Global investors demand to meet Brazil diplomats over deforestation

by Reuters
Tuesday, 23 June 2020 23:16 GMT

Investment firms sent letters to seven embassies expressing concern Brazil is rolling back environmental protections

(Adds Brazil Foreign Ministry fair comment)

By Jake Spring

BRASILIA, June 23 (Reuters) - A group of 29 global investment firms that manage $3.7 trillion are demanding meetings with Brazilian diplomats around the world to call on right-wing President Jair Bolsonaro's government to stop soaring deforestation in the Amazon rainforest.

The investors, led by Norwegian insurance and pension firm Storebrand Asset Management, sent letters to Brazilian embassies in seven countries, calling for meetings and expressing concern that Brazil is rolling back environmental protections, according to a statement that included a copy of the letter.

"The escalating deforestation in recent years, combined with reports of a dismantling of environmental and human rights policies and enforcement agencies, are creating widespread uncertainty about the conditions for investing in or providing financial services to Brazil," the letter said.

Environmental advocates blame Bolsonaro for weakening protections and causing a surge in deforestation and forest fires since he took office in 2019.

Bolsonaro has argued Brazil is a model of conservation, while calling for more mining and farming in the Amazon region.

Brazil's Foreign Ministry said some embassies had received the letter and that it was examining the issue in coordination with government agencies responsible for environmental policies.

Storebrand Asset Management CEO Jan Erik Saugestad said in an interview that while previous initiatives focused on pressuring Brazilian companies, this new effort is aimed squarely at the government.

The 25 European signatories include Norway's Nordea Asset Management and the Church of England, which has a 2.8 billion pound ($3.5 billion) pension fund. The UK's Legal & General Investment Management (LGIM) is among the largest investors with 1.2 trillion pounds under management.

U.S.-based firms Domini Impact Investment and Pax World Funds have also signed the letter, while Sao Paulo-based Fram Capital is the only Brazilian signatory.

While Europe has traditionally been the most vocal critic of Amazon deforestation, Japan's Sumitomo Mitsui Trust Asset Management signed the letter, and Senior Sustainability Officer Seiji Kawazoe said he expects more Japanese firms to take issue with deforestation in the future.

The letter does not spell out consequences if Brazil's government does not take action, but seven European financial firms told Reuters last week they could divest from Brazil-linked holdings if environmental destruction continues. Many of those firms also signed the letter to embassies.

($1 = 0.8094 pounds) (Reporting by Jake Spring; editing by Richard Pullin and Sam Holmes)

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