of business activities that they fund and how they engage with companies.

The Treasury has been tasked with a review to assess whether the current regulation of the finance sector is adequate. Previous independent reviews have told us it isn’t. By regulating the finance sector, the government would create a truly world-leading law on deforestation.

Showing global leadership

In their manifestos, both the Conservatives and Labour talk about nature and its restoration. The Conservatives promise to introduce the secondary legislation needed to make a UK deforestation law. Labour promises international leadership in the climate and nature space. We need more from both.

It’s a year of two major environmental conferences – COP16 – the United Nations Biodiversity Conference and then COP29, focused on the climate crisis. Both offer a real opportunity for the incoming UK government to show leadership on the world stage.

By COP16, countries are expected to have released updated national biodiversity strategies and action plans (NBSAPs)- a plan detailing how national governments will reach a range of goals and targets. Some already have – the UK hasn’t. That gives the incoming government an opportunity to show that nature is a priority.

Some have called COP29 the finance COP, with transition finance the focus of discussions. As a global financial centre, the UK is well-placed to keep the links between deforestation and finance on the international agenda, including pushing for stronger best practice and sectoral alignment on deforestation-free finance.

In January, Philip Dunne – then chair of the Environmental Audit Committee – said the UK government was showing “little sense of urgency about getting a rapid grip on the problem of deforestation.” Post-election, that must change. At COP26 in Glasgow, the UK showed real leadership, garnering the signatures of over 100 countries to agree to halt and reverse deforestation by 2030. We need that energy again from the future UK government, to ensure that the agreement is remembered for its positive impact, and not as another missed deadline.