New data platform Forest IQ will help financial institutions eliminate deforestation from their portfolios

• Aligns, connects and curates the best available datasets on how portfolio companies are addressing their links to deforestation at a moment of growing compliance pressure.
• Created by an alliance of leading not-for-profits with deep expertise in data-driven approaches to tackling deforestation.
• Provides open, actionable information on over 2,000 companies – designed in close consultation with major global financial institutions to meet their needs and processes.

The official launch of Forest IQ took place on 1 November 2023. Forest IQ is a powerful new data platform for financial institutions that for the first time brings together aligned, best-in-class, and actionable data on how more than 2,000 major companies are addressing their links to deforestation. 

Forest IQ is both innovative and practical, supporting rapid scanning of portfolios alongside in-depth analysis and engagement. 

Central to Forest IQ are three new core indicators – on exposure, materiality and reported performance. These have been developed in close consultation with major financial institutions including some of the world’s largest and most exposed banks and asset management firms such as Blackrock, BNP Paribas and HSBC. These indicators map transparently to a number of best-in-class datasets, enabling banks and investors to undertake in-depth analysis and more effective engagement with high-risk companies. 

Forest IQ is launching amidst growing policy and compliance pressure on financial institutions to eliminate deforestation from their portfolios in order to achieve their climate and nature goals. The UN’s High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities (HLEG) has set a 2025 target for deforestation-free finance, and the transition guidance of the Glasgow Financial Alliance for Net Zero (GFANZ) identifies tackling deforestation as a top and immediate priority for its members. In addition, new regulations in the EU and other key consumer jurisdictions are setting stringent due diligence requirements for companies on deforestation, and these are under review for extension to the finance sector. 

Niki Mardas, Executive Director of Global Canopy, one of the three leading environmental not-for-profits that have co-created Forest IQ, said:

“Financial institutions that are still ignoring deforestation in their portfolios are pursuing a dangerous strategy – or perhaps are just asleep at the wheel. There is no pathway to net zero or nature goals without rapid action on deforestation, yet our analysis shows that the great majority of financial institutions are still at the starting line. Improved transparency is leading to growing public pressure, and new regulation in key jurisdictions will make it increasingly costly for those that drag their feet as competitors take action.

Forest IQ will make it easier than ever for financial institutions to play their vital part in a rapid marketwide transition away from deforestation. It provides a simple and practical high-level company benchmark on deforestation while retaining all the power and depth of market-leading datasets that provide over 2,400 indicators on deforestation, conversion and human rights abuses. As new datasets emerge, the platform will continue to evolve too. 

We hope that leading financial institutions will see Forest IQ as a powerful new ally on their journey to deforestation-free portfolios. And that laggards will see it as the end of the road for excuses.”

Forest IQ’s indicators and data are open to all in order to drive better action and accountability among key companies and financial institutions on deforestation. Its work is aligned with the Accountability Framework initiative’s guidelines on deforestation, and it will support financial institutions to meet requirements of emerging global reporting frameworks, such as the Taskforce for Nature Related-Financial Disclosures.

Particular attention has been paid to addressing the needs of financial institutions, including through the provision of corporate financial identifiers and an API to embed with their processes and enable faster and more effective portfolio screening. The Forest IQ team is also in discussion with leading ESG Service providers with a view to making the new data available on the key platforms where financial institutions already get their information. 

Peter van der Werf, Head of Engagement, Robeco:

“Robeco has spent considerable time in recent years engaging ESG data providers to find the right deforestation screening data to help us manage deforestation risk in our portfolios. Forest IQ delivers an important contribution to the ESG landscape for investors with their continuous search for actionable data and assessments of companies on their performance in mitigating deforestation loss.”

Vemund Olsen, Senior Analyst, Storebrand:

“Storebrand has been screening our portfolios for deforestation risk since 2020, but the lack of comprehensive, high-quality data on companies’ exposure and management of deforestation risk has been a challenge. Forest IQ will enable us to improve and expand our screening, risk assessment and stewardship, and help us in our efforts to eliminate commodity-driven deforestation from our investment portfolios.”

Puninda Thind, Finance Nature Lead, Climate Champions Team said:

“The climate and nature crises are inextricably linked. Without tackling deforestation, financial institutions cannot deliver on their net-zero targets. Forest IQ is a huge step towards helping financial institutions understand the at-risk companies in their supply chains – moving the sector towards a nature-positive net-zero future.” 

Oliver Cupit, Sustainable Business & Finance Programme Manager at ZSL, said:

“With deforestation worsening again in 2022, we are far off track to meet 2030 deforestation targets and secure a future limited to 1.5 degrees of warming. We need global mobilisation to stop and reverse forest destruction, and financial institutions have a major, critical role to play. Forest IQ makes it simpler than ever before to assess deforestation risks and exposure, enabling financial institutions to take action to eliminate deforestation from their portfolios.” 

Explore Forest IQ

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Notes to Editors: 

1. Forest IQ is a powerful new data platform that for the first time brings together aligned, best-in-class, and actionable data on how more than 2,000 major companies are addressing their links to deforestation. Forest IQ enables financial institutions to easily screen portfolios, engage with the most relevant companies in their portfolios, manage deforestation risks and achieve their climate and nature targets. Forest IQ has been created by an alliance of leading not-for-profits, Global Canopy, the Stockholm Environment Institute (SEI) and ZSL with funding from Norway’s International Climate and Forest Initiative (NICFI). forestiq.org
   
2. Forest IQ has been developed in consultation with 10 global financial institutions including Allianz, AXA, Blackrock, BNP Paribas, Credit Suisse, Fama Investimentos, Federated Hermes, HSBC, Lombard Odier, and Storebrand, and has been tested by more than 50 organisations over the past 10 months. 

3. The breakdown of Forest IQ coverage at launch is as follows: 

• More than 2,000 companies including:
  • 571 highly exposed companies
  • 865 not exposed, but highly invested companies (to support screening)
  • 646 financial institutions
• Over 2,400 data points across 7 datasets: Deforestation Action Tracker, Forest 500, SEI York, Trase, ZSL SPOTT, RSPO, plus additional research by the Forest IQ team.
• Data from CDP Forests will be incorporated into the core metrics in Q4 2023, and new datasets that can improve the metrics further will be added on a rolling basis.

4. Forest IQ will have as a priority to expand its coverage to include ever-more of the most widely-financed companies with the greatest exposure to deforestation, and to keep its data timely.
   
5. To suit the needs of financial institutions we are also exploring a paid-for service that can provide them with more tailored support and ensure the long-term sustainability of the initiative.

Global Canopy

Global Canopy is a data-driven environmental organisation that targets the market forces destroying nature. We provide innovative open-access data, clear metrics, and actionable insights to leading companies, financial institutions, governments and campaigning organisations worldwide to help them make better decisions about nature, forests and people. globalcanopy.org

Stockholm Environment Institute (SEI)

SEI is an international non-profit research and policy organisation that tackles environment and development challenges. We connect science and decision-making to develop solutions for a sustainable future for all. Across our eight centres in Europe, Asia, Africa and the Americas, we engage with policy processes, development action and business practice throughout the world. www.sei.org 

ZSL  

Founded in 1826, ZSL is an international conservation charity, driven by science, working to restore wildlife in the UK and around the world; by protecting critical species, restoring ecosystems, helping people and wildlife live together and inspiring support for nature. Through our leading conservation zoos, London and Whipsnade, we bring people closer to nature and use our expertise to protect wildlife today, while inspiring a lifelong love of animals in the conservationists of tomorrow. Visit www.zsl.org for more information.