“Deforestation isn’t just about trees. Deforestation is ending lives.” Views from the Amazon leader and the asset manager

For London Climate Action Week, Global Canopy brought Txai Suruí, Indigenous activist from Rondônia in the Brazilian Amazon, and Graham Stock from Bluebay Asset Management together for our event, Brazil: from bad to worse since COP26

This article brings you the interactions between Txai and Graham from the event, which took place at Chatham House, in partnership with Greenpeace and the People’s Palace Project. The full recording is available at the bottom of this article.

Txai: “At COP26, Brazil and the world made promises to reverse climate change. But deforestation is advancing on our territories. The Brazilian government is undermining environmental legislation and has expressed a desire to end the demarcation of Indigenous lands.”

“They kill land defenders like Dom Phillips, Bruno Periera and my friend Ari Uru-Eu-Wau-Wau. I am afraid because my mother, my father, my husband and my whole community are receiving death threats for defending the forests like me.”

“Several of our Indigenous territories in the Amazon are islands surrounded by soy fields. The meat and leather industry connects to this tragedy too. I spent most of my childhood in the Uru-eu-wau-wau Indigenous territory. An evil people destroyed parts of this land to create illegal cattle fields. Do you know where this meat and leather is going? Europe, the USA and China.”

“Money doesn’t have value if we don’t have life.”

Txai Suruí

Finance Sector Involvement

Global Canopy’s Forest 500 assesses and ranks the top 350 companies and 150 financial institutions most exposed to deforestation. The 150 financial institutions provide $6.1 trillion dollars in finance to these 350 companies. This capital is driving the destruction of the forests.

Graham: “The reason those financial flows happen is because they are profitable for the institutions, and because they are allowed, the regulatory environment allows those flows to occur. 

If it stops being profitable, banks, asset managers or governments will stop doing it. That’s where transparency comes into play. The more we know about those supply chains, where they’re contaminated by deforestation and other abuses, the more consumers will change their behaviour and it will become less profitable.

Second is the regulatory angle. We need new laws in consumer countries to keep deforestation out of supply chains, because then financial institutions will respond and their due diligence will kick in. It works because we’ve done it before. If someone walks into a bank with £10,000, they’re not allowed to take that deposit. The banks have to go through the due diligence to make sure it comes from a legal source. The same should be true of financing flows to agricultural companies or to supermarkets.”

An invisible war

Under the regime of President Bolsonaro, deforestation in Brazil has risen to a 15 year high, while at the same time budgets for environmental protection have been cut.

Txai: “What the Indigenous peoples are going through right now is an invisible war that nobody talks about. It seems nobody cares about what’s happening to us.

We need Brazil to respect its promise and stop all deforestation. We need the invaders to be removed from our lands. We need protection and justice for our defenders. We need demarcation [of] Indigenous lands. We need a deforestation free supply chain that also respects human rights. By keeping this selfish individualist investment system you are also killing the mother earth.

You can finance our fight too. We are not just defenders of the forest. We are planting and producing sustainable products on our lands. Why are you continuing to support the companies that do illegal things and not support us that are working with carbon, working with sustainable products and working with the real economy?”

Making money a tool for positive change

Graham: “The financial sector is aware of these challenges and thinks the government has a bigger role to play in addressing it; we’re trying to bring it home to them that it’s a financial issue. But it’s easy to throw around huge numbers, that the finance sector represents – hundreds of trillions of dollars. Most of that sits in bank deposits in the country of the bank and then is lent out in that same country. Almost all the rest of it is managed under very tight mandates. There are two groups of people that can make asset managers change what they’re doing. One is the client, and the other is the regulator. 

For us the minimum size of a bond we can buy in our portfolios is $500 million. It’s huge. So we’re not prioritising big producers, it’s just that they’re the only ones trying to borrow enough to make it part of our remit. We don’t have to invest and we don’t if we identify deforestation in supply chains. Someone else might, but we don’t.”

“There are two groups of people that can make asset managers change what they’re doing. One is the client, and the other is the regulator.”

Graham Stock

“That’s why we’ll get more traction talking to Brazilian investors who understand what’s going on on the ground better than foreign investors can. Domestic financial flows from people who understand the domestic situation and can go and visit these projects. That should be the starting point and then that can be scalable if you can show that a Brazilian fund is making returns and doing well.

The great challenge is that these processes move slowly and the crisis is urgent. So we need more pressure. More pressure on governments to tighten up due diligence laws and implement them quickly. Extend them to the financial sector and then pressure in-country to improve policy.”

Txai: “The forest is all. We are all connected to it and we need to understand that. We need to understand that if we don’t do something now, it’s too late. I will be looking for your clients. To talk to pension funds, to consumers. We need to stop the excuses and promises and do.”

Watch the full event below: