Government minister urges finance sector action on deforestation

News

25th May 2022

The finance sector has an enormously important role to play in driving global efforts to tackle climate change and protect nature, the UK Minister of State for the Pacific and the International Environment, Lord Zac Goldsmith said this week.

Speaking at a Finance for Biodiversity event, Lord Goldsmith urged the finance sector to use its influence and demonstrate leadership as they have the ability and the power to inspire change.

He added that the deforestation pledges made by companies and financial institutions had been instrumental in winning support from forest-rich countries at the UN COP26 climate talks. And progress on delivering those commitments ahead of COP27 in November would be essential in maintaining trust.

“We need to create an unstoppable momentum, you are in the perfect possible position to make that happen,” he said, urging the major financial investors to sign the commitment to eliminating commodity-driven deforestation and send a very public signal recognising the risks of deforestation.

“A net zero plan for financial institutions that does not address deforestation, or nature, is by definition incomplete,” Lord Goldsmith warned.

“There is no pathway to net zero without nature. There is no solution to climate change that does not involve ramping up our efforts to protect and restore the natural world.”

More than 30 financial institutions, including Aviva, Schroders and the Local Authority Pension Fund Forum signed the letter launched at COP26, which commits them to strive to eradicate commodity-driven deforestation by 2025.

Lord Goldsmith urged the finance sector to take action to deliver on the pledges made at COP26, and to publish their progress, so that they can be held to account.

“I know and we all know that those commitments mean nothing if we fail to make them real,” he said. “And if we’re going to catalyse a ripple effect around the world, which we need, then we need ten times as many financial institutions to sign that commitment and to act on that commitment.”

To support financial institutions to deliver on their pledge, Race to Zero, together with Global Canopy and partners, launched a Finance Sector Roadmap on Eliminating Commodity Driven Deforestation providing advice on how to identify and address deforestation risks, including pointers to some of the tools available.

“We have all the knowledge we need, we have all the tools we need to turn things around,” Lord Goldsmith said.

Lord Goldsmith acknowledged that there was a major challenge in turning around the way that money is spent, and that governments needed to rewrite the rules to ensure harm to nature is recognised as an unbearable financial liability.

“Our long term aim has to be to take nature and those who depend on it into account in all our decisions, and in all our measures of success.”

And he added: “I very much hope that by the time we come to London Climate Action Week, we will be able to tell the world that financial institutions have understood this opportunity and that they are stepping up.”

Financial institutions can sign up to the deforestation commitment letter here.