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Beta version of Forest IQ launches today

News / 13 Dec 2022

New database will provide a market-leading dataset to support financial institutions to tackle their exposure to deforestation.

Forest IQ is a new database that will provide financial institutions with market-leading data about corporate performance on deforestation, conversion of natural ecosystems and associated human rights abuses. This will enable financial institutions to identify risks and opportunities to help them to deliver deforestation free portfolios by 2025.

There is no pathway to a net zero world that does not address deforestation. Accounting for around 11% of global greenhouse gas emissions annually, tackling deforestation is fundamental to addressing the climate crisis.

Developed in partnership between Global Canopy, Neural Alpha, the Stockholm Environment Institute and The Zoological Society of London (ZSL), the database has been developed with a working group of 10 financial institutions, including banks and asset managers.

Forest IQ logo

Forest IQ is a high quality source of data for nature, which enables investors to understand and act on their exposure to the companies driving tropical deforestation.

Investors are highly exposed to these systemic risks through their investments in companies in the key agricultural supply chains for cattle, soy, palm oil, timber, pulp and paper, and rubber, which are the main drivers of tropical deforestation.

Forest IQ brings together high quality datasets on those companies most exposed to these commodity supply chains driving deforestation throughout the value chain. This data is from Global Canopy’s Forest 500, ZSL’s SPOTT, FAO and certification schemes such as RSPO. It is combined to generate core metrics, aligned to the Accountability Framework’s common methodology, for each company on deforestation exposure, materiality and policy commitments and reported implementation. These core metrics allow an investor to compare companies both upstream and downstream, using a standard set of indicators.

With feedback from the working group, and as data improves on these issues more datasets will be added to strengthen the metrics and increase company coverage of the database.

Forest IQ’s comparable metrics enable investors to better understand their cross-portfolio deforestation exposure and act accordingly. It supports activities such as:

  • Portfolio creation, screening and benchmarking
  • Engagement and stewardship
  • Due diligence
  • Policy development and implementation
  • Exclusion screening

There is growing recognition of the huge business risks from exposure to deforestation, conversion of natural ecosystems and associated human rights issues. This is reflected in the tightening regulatory environment, with deforestation regulations being developed in major importer markets such as the EU, UK, and the USA.

Investors need to act now to address these risks to their investments and position themselves to be able to comply with new legislation on deforestation. Forest IQ provides the high quality and comparable data and metrics needed to do this.

Forest IQ is being launched in its beta phase for testing by a group of financial institutions, and will be publicly launched in April 2023. If you are interested in learning more and getting updates on the development during the beta phase, please get in touch.

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