Global Canopy to assess Race to Zero and GFANZ group on deforestation action

During this year’s London Climate Action Week, leaders across the financial sector came together in recognition that net zero targets cannot be achieved without decisive action on deforestation.

Action on deforestation has been included in the updated Race to Zero leadership criteria, laying out how all members of the Glasgow Financial Alliance for Net Zero (GFANZ) should address deforestation in their financing. 

Global Canopy is therefore increasing the ambition and coverage of our work to understand, support, and track how the finance sector is tackling deforestation, including the practices of financial institutions in Race to Zero and the Glasgow Financial Alliance for Net Zero (GFANZ).

Deforestation, driven by the expansion of commercial agriculture, in particular by cattle (beef and leather) soy, palm oil, timber, pulp and paper accounts for around 11% of the world’s greenhouse gas emissions. It is a key driver of biodiversity loss and climate breakdown and institutions that have made net zero commitments cannot achieve them without addressing deforestation in their portfolios. 

“Ending tropical deforestation is essential to tackling climate change and the finance sector has a critical role to play in driving forward a deforestation-free economy. Assessing the progress of the organisations that have made net zero and forest-related commitments will provide them with a clear framework for action and allow benchmarking against peers and best practice. We’re hoping that others will follow their lead and join these efforts, allowing significant progress to be made in a relatively short space of time”

Niki Mardas, Executive Director, Global Canopy

This new initiative will see us undertake an independent baseline review of current approaches to deforestation for all financial institutions that are in the Race to Zero and GFANZ or have other significant climate commitments. Ahead of COP27, we will share high-level insights on the current state of action and from 2023 onwards, we will undertake an assessment and scoring of this group with regard to their deforestation-related risk exposure as well as progress toward addressing those risks.

Next year’s assessments will follow the Forest 500 assessment methodology. Developed in 2014, Forest 500 has annually assessed 500 companies and financial institutions on their action on deforestation, gathering over 1.5 million data points on private sector deforestation-risk. The methodology is incrementally improved each year.

“Accountability is vital, but it is just one piece of the puzzle. Global Canopy plays a key role in creating the environment for change. With our data, guidance, and contribution to emerging global frameworks like the TNFD, we work with financial institutions to help them commit to deforestation-free portfolios, set strong policies, adapt their operations, and report on progress to encourage others to act”, Niki Mardas. 

Global Canopy and our partners developed the Finance Sector Roadmap, which recommends the key steps for financial institutions to eliminate commodity-driven deforestation, conversion, and associated human rights abuses from their portfolio by 2025.