Standard Chartered is the latest to promise forest-friendly finance under the Soft Commodities Compact
Large tracts of forest have been cleared to grow palm oil, found in many food and cosmetic products (Pic: Marufish/Flickr)
By Megan Darby
Ten banks have agreed to support an end to deforestation by 2020 with their investment strategies.
Standard Chartered Bank became the latest to adopt the Soft Commodities Compact on Friday, bringing its coverage to 20% of the global agricultural commodity market.
The initiative lines up with efforts by 400 consumer goods companies to phase out rainforest clearance in their supply chains.
Mark Devadason, global head of sustainability at Standard Chartered, said adopting the compact “will help us support our clients to be here for good”.
Other banks to sign up include Deutsche Bank, RBS and BNP Paribas.
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Under the compact, banks commit to work with retail giants to finance interventions that will help to avoid tree-felling.
Brands with buying power of US$3 trillion, including Procter & Gamble and Unilever, are aiming for zero net deforestation within five years.
This means increasing yields of products like palm oil instead of expanding plantations, or switching to more sustainable crops.
“There is a compelling business case for driving deforestation out of our supply chains,” said Jeff Seabright, chief sustainability officer at Unilever.
It is not only good for the company’s reputation but mitigates climate change and secures supplies of raw materials into the future, he added.
“The financial sector plays a critical role in enabling such win-win outcomes.”
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Banks can help by demanding their clients get credible certification to show they are walking the talk, said WWF-UK chief David Nussbaum.
“These 10 banks have set the bar for other financial institutions in terms of tackling deforestation – which is essential to avoid dangerous climate change…
“We call for all banks and investors to apply similarly robust policies across their business.”
Slashing and burning forest to grow palm oil or ranch cattle releases CO2.
Land use, including deforestation, is responsible for just under a quarter of man-made greenhouse gas emissions, according to the UN’s climate science panel.