Setting an effective policy and managing risk

Strong deforestation, conversion, and human rights policies address deforestation and conversion regardless of legality. Aside from reducing the regulatory risk posed by illegal deforestation, addressing only illegal deforestation does not remove the systemic, financial or reputational risks deforestation and conversion pose to the finance sector.

In many countries, laws to protect forests and other natural ecosystems are insufficient – meaning large swathes of forest can still be deforested. Additionally, even where laws exist, their enforcement is often inadequate, meaning that illegal deforestation can still be occurring in supply chains or financed projects, and the rights of Indigenous peoples and local communities are not protected.

To reduce these risks, financial institutions need to include both illegal and legal deforestation in their deforestation, conversion and associated human rights risk policies.

Governments can reverse or dilute existing laws to protect forests, so that illegal deforestation today may become legal in the future. Legislation and financier policies that only target ‘illegal’ deforestation can run the risk of accelerating deforestation rates by providing economic incentives for deregulation in producer countries. This can increase regulatory, financial and reputational risks for companies and those financing them.

Requiring and supporting clients/holdings to be free from all forms of deforestation can actually make the implementation of their commitments easier for the clients/holdings. Within forest-risk commodity supply chains, it is easier for clients/holdings to identify if the forest-risk soft commodities they are producing, processing, procuring or financing are driving deforestation at all – it is harder to establish if deforestation is taking place and then go on to define whether it is legally compliant or not. This is due in part to the complexity (and often overlapping or contradictory nature) of legislation at the national, sub-national, and local levels and a lack of availability of legal compliance data.

This statement should:

• cover all new and existing financing activities, including direct and indirect financing
• have an ambitious target date to eliminate deforestation, conversion, and associated human rights abuses from your portfolio – as soon as possible, or at the latest within four years of beginning this Roadmap.

This policy should commit your organisation to only finance clients/holdings and projects that are operating in line with the standards of your policy, and to engage with any non-compliant clients/holdings to bring them into compliance within a set time frame. This policy should explicitly include both existing, potential, and new clients/holdings or projects.

In addition to the core policy elements listed above, this policy should provide sufficient detail and specificity of its scope relative to your organization’s overall portfolio, key requirements for clients/holdings, and key means of operationalizing the policy. These details may be specified in the policy commitment itself or in accompanying public documents.

The policy should be clear, specific, and transparent, in line with the Accountability Framework, including:

• being fully transparent and publicly available
• require clients/holdings operating at all stages of supply chains to ensure that the forest-risk commodities they produce, process, procure or finance have not contributed to deforestation or the conversion of natural ecosystems, or associated human rights abuses as defined by the Accountability Framework initiative
• have clear time-bound target dates
  • The Accountability Framework recommends a target date of no later than 2025 to eliminate deforestation and conversion from supply chains, in order to reflect the urgency of acting on biodiversity and climate crises. This recommendation also aligns with standards set by several other key initiatives, including SBTi-FLAG and Race to Zero.
• Have clear cut-off dates aligned with local regulations and global initiatives 
  • The Accountability Framework initiative recommends that cut-off dates for deforestation should be no later than 2020, and notes that this date aligns with global goals to halt deforestation as well as with dates used in regulatory and voluntary mechanisms. 
  • Financial institutions should recommend commitments to deforestation cut-off dates aligned with relevant local regulations where these mandate earlier dates. For example, the Conduct Adjustment Agreement (TAC) on Meat used by companies operating in the Amazon recommends a cut-off date of 22 July 2008.
  • Policies should specify the scope of the cut-off date, ensuring it applies to all relevant sourcing and further that it applies to both legal and illegal deforestation and conversion. This distinction is important for guiding internal decisions and company engagement.

In line with best practice, these policies should apply to all clients/holdings in your portfolio, including:

• Producers (including smallholders)
• Processors
• Traders
• Manufacturers
• Retailers
• Financial institutions/financiers
• Landowners, investors, speculators, or investment funds (whether or not actively engaged in commodity production)
• All financial services and products provided (for the banking sector this includes lending, underwriting and advisory services)
• All asset classes (including equities, bond holdings, cash equivalents, commodities, and futures)
• All financial transactions and deals, regardless of their value
• All clients/holdings financed, regardless of their size

The policy should identify the primary mechanisms by which your organisation intends to meet its commitments on commodity-linked deforestation, conversion, and associated human rights abuses, which typically include (but are not necessarily limited to):

• Requirements for clients/holding: requirements for clients/holdings are a primary way that your organisation will turn its policy into a practical implementation and monitoring mechanism that can be applied across your entire portfolio. Specific recommendations for what to include in these requirements are provided within Recommended action 2, below. These requirements can be included in a separate document if appropriate, but they should be referenced from your organisation’s policy.
• Engagement: engage with and support your clients/holdings to achieve the standards laid out in your policy and your requirements, and work with them to remediate any past cases of deforestation, conversion, or human rights abuses, as opposed to immediately withdrawing finance from clients/holdings who are not yet compliant with the policy requirements. Work with clients to develop ambitious alternative targets where these may have been missed.
• Redirection of financing if needed: include the withdrawal of financing as an available course of action where appropriate and necessary to prevent new environmental or human rights harms or in the event that clients/holdings do not address identified issues within a reasonable time.
• Reporting: commit to publicly report on the progress your organisation is making in implementing your policy and achieving the stated goals and targets.
• Grievance mechanism: provide a publicly accessible grievance mechanism on your organisation’s website, to enable rights-holders and external stakeholders, including NGOs and customers, to report concerns and grievances to your organisation.This can be used to strengthen your risk assessment and due diligence processes further in Phase 3.

In addition to the core policy elements listed above, this policy should provide sufficient detail and specificity of its scope relative to your organisation’s exposure to deforestation, conversion and associated human rights abuse risks in Brazil, key requirements for clients/holdings, and key means of operationalising the policy. These details may be specified in the policy commitment itself or in accompanying public documents.

This statement should:

• cover all new and existing financing activities, including direct and indirect financing
• Include clear contractual requirements that link financing to explicit commitments to restoring illegally deforested areas and implementing sustainable management systems in line with regulatory requirements
• have an ambitious target date to eliminate deforestation, conversion, and associated human rights abuses from your portfolio – as soon as possible at the latest within four years of beginning this Roadmap.

The policy should be clear, specific, and transparent, in line with the Accountability Framework, including: 

• being fully transparent and publicly available
• require clients/holdings operating at all stages of supply chains to ensure that the forest-risk commodities they produce, process, procure or finance have not contributed to deforestation or the conversion of natural ecosystems, or associated human rights abuses as defined by the Accountability Framework initiative
• have clear time-bound target dates.
  • The Accountability Framework recommends a target date of no later than 2025 to eliminate deforestation and conversion from supply chains, in order to reflect the urgency of acting on biodiversity and climate crises. This recommendation also aligns with standards set by several other key initiatives, including SBTi-FLAG and Race to Zero.
• Ensure that your target date is consistent with specific commitments within the Brazilian context. The country has set the goal of halting deforestation and conversion across all Brazilian biomes by 2030.

The Brazilian Forest Code rural properties and their natural vegetation, stipulating that landowners must preserve areas of native vegetation known as ‘Legal Reserves’ and ‘Permanent Preservation Areas’. While the law allows for legal deforestation within certain limits, it requires that a specific percentage of the property be dedicated to conservation. This percentage differs across regions: 80% of the land must remain forested in the Amazon biome (which can drop to 50% in some circumstances), 35% in the Cerrado within the Legal Amazon, and 20% in other areas and biomes. These protected zones are essential for providing ecosystem services, although their fragmented and disconnected nature often hinders the full realisation of these benefits.

Brazil also has a multitude of legal frameworks focused on Human Rights, Indigenous lands and Quilombola territories. However, despite these legal protections, deforestation frequently occurs in these territories, putting the rights and livelihoods of Indigenous and Quilombola peoples, and traditional communities, at risk. Preventing all deforestation in supply chains also reduces the risks of associated human rights abuses – and further contravention of regulation.

Strong deforestation, conversion, and human rights policies should address deforestation and conversion regardless of legality. Aside from reducing the regulatory risk posed by illegal deforestation, addressing only illegal deforestation does not remove the systemic, financial or reputational risks deforestation and conversion pose to the finance sector.

Mechanisms for implementation

The policy should identify the primary mechanisms by which your organisation intends to meet its commitments on commodity-linked deforestation, conversion, and associated human rights abuses, which typically include (but are not necessarily limited to):

• Requirements for clients/holdings: requirements for clients/holdings are a primary way that your organisation will turn its policy into a practical implementation and monitoring mechanism that can be applied across your entire portfolio. Specific recommendations for what to include in these requirements are provided within Recommended action 2, below. These requirements can be included in a separate document if appropriate, but they should be referenced from your organisation’s policy.
• Engagement: engage with and support your clients/holdings to achieve the standards laid out in your policy and your requirements, and work with them to remediate any past cases of deforestation, conversion, or human rights abuses, as opposed to immediately withdrawing finance from clients/holdings who are not yet compliant with the policy requirements. Work with clients to develop ambitious alternative targets where these may have been missed.
• Redirection of financing if needed: include the withdrawal of financing as an available course of action where appropriate and necessary to prevent new environmental or human rights harms or in the event that clients/holdings do not address identified issues within a reasonable time  
• Reporting: commit to publicly report on the progress your organisation is making in implementing your policy and achieving the stated goals and targets
• Grievance mechanism: provide a publicly accessible grievance mechanism on your organisation’s website, to enable rights-holders and external stakeholders, including NGOs and customers, to report concerns and grievances to your organisation. This should also be accessible by Indigenous Peoples, local communities, and smallholders, including through mobile-friendly platforms and/or technical support. The Brazilian government’s public mechanism for human rights violations can also be linked to on your organisation’s website(s). This can be used to strengthen your risk assessment and due diligence processes further in Phase 3.

Publicly publishing your policy will send a clear statement to your clients/holdings that you are aware of the importance of addressing deforestation, conversion, and associated human rights abuse risk, and enable external stakeholders to hold you accountable for the progress towards your policy.

By doing so publicly, you can drive change beyond your organisation, and across the sector. This can include acknowledging that deforestation, conversion, and associated human rights abuses pose regulatory, financial, and reputational risks on a client/holding level and also at a systemic level.

This will help to ensure that the implementation of your policy is not hindered by pre-existing internal standards or expectations.

If any pre-existing policies conflict with your deforestation, conversion, and associated human rights abuse policy, look to update these pre-existing policies to avoid conflicting mandates or incentives to your organisation’s personnel and partners. The goal is to ensure that the policy on deforestation, conversion, and associated human rights risks is fully incorporated into the business practices of each relevant division or function within your organisation.

This can also include adding clauses into new and re-financing agreements, which incorporate these policy requirements, and enable your organisation to interrupt or cancel financing if deforestation, conversion, or associated human rights abuses persist.

For example, banks should ideally include these policy requirements within covenants for new finance and re-financing, while asset managers should include the requirements within their investment processes and policies.

Increasing nature- and people-positive financing can be done through creating sustainable finance products such as investment funds and green or social bonds, which have specific requirements for clients/holdings on deforestation, conversion, and associated human rights abuses.

These can be used as part of the transition to deforestation, conversion, and associated human rights abuse-free portfolios by 2025 by implementing interim target dates – for instance, to be considered for the sustainable finance product, the client/holding must be free from deforestation, conversion, and associated human rights risks by 2023.

Increasing nature- and people-positive financing can be done through creating sustainable finance products such as investment funds and green or social bonds, which have specific requirements for clients/holdings on deforestation, conversion, and associated human rights abuses.

This can look like a variety of products, for example the issuance of green bonds linked to zero-deforestation targets, offering more favourable credit conditions to producers implementing sustainable deforestation-free practices, or developed products to support regenerative practices in cattle ranching which are aligned with commitments to net-zero emissions and environmental restoration.

The policy scope should address, at a minimum, the most globally important forest-risk soft commodities: soy, beef, leather, palm oil, timber, and pulp and paper. Extending your policy to all forest-risk commodities, sectors, and industries is essential in achieving financial portfolios that are free from deforestation, conversion, and associated human rights abuses. This can include other forest-risk commodities such as:

• Rubber
• Cocoa
• Coffee

And to other sectors and industries including:

• Extractive industries, e.g. mining for oil, gas, coal, heavy metals
• Infrastructure projects and companies

Extending your policy to all forest-risk commodities, sectors, and industries is important for addressing systemic risk from deforestation, conversion, and associated human rights abuses.

For the above industries and sectors, it is vital that the indirect or knock-on impacts of these projects are considered within any risk and impact assessments. The data available for these industries/sectors is not yet available at a large-scale, but as this data becomes available this Roadmap will be updated to reflect these datasets and tools.

While this Roadmap does provide high-level guidance on achieving deforestation, conversion, and associated human rights abuse-free portfolios, it links to datasets, tools, and additional guidance specific to palm oil, soy, beef, leather, timber, and pulp and paper. The phases, steps, and recommended actions may be applicable to other commodities, sectors, and industries. This Roadmap will be followed by sector-specific and separate actor-specific guidance pieces, which will provide further details.

• Key elements of the strongest deforestation policies for financial institutions can be found in the appendices (below).
• The Accountability Framework’s user guide on ‘How to write a strong ethical supply chain policy’ is targeted at companies, but is a useful resource for financial institutions as it provides detail on the key elements of what makes a strong deforestation policy.
• The Accountability Framework provides an explanation and justification for selecting a 2025 target date to eliminate deforestation and conversion from supply chains, and thus financial portfolios.
• The WWF Palm Oil scorecard outlines policy expectations for companies sourcing palm oil as well as institutions financing these organisations.
• The UK Soy Manifesto outlines core policy expectations for its members related to deforestation and associated human rights abuses in soy supply chains. 
• The Consumer Goods Forums Guidance for Forest Positive Suppliers of Cattle derived Products (Meatpackers in Brazil) outlines details clear proposed requirements for setting strong policies on cattle derived products and goes further to highlight how companies can make Forest Positive Commitments for cattle derived products. 
• The FSC Wood sourcing policy guide outlines key recommendations for companies aiming to set a sustainable sourcing policy.
• The World Cocoa Foundation’s Cocoa and Forests initiative details eight core commitments for cocoa companies.

• Recommendations for investors on deforestation and conversion risks related to cattle ranching and beef supply chains in Latin America  (Page 13) outlines key recommendations for investors operating in Latin America. It provides guidance on developing and implementing zero-deforestation and zero-conversion policies to help investors mitigate environmental risks associated with deforestation and land conversion.
• DCF Supply Chain Visions and Principles from WWF outlines the principles and actions that companies and investors can take to ensure sustainability in their supply chains.
• The Common Cut-off Dates from the Accountability Framework outlines common cut-off dates used in Brazilian cattle supply chains, helping organisations align their sustainability policies to avoid deforestation and conversion. These dates are critical for tracking and verifying the environmental impact of suppliers. 
• Strengthening sustainability commitments in the Brazilian beef sector focuses on eliminating deforestation in the Amazon through a value-chain approach and corporate policies. It emphasises collaborative efforts among various stakeholders to create sustainable practices in the beef sector, ensuring that supply chains contribute to deforestation-free practices.
• Policy Guide from Deforestation-Free Call to Action for Leather provides guidance for developing or reviewing deforestation- and conversion-free sourcing policy and commitments from leather companies.

The requirements for clients/holdings should include at least the following elements:

• Set and publish deforestation-free and conversion-free commitments that align with the Accountability Framework and include a cut-off date; specific guidance for companies is available here
• Set and publish commitments to respect internationally recognised human rights in alignment with the UN Guiding Principles and the Accountability Framework, and explicitly:
  • set commitments to respect the rights of Indigenous peoples and local communities, including to refrain from land use and acquisition and development until any existing land conflicts have been adequately addressed, remedied, and compensated in consultation with affected rights-holders
  • set commitments to secure the Free, Prior and Informed Consent (FPIC) before any new land acquisitions, developments, or expansions, and to respect the decisions of rights-holders, including those which withhold consent
  • set commitments to protect the labour rights of workers in their own operations and supply chains, which also applies to their direct and indirect suppliers
  • set commitments to respect, protect, and guarantee the rights of forest, land, and human rights defenders, in line with the Zero Tolerance Initiative, and ‘Conduct operations consistent with the Declaration on the Right and Responsibility of Individuals, Groups and Organs of Society to Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms, otherwise known as the “Declaration on Human Rights Defenders”‘
• Set and publish commitments on traceability, which apply to all tiers of suppliers (including indirect suppliers) and which are sufficient to know and control the deforestation, conversion, and human rights impacts of materials in the supply chain
• Cease efforts to acquire, gain control of, or develop land or resources (and cease any support for such efforts via sourcing, financing, or other means) where there is any unresolved or unremediated land conflict or rights violation
  • For those with operations with open cases/grievances on deforestation, conversion, and associated human rights abuses in their own operations and supply chains/financed projects, ensure these are ceased until the harms have been fully remediated
• Have publicly available grievance mechanisms through which external stakeholders can raise concerns/grievances on deforestation, conversion, and associated human rights abuse risks throughout their operations, supply chains, and financed projects as a minimum
• Provide remediation for any environmental or social harms caused
• Establish processes to engage with and manage non-compliant suppliers to prevent future non-compliance and eliminate deforestation, conversion, and associated human rights abuses from supply chains and portfolios
• Establish processes to monitor and verify their operations/suppliers/financed projects or companies for compliance
• Commit to disclose their progress towards their commitments, and their exposure to deforestation, at least annually, using commonly-agreed metrics and methods such as those of the Accountability Framework, the Global Reporting Initiative, and CDP Forests.

Once you have set your policy, these requirements can also be considered as ‘expectations’ your organisation can communicate to existing, potential, and new clients/holdings in either one-on-one or collective engagement settings in Phase 3.

Signatories to the Financial Sector Commitment on Eliminating Commodity-driven Deforestation have developed shared investor expectations that are publicly available to inform and support other financial institutions in engaging and setting expectations with portfolio holdings. The expectations are grounded in the commitments made by signatories, informed by relevant science and best practices, and are expected to evolve over time. The investor expectations for companies was published in 2022, and the first-ever investor expectations for commercial and investment banks was published in 2024. These expectations are publicly available to inform and support other financial institutions in engaging and setting expectations with these respective types of holdings.

In addition to the above, the requirements for clients/holdings in Brazilian cattle supply chains should include at least the following elements:

• Ensure that all traditional communities, including Indigenous and Quilombola peoples, have legal recognition of their land rights, both under Brazilian law and international agreements (e.g., the UN Declaration on the Rights of Indigenous Peoples). 
  • You can use references such as the Universal Declaration of Indigenous People or Article 231 of the Federal Constitution of Brazil (recognition, demarcation, use, and management of Indigenous lands).
• Ensure your policy includes requirements such as fair wages, safe working environments, and equal opportunities for all workers. The Brazilian Labor Code (CLT) establishes the country’s labour rights framework, guaranteeing protections for workers, including fair wages, health and safety, and regulated working hours.
• Ensure that your policy promotes goals for advancing gender equity, as this is a critical requirement for fostering inclusive and sustainable development. Brazilian law ensures equal pay for women and men who perform the same work or work of equal value with additional measures that must be observed by organisations. Including mandated wage transparency, and it also introduces more severe legal and monetary penalties for non-compliance.
• Prioritise the inclusion of consultation with Indigenous peoples and local communities, in alignment with the safeguards of ILO Convention 169 as well as Brazilian legal frameworks including:
  • Federal Constitution of 1988:
    • Article 231: Recognises the original land rights of Indigenous peoples over territories they have traditionally occupied, guaranteeing exclusive use of the resources of the soil, rivers, and lakes within these lands.
    • Article 232: Ensures Indigenous peoples’ right to legal representation to defend their rights and interests.
    • Articles 215 and 216: Protect Brazil’s cultural diversity, including the rights of traditional communities to preserve their cultural practices and way of life.
  • Decree No. 5,051/2004 and Decree No. 10,088/2019: These decrees regulate ILO Convention 169 in Brazil, reaffirming the obligation to comply with its safeguards, including Free, Prior, and Informed Consent (FPIC).
  • Law No. 9,985/2000 – National System of Conservation Units (SNUC):
    • Articles 5 and 11 recognize the rights of traditional communities in conservation areas, requiring consultation and consideration in the creation, expansion, or management of conservation units.
  • Decree No. 6,040/2007 – National Policy for the Sustainable Development of Traditional Peoples and Communities (PNPCT):
    • Establishes guidelines for promoting and protecting the rights of traditional communities, emphasizing respect for their ways of life and their right to participate in decision-making processes that affect them.
    • Reinforces the need for consultations as part of public policies targeting traditional communities.
• Use robust tools as monitoring or traceability mechanisms for tracking both direct and indirect suppliers (from breeding, rearing and fattening stages of the supply chain) as part of the implementation of zero-gross deforestation commitments, leveraging the Rural Environmental Registry (CAR), as part of achieving full traceability of beef and/or leather.
  • Incorporate specific mechanisms to encourage the use of geospatial technology (e.g. MapBiomas or PRODES) for continuous monitoring of compliance with the requirements within the cattle production chain.
  • It is important to highlight that traceability and monitoring are distinct concepts. Traceability refers to the ability to track a product throughout its entire supply chain, from the point of origin to the final consumer, including all events, farms and suppliers involved. Monitoring, in contrast, typically involves the standalone assessment of a producer’s performance. For instance, the review of a supplier’s Rural Environmental Registry (CAR) and identification documents (such as CNPJ or CPF) constitutes monitoring. However, this approach alone can be insufficient to fully evaluate compliance with no-deforestation and conversion commitments, as it does not provide visibility into the complete journey of the product through the supply chain.
• Include requirements that promote the capacity-building of small-scale cattle producers, supporting rural credit programs for sustainable practices and traceability.
• Strengthen mechanisms for mediating and compensating environmental and social damages, in alignment with the National Environmental Policy and the Brazilian Forest Code.

Notifying existing and prospective clients/holdings of your organisation’s policy and the expectations outlined above is a critical step in driving change through your financing activities. For new clients/holdings, or when financing agreements are being renewed, any further progress needed (e.g. reaching 100% of commodities traced back to farm) should be clearly defined within any financing agreement(s).

You should also communicate that existing, prospective, and future clients/holdings are required to either:

• already be compliant with your organisation’s policy in advance of receiving financial products or services; or
• set and publish a commitment and time-bound plan to become compliant with all requirements of your organisation’s policy within a pre-agreed time frame of no later than 2025, or four years after beginning the Roadmap.

Time-bound plans should:

• identify key steps the client/holding will take to address their exposure to deforestation, conversion, and associated human rights risks, with annual milestones
• combine action both within and beyond supply chains
• include actions to manage their supply chain, engagement with suppliers, monitoring for compliance, engaging in landscapes and transparent reporting 
• include Key Performance Indicators (KPIs) which the client/holding will report on to provide transparency and demonstrate progress.

This is something which your organisation can develop in collaboration with your clients/holdings, regardless of their size or financial value, as part of your efforts to support them to have soft-commodity supply chains that are free from deforestation, conversion, and associated human-rights abuses by 2025, or within four years of beginning the Roadmap. In addition, you can work with your clients/holdings to identify key areas where your organisation can support the client/holding to improve their efforts to address their exposure to deforestation, conversion and human rights risk. You should ensure clients/holdings’ commitments and plans align with the Accountability Framework.

Examples of action plans, and companies developing and reporting against these, can be seen in the Commodity Roadmaps published by the Consumer Goods Forum Forest Positive Coalition.

• Good Practices Manual for Environmental Sustainability in Agribusiness from Rabobank and WWF, serves as a guide for investors to set requirements in line with Brazilian and Agricultural environmental legislation and banking regulations. It highlights key factors to consider when evaluating a property, such as adherence to environmental protection laws, proper land registration, and sustainable management practices. 
• Assessing compliance with the Forest Code: A practical guide is a resource designed to help investors set requirements in line with Forest Code and evaluate whether landowners and producers are adhering to Brazil’s legislation. The Forest Code outlines the legal requirements for land use and environmental protection, including maintaining permanent preservation areas and legal forest reserves on private properties.
• The Beef on Track protocol is an initiative coordinated by Imaflora and led by the Federal Prosecutor’s Office in the states of the Legal Amazon which aims to combat deforestation and human rights violations linked to the cattle supply chain. The protocol involves a set of commitments made by slaughterhouses operating in the region, as well as actions that can be taken by companies, cattle ranchers, and other stakeholders to ensure that cattle raised for meat and leather production do not originate from rural properties with socio-environmental violations and deforestation. It can also guide investors operating in Brazil’s cattle supply chains on what requirements to include in their policies. Additionally, it offers a voluntary protocol for the Cerrado biome.

This threshold is used to determine whether clients/holdings have a high enough exposure to deforestation, conversion, or associated human rights risk to be prioritised for engagement in Phase 3. These could be clients/holdings which are well-placed to drive greater change across the industries in which they operate. Examples of criteria might include:

• those categorised as high- or medium-risk during the in-depth deforestation-risk and associated human rights risk assessment, including any client/holding sourcing from high-risk countries and regions
• clients/holdings which produce, use, or finance large volumes of forest-risk commodities; the threshold to determine this will vary by commodity and geography
• clients/holdings to which your organisation has the greatest financial exposure
• a combination of these criteria.

It is important to communicate this threshold for engagement with clients/holdings in advance, before annual due diligence processes take place in Phase 3.

Once you have communicated your requirements for all clients/holdings regarding deforestation, conversion, and associated human rights, it is important to set a threshold of non-compliance with the requirements of the policy which would qualify clients/holdings for engagement. This is a key threshold which in Phase 3 is implemented within the annual screening and monitoring process to determine whether clients/holdings are non-compliant with your policy requirements, regardless of their exposure to deforestation, conversion, or associated human rights abuse risk.

These could be clients/holdings which:

• do not have an equivalent commitment or time-bound plan¹ to become compliant with your policy
• have open cases of deforestation, conversion and associated human rights abuses in their supply chains or financing activities
• are not making measurable progress towards your policy requirements or their time-bound plan for compliance
• have failed to annually report progress towards their deforestation, conversion, human rights and traceability commitments
• are found to be operating illegally
• a combination of these criteria.

It is important to communicate this threshold for engagement with clients/holdings in advance, before annual due diligence processes take place in Phase 3.

1. A time-bound plan would commit the client/holding to become compliant with all requirements of your organisation’s policy within a pre-agreed time frame of no later than 2025, or four years after beginning the Roadmap.

Defining measurable progress

‘Measurable progress’ will have different meanings depending on how advanced the customer’s/client’s approach is on deforestation.

Within one year of committing to this Roadmap, clients/holdings can be encouraged to have identified all of their high-risk operations, supply chains, and financing activities.

Over a three-year period, clients/holdings can be expected to have identified and addressed at least 75% of their high-risk sourcing or financing.

Over a four-year period, clients/holdings can be expected to have identified and addressed 100% of their high-risk sourcing or financing.

For clients/holdings who have already made progress on deforestation, conversion, and associated human rights risks in their supply chains or financing, the above percentages can be adjusted accordingly to continue driving ambitious progress.

This includes:

• What information/data the clients/holdings will need to report every 12 months to provide evidence of compliance with/progress towards the requirements set out in your policy, including progress relative to the time-bound plans set in Step B
  • This could be included in direct reporting from the client/holding to your financial institution and/or disclosed through reporting platforms such as CDP Forests, or in public sustainability reports that use accepted metrics and methods, such as those in the Global Reporting Initiative (GRI) standards and the future Taskforce on Nature-related Financial Disclosures (TNFD)
• Which third-party data providers, databases, other information sources, and monitoring systems will be used to complement, and/or verify reporting
  • Including the preference for information reported directly from affected rights-holders and communities where possible
• Information on grievances reported through publicly-available grievance mechanisms could also be used, which enables greater clarity of what is happening on the ground
  • This should include both your organisation’s grievance mechanisms and those of your clients/holdings, and could include third party grievance mechanisms or cases filed with relevant regulatory bodies.

This could include using some of the datasets and tools detailed in Step A of Phase 2, and below.

Company risk exposure and performance profiles

These datasets and tools can be used to identify and understand company/investment exposure to forest-risk commodities, sectors, and industries, and also to understand the extent and effectiveness of their action on deforestation, conversion, and associated human rights abuses.

• CDP Forests assesses companies on their progress towards removing commodity-driven deforestation and forest degradation from their operations and supply chains, based on their CDP disclosures. This provides information on the volumes of forest-risk commodities they source, as well as their actions and processes to address deforestation in their supply chains. Companies are also given a score which can easily be used to understand their performance on deforestation, with A being the highest score.
• Forests and Finance assesses the financing of 300 companies in forest-risk commodity supply chains, and evaluates the policies of financial institutions involved. This can be used to understand how any financial institutions in your portfolios are linked to deforestation risk, as well as to evaluate their performance on these issues.
• Forest IQ is a platform that provides data on how over 2000 companies are addressing their exposure to deforestation using 3 core metrics namely; exposure, materiality and performance on reporting.
  • Global Canopy’s Forest 500 and Forest 500 – Finance projects identifies the 500 companies and 150 financial institutions with the greatest exposure to tropical deforestation risk through their production, processing, procurement, and financing of the nine highest-risk forest commodities. The open source dataset also includes data on volumes of commodities used, as well as a total score for each company and financial institution reflecting their performance on deforestation and associated human rights abuses. This is also available via Forest IQ.
  • Global Canopy’s Floresta 250 project identifies the 175 companies and 75 financial institutions with the greatest exposure through their production, processing, procurement, and financing of beef and leather products. This is also available via Forest IQ.
• Global Forest Watch Pro uses geospatial data to monitor companies and banks in forest-risk commodity supply chains and can be used to assess the performance of high-risk upstream holdings on the implementation of their commitments on deforestation.
• Trase maps forest-risk supply chains linking consumer countries, and traders, with places of production, allowing pension funds to see which of their holdings are exposed to high-risk regions and commodities, through traders in forest-risk commodity supply chains.
• ZSL SPOTT assesses palm oil, timber, paper, and rubber producers and processors on the strength of their ESG policies, and publishes the full assessment online, enabling you to identify clients’/holdings’ exposure to forest-risk commodities and understand their performance on associated issues based on a score and the details of their assessments.
• ENCORE maps the impacts and dependencies of economic sectors on nature, and can be used to identify and assess nature-related risks at a sector and sub-sector level.
• Forest Stewardship Council (FSC) has a database of FSC certificates to understand the volumes of timber and pulp and paper used by clients/holdings, including the volume which is verified as compliant with FSC standards (equivalent to zero-gross deforestation).
• Land-use Finance Tool can be used to identify which finance flows are deforestation-free or in line with any pre-existing climate commitments, to understand the exposure and performance of other financial institutions.
• RepRisk provides data and metrics on the reputational risks posed by clients/holdings, which can be used to understand their performance on deforestation and associated human rights abuse risk.
• Roundtable of Sustainable Palm Oil (RSPO) ACOPs provides data on the volume of palm oil and derivatives produced, processed or procured by RSPO member companies including that which is verified compliant with their standards (equivalent to zero-gross deforestation).
• S&P Global provides relevant ESG ratings for companies, which may be used to identify their performance on some of the key issues around deforestation, conversion, and associated human rights abuses.
• Supply Change assesses over 700 companies on their deforestation policies for commodities including palm, cocoa, and soy, and provides a score for each company based on their performance on key indicators, and publishes details of their assessments.
• WWF Scorecards on palm, soy, timber provide assessments of the key companies operating in different supply chain segments, enabling you to understand the performance and exposure of key companies operating in these supply chains on deforestation, conversion and associated human rights abuses.
• The Chocolate Scorecard ranks companies at different stages in the chocolate supply chain according to their performance across a range of deforestation and associated human rights abuse indicators.
• Business & Human Rights Resource Centre stores news and allegations relating to the human rights impact of over 20,000 companies. Depending on the availability of data, this ranges from a handful of articles to over a decade of news stories, civil society reports and company disclosure.

Note that although these datasets and tools are helpful in understanding deforestation, conversion, and associated human rights risks, none provide all of the relevant data and information and are best used in combination. A further list of applicable datasets and tools is available from the Accountability Framework initiative.

Details of suggested metrics that can be used to identify high-, medium-, and low-risk clients/holdings can be found in the appendices.

• Accountability Framework Operational Guidance on Supply Chain Management offers practical guidance for companies in forest-risk commodity supply chains on how to ensure compliance with their commitments, which can be used to inform the development of your policy and the requirements you set for clients/holdings.
• SBTi Draft Forest, Land and Agriculture Science Based Target Setting Guidance provides guidance for companies to have a standard method to account and set science-based targets that include land-related emissions and removals.
• Accountability Framework Operational Guidance on Remediation and Access to Remedy (Annexes 1 & 2) for guidance on establishing an effective grievance mechanism in line with the UN Guiding Principles on Business and Human Rights. Although this is targeted at companies it provides useful guidance for all audiences on establishing an effective grievance mechanism.
• Ceres ‘Investor Guide to Deforestation and Climate Change’ provides guidance on how to set and communicate thresholds for non-compliance and/or engagement to your clients/holdings
• The Investor Initiative for Sustainable Forests, run by PRI and Ceres, has set out a number of investor expectations documents for companies involved in palm oil, soy and cattle supply chains.
• Stage 4 and Stage 5 of the Accountability Framework’s user guide on ‘How to write a strong ethical supply chain policy’ provide guidance on best practice for companies operating in forest-risk commodity supply chains
• Examples of action plans, and companies developing and reporting against these, can be seen in the Commodity Roadmaps published by Consumer Goods Forum Forest Positive Coalition.
• Signatories to the Financial Sector Commitment on Eliminating Commodity-driven Deforestation have developed a set of shared investor expectations which are available to inform and support other financial institutions.
• United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) adopted by 148 member states sets out “the minimum standards for the survival, dignity and well-being of the indigenous peoples of the world.”
• International Labor Organization, Convention No. 169 lays out specific rights for Indigenous and tribal peoples.
• Smallholder Engagement by Proforest discusses strategies for involving smallholder farmers in sustainable agricultural practices. It emphasizes the importance of building trust, fostering collaboration, and providing technical and financial support to enable smallholders to meet sustainability standards.
• United Nations Declaration on the Rights of Peasants and Other People Working in Rural Areas outlines rights for those who engage in small-scale agricultural production whether for subsistence or for the market. 
• The UN Declaration on Human Rights Defenders outlines key rights and expectations for the treatments of Human Right Defenders.

• Environmental Conduct Guides from TNC aims to establish and standardise criteria for creditors and investors across cattle and soy value chains, enabling them to develop or adapt financial mechanisms for a deforestation and conversion-free (DCF) approach, offering decision-support tools to enhance sustainability in agricultural investments.
• ‘Guide for Downstream Companies of Meat and Leather Processors Operating in the Amazon and Cerrado’ by Imaflora, provides simple and clear guidelines on how downstream companies can engage their suppliers to advance the implementation of social and environmental commitments in the beef and leather supply chains.
• Smallholder Engagement by Proforest discusses strategies for involving smallholder farmers in sustainable agricultural practices. It emphasises the importance of building trust, fostering collaboration, and providing technical and financial support to enable smallholders to meet sustainability standards.
• Recommendations for investors on deforestation and conversion risks related to cattle ranching and beef supply chains in Latin America  (Page 15) outlines key recommendations for investors operating in the region. The focus is on building long-term relationships with suppliers, monitoring progress, and ensuring compliance with environmental commitments.
• ‘Guide for the Reintegration of Cattle Ranchers into the Scope of Deforestation-Free Commitments in the Amazon’ from Imaflora, presents guidelines on how cattle producers can return to the cattle supply chain by requalifying through environmental regularisation, using commercial mechanisms such as PREM (Mato Grosso) and Sirflor (Pará).

Deforestation-free financial portfolios

Within this roadmap, deforestation-free investments, loans, and portfolios are those that are:

• Deforestation-free
• Conversion-free
• Free from human rights abuse associated with deforestation and conversion

The definitions of each of these terms are detailed below.

Deforestation

This Roadmap uses the definition of deforestation as outlined by the Accountability Framework.

‘Loss of natural forest as a result of: 

i) conversion to agriculture or other non-forest land use;

ii) conversion to a tree plantation; or

iii) severe and sustained degradation.’

• ‘Severe degradation (scenario iii in the definition) constitutes deforestation even if the land is not subsequently used for a non-forest land use.
• Loss of natural forest that meets this definition is considered to be deforestation regardless of whether or not it is legal.
• The Accountability Framework’s definition of deforestation signifies “gross deforestation” of natural forest where “gross” is used in the sense of “total; aggregate; without deduction for reforestation or other offset.’

‘Forest’ is as defined by the Accountability Framework initiative.

Conversion

This roadmap uses the definition of conversion as outlined by the Accountability Framework.

‘Change of a natural ecosystem to another land use or profound change in a natural ecosystem’s species composition, structure, or function.

• Deforestation is one form of conversion (conversion of natural forests).
• Conversion includes severe degradation or the introduction of management practices that result in a substantial and sustained change in the ecosystem’s former species composition, structure, or function.
• Change to natural ecosystems that meets this definition is considered to be conversion regardless of whether or not it is legal.’

Human rights associated with deforestation and conversion

This roadmap defines associated human rights as those which are related to deforestation and conversion of natural ecosystems for agricultural and forest-risk commodities. A wide range of human rights are linked to deforestation and conversion, but within this roadmap three specific human rights are included – the right to Free, Prior and Informed Consent, land rights of Indigenous peoples and local communities, and labour rights.

• The right to Free, Prior, and Informed Consent (FPIC) of Indigenous peoples and local communities
  • Defined by the Accountability Framework as ‘a collective human right of Indigenous peoples and local communities to give and withhold their consent prior to the commencement of any activity that may affect their rights, land, resources, territories, livelihoods, and food security. It is a right exercised through representatives of their own choosing and in a manner consistent with their own customs, values, and norms.’
• The customary rights of Indigenous peoples and local communities to land, resources, and territory 
  • Defined by the Accountability Framework as ‘patterns of long-standing land and resource usage in accordance with Indigenous peoples’ and local communities’ customary laws, values, customs, and traditions.
  • Such rights apply to the lands, resources, and territories that Indigenous peoples and local communities have traditionally owned, occupied, or otherwise used. They do not apply to lands, territories, and resources that these groups have acquired in other ways, such as by purchase or part of a compensation package.
  • These rights are a collective human right of Indigenous peoples and local communities that exists whether or not a title from the State has been issued.’
• Zero tolerance for threats and attacks against environmental and human rights defenders
  • In line with the standards outlined by the Zero Tolerance Initiative.
• Labour rights of workers (including contractors, smallholders, and temporary staff) at the points of production, including from the point of forest clearance to active production, for the highest forest-risk commodities. Where a financial institution or company is engaging with or monitoring a supply chain for deforestation or land rights risks, labour rights should be included in engagement or monitoring efforts in order to eliminate abuses of these rights too
  • As defined by the Accountability Framework Core Principle 2.3 this includes the right to have freedom of association, and to be free from forced labour, child labour, and discrimination in line with the ILO, and to ensure no abusive practices or undue disciplinary procedures, legal and decent working hours, safe and healthy workplaces and living wages and fair benefits.

Nature- and people- positive

Nature-positivity is halting and reversing nature loss. Naturepositive.org highlights three key steps to achieve nature-positivity including zero-net loss of nature from the end of 2020, net nature-positive by 2030, and a full recovery of nature by 2050. 

Nature- and people- positive financing is finance that makes progress towards halting and reversing nature loss while respecting and protecting the rights of humans who are dependent on or inhabit the land in question.

Deforestation and Conversion-Free Commitment

‘A public statement by a company/financial institution that specifies the actions that it intends to take or the goals, criteria, or targets that it intends to meet with regard to its management of or performance on environmental, social, and/or governance topics.

Commitments may also be titled or referred to as policies, pledges, or other terms.’

‘Commitments may be company-wide (eg, a company-wide forest policy) or specific to certain commodities, regions, or business units. They may be topic specific or they may address multiple environmental, social, and/or governance topics.’ See more at the Accountability Framework definition.

Implementation Plan

A documentation of the activities an organisation plans to carry out to address environmental or social issues or to fulfill commitments, policies, goals, or other obligations and can be a useful guide for each step planned to a deforestation-free portfolio.

Supplier engagement plan

‘Documentation of the actions that a buyer intends to implement to support its suppliers and help ensure that these suppliers comply with the buyer’s social and environmental commitments, policies, goals, targets, and other obligations.’  See more at the Accountability Framework definition.

An Accountability Framework aligned engagement plan can help companies understand how to engage suppliers (or for financial institutions to engage with clients/holdings) and track their progress in line with the Accountability Framework. Engagement plans are important to keep track of non-compliant suppliers’ progress to reinsert them into the supply chain. 

Some examples:

• Identify high-priority suppliers: Identify suppliers that present the highest level of non-compliance
• Save time and cost: Integrate manual supplier assessment questionnaires into one platform
• Plan field visits: Plan field visits or investments in improving practices

Cutoff date

A cut-off date is the date after which deforestation or conversion renders an area or production unit non-compliant with no-deforestation or no-conversion goals, commitments, targets, or other obligations. For instance, a cut-off date of 2020 means that companies or producers sourcing from land deforested or converted after 2020 will not receive financing or market access.

Target Date

A target date means the date by which an organisation aims to have fully implemented its commitment or policy. For example, a target date of 2025 indicates that by that year, the financial institution commits to having fully met its commitment.

Traceability

Traceability is defined as the ability to follow a product or its components through the stages of the supply chain (e.g., production, processing, manufacturing, and distribution). Full traceability systems should be able to track the origin of the commodity and it is often interpreted as the ability to verify the history, location, or application of an item through documented and recorded identification.

Compliance/Non-compliance

The state of complying (compliant) or not complying (non-compliant) with or fulfilling a given commitment, policy, other obligation.

In the context of the Accountability Framework, non-fulfilment of voluntary commitments and policies, non-compliance with applicable law, and adverse impacts to internationally recognised human rights are all considered instances of non-compliance.

Disclosure

Disclosure is the public sharing of information by companies. This can include reporting that is available to the public as well as free public sharing of other information, such as company policies and commitments; company business structures, affiliates, and financial interests; supplier lists; conflicts of interest; or political action (lobbying, campaign contributions, etc). Disclosure is a mechanism for transparency.

Due diligence

Due diligence is a risk management process implemented by a company to identify, prevent, mitigate, and account for how it addresses environmental and social risks and impacts in its operations, supply chains, and investments.

Legal Amazon

The Legal Amazon (“Amazônia Legal”) is a defined administrative region in Brazil that covers approximately 59% of the country’s territory. It includes nine states: Acre, Amapá, Amazonas, Maranhão (partially), Mato Grosso (partially), Pará, Rondônia, Roraima, and Tocantins. This region was established to promote social and economic development while considering the unique environmental characteristics of the Amazon. Although it overlaps significantly with the Amazon Biome, the Legal Amazon also includes areas of the Cerrado and Pantanal, making it broader than the strictly ecological definition of the Amazon. It’s often the focus of conservation policies, deforestation monitoring, and sustainable development programs.

Cattle direct and indirect suppliers

• Direct suppliers: These are ranches that sell cattle directly to meatpackers or slaughterhouses, often involved in the final stage of the cattle rearing process. . These suppliers can typically provide more traceable information about the cattle they sell since their transaction is straightforward and directly linked to the processing stage.
• Indirect suppliers: These ranches or intermediaries do not sell directly to the meatpackers but instead sell or transfer cattle to other ranches or traders. This category often includes auction houses, middlemen, smallholders and traders who move cattle between various ranches or regions before they reach the slaughterhouses. Since cattle can change hands multiple times, tracking their journey becomes more complicated, posing challenges for maintaining accurate traceability and monitoring.

GTA – Animal Transit Guide

The Animal Transit Guide (GTA) is an official document required in Brazil to track the movement of livestock, ensuring their traceability, health status, and compliance with sanitary regulations. It includes key information such as the origin, destination, and identification of the animals, along with details about any health checks or vaccinations. The GTA aims to prevent the spread of diseases, ensure proper animal welfare, and monitor the legal and ethical movement of cattle. However, it can be compromised through practices like cattle laundering, where falsified,manipulated or omitted information can conceal the true origin of the animals.

CAR – National Environmental Registry

The Cadastro Ambiental Rural (CAR) is a national environmental registry in Brazil designed to monitor and manage the use of rural properties. It requires landowners to register their properties and provide information about their environmental preservation areas, such as forests, riparian zones, and protected habitats. The CAR aims to promote sustainable land management, ensuring compliance with environmental laws, especially those related to deforestation, and supports efforts to restore degraded lands. By creating a digital record, it helps authorities track land use and improve environmental monitoring. The CAR is self-declaratory, meaning landowners provide the information themselves.

Cattle laundering

Cattle laundering refers to the illegal practice of disguising the origin of cattle, often to bypass regulations or to hide the involvement of cattle in illegal activities, such as deforestation, land grabbing, or the use of cattle for illicit purposes (e.g., in illegal slaughterhouses).

Defining measurable progress

‘Measurable progress’ will have different meanings depending on how advanced the customer/clients’ approach is on deforestation. 

Within one year of committing to this roadmap, clients/holdings can be encouraged to have

• identified all of their high-risk operations, supply chains, and financing activities.

Over a three-year period, clients/holdings can be expected to 

• have identified and addressed at least 75% of their high-risk sourcing or financing
• have reduced the deforestation-risk within that 75%.

Over a four-year period, clients/holdings can be expected to

• have identified and addressed 100% of their high-risk sourcing or financing
• have reduced the deforestation-risk within that 100%.

For customers/clients who have already made progress on deforestation, conversion, and human rights abuse risks in their supply chains or financing, the above percentages can be adjusted accordingly to continue driving ambitious progress.

‘Measurable progress’ will have different meanings depending on how advanced the customer/clients’ approach is on deforestation in Brazilian beef and/or leather supply chains.

Within one year of committing to this roadmap, clients/holdings can be encouraged to have

• identified all of their high-risk operations, supply chains, and financing activities, prioritising those with high deforestation risks such as the Amazon and the Cerrado.

Over a three-year period, clients/holdings can be expected to

• have identified and addressed at least 75% of their high-risk sourcing or financing
• have reduced the deforestation-risk within that 75%.

Over a four-year period, clients/holdings can be expected to

• have identified and addressed 100% of their high-risk sourcing or financing
• have reduced the deforestation-risk within that 100%.

For customers/clients who have already made progress on deforestation, conversion, and human rights abuse risks in their Brazilian cattle supply chains or financing, the above percentages can be adjusted accordingly to continue driving ambitious progress.

As defined by the Forest 500 selection methodology. The Forest 500 does not cover all possible commodities, and for some countries other commodities will be more important.

Country	Key forest-risk commodities produced
Argentina	Soy, Cattle, Timber
Australia	Cattle, Timber
Bolivia	Soy, Cattle
Brazil	Palm, Soy, Cattle, Timber, Cocoa, Coffee, Rubber
Cambodia	Rubber
Cameroon	Palm, Cocoa
Canada	Soy, Cattle, Timber
Central African Republic	Coffee
China	Soy, Cattle, Timber, Rubber
Colombia	Palm, Cattle, Cocoa, Coffee
Côte d’Ivoire	Palm, Cocoa, Coffee, Rubber
Democratic Republic of the Congo	Palm, Coffee
Ecuador	Palm, Cocoa
Ethiopia	Cattle, Coffee
Ghana	Palm, Cocoa, Rubber
Guatemala	Palm, Coffee, Rubber
Guinea	Palm, Cattle, Coffee
Honduras	Palm, Coffee
India	Cocoa, Coffee, Rubber
Indonesia	Palm, Cattle, Timber, Cocoa, Coffee, Rubber
Laos	Coffee, Rubber
Liberia	Cocoa, Rubber
Madagascar	Cattle, Coffee
Malaysia	Palm, Timber, Rubber
Mexico	Cattle, Coffee
Myanmar	Cattle, Rubber
Nicaragua	Coffee
Nigeria	Palm, Soy, Cattle, Cocoa, Rubber
Papua New Guinea	Palm, Cocoa
Paraguay	Soy, Cattle
Peru	Cocoa, Coffee
Philippines	Coffee, Rubber
Russia	Timber
Tanzania	Cattle, Coffee
Thailand	Palm, Timber, Rubber
Uganda	Cattle, Cocoa, Coffee
United States of America	Timber
Venezuela	Cattle, Cocoa, Coffee
Vietnam	Timber, Coffee, Rubber

As defined by the Forest 500 selection methodology. The Forest 500 does not cover all possible commodities, and for some countries other commodities will be more important.

Country	Top forest-risk commodity imports
USA	Beef, Leather, Timber, Paper, Rubber, Coffee, Cocoa
Germany	Beef, Leather, Soy, Timber, Paper, Rubber, Coffee Cocoa Palm
Canada	Beef, Soy,Timber, Paper, Rubber, Coffee, Cocoa
Türkiye	Beef, Leather, Soy, Paper, Rubber, Coffee, Cocoa, Palm
Spain	Soy, Timber, Paper, Rubber, Coffee, Cocoa,Palm
China	Beef, Leather, Soy, Timber, Paper, Rubber, Coffee, Cocoa, Palm
Malaysia	Beef, Paper, Rubber, Coffee, Cocoa
Mexico	Beef, Leather, Soy, Timber, Paper, Coffee, Cocoa
Viet Nam	Leather, Rubber, Coffee, Cocoa
United Kingdom	Soy, Timber, Paper, Coffee, Cocoa
Colombia	Soy
Italy	Leather, Coffee, Cocoa
India	Leather, Soy, Rubber, Palm
Japan	Beef, Timber, Rubber, Coffee, Cocoa
Netherlands	Soy, Coffee, Cocoa

More details on how sectors are exposed to other agricultural commodities, can be found in Ceres’ Investor Guide to Deforestation and Climate Change.

High-risk sectors
GICS Sub-industry	GICS Code	High forest-risk commodities for the sub-industry
Energy (1010)
Coal and consumable fuels	10102050	Palm oil, Soy
Materials (1510)
Paper packaging	15103020	Pulp and paper
Forest products	15105010	Pulp and paper, Timber
Paper products	15105020	Pulp and paper
Capital goods (2010)
Trading companies and distributors	20107010	Beef, Leather, Palm oil, Pulp and paper, Soy, Timber
Automobiles and components (2510)
Automobile manufacturers	25102010	Leather
Consumer durables and apparel (2520)
Home furnishings	25201020	Leather, Timber
Homebuilding	25201020	Timber
Apparel, accessories and luxury goods	25203010	Leather, Pulp and paper (including cellulosic fibres)
Footwear	25203020	Leather, Pulp and paper (including cellulosic fibres)
Textiles	25203030	Leather, Pulp and paper (including cellulosic fibres)
Consumer services (2530)
Restaurants	25301040	Beef, Palm oil, Soy
Retailing (2550)
Internet & direct marketing retail	25502020	Pulp and paper
Multiline retail	25503010	Beef, Leather, Palm oil, Soy, Pulp and paper, Timber
Apparel retail	25504010	Leather, Pulp and paper (including cellulosic fibres)
Home improvement retail	25504030	Timber
Automotive retail	25504050	Leather
Home furnishings retail	25504060	Leather, Timber
Food and staples retailing (3010)
Food distributors	30101020	Beef, Palm oil, Pulp and paper, Soy
Food retail	30101030	Beef, Palm oil, Pulp and paper, Soy
Food, beverage and tobacco (3020)
Agricultural products	30202010	Beef, Leather, Palm oil, Pulp and paper, Soy, Timber
Packaged foods and meats	30202030	Beef, Palm oil, Soy
Household and personal products (3030)
Household products	30301010	Palm oil, Pulp and paper, Soy
Personal products	30302010	Palm, Soy, Pulp and paper
Banks (4010)
Diversified banks	40101010	Beef, Leather, Palm oil, Soy, Pulp and paper, Timber
Regional banks	40101015	Beef, Leather, Palm oil, Soy, Pulp and paper, Timber
Thrifts and mortgage finance	40102010	Beef, Leather, Palm oil, Soy, Pulp and paper, Timber
Utilities (5510)
Renewable electricity	55105020	Palm oil, Soy, Timber

High-risk sectors
GICS Sub-industry	GICS Code	High forest-risk commodities for the sub-industry
Capital goods (2010)
Trading companies and distributors	20107010	Beef, Leather, Palm oil, Pulp and paper, Soy, Timber
Automobiles and components (2510)
Automobile manufacturers	25102010	Leather
Consumer durables and apparel (2520)
Home furnishings	25201020	Leather, Timber
Apparel, accessories and luxury goods	25203010	Leather, Pulp and paper (including cellulosic fibres)
Footwear	25203020	Leather, Pulp and paper (including cellulosic fibres)
Textiles	25203030	Leather, Pulp and paper (including cellulosic fibres)
Consumer services (2530)
Restaurants	25301040	Beef, Palm oil, Soy
Retailing (2550)
Multiline retail	25503010	Beef, Leather, Palm oil, Soy, Pulp and paper, Timber
Apparel retail	25504010	Leather, Pulp and paper (including cellulosic fibres)
Automotive retail	25504050	Leather
Home furnishings retail	25504060	Leather, Timber
Food and staples retailing (3010)
Food distributors	30101020	Beef, Palm oil, Pulp and paper, Soy
Food retail	30101030	Beef, Palm oil, Pulp and paper, Soy
Food, beverage and tobacco (3020)
Agricultural products	30202010	Beef, Leather, Palm oil, Pulp and paper, Soy, Timber
Packaged foods and meats	30202030	Beef, Palm oil, Soy
Banks (4010)
Diversified banks	40101010	Beef, Leather, Palm oil, Soy, Pulp and paper, Timber
Regional banks	40101015	Beef, Leather, Palm oil, Soy, Pulp and paper, Timber
Thrifts and mortgage finance	40102010	Beef, Leather, Palm oil, Soy, Pulp and paper, Timber

The strongest deforestation policies commit the financial institution to ensuring that their financial portfolios are compliant with

• zero-gross deforestation of all natural forest ecosystems (both legal and illegal)
• zero-gross conversion of all natural ecosystems, including critical wetlands, savannahs, and high conservation value ecosystems (both legal and illegal)
• the protection of associated human rights, specifically
  • the Free, Prior, and Informed Consent (FPIC) of Indigenous peoples and local communities;
  • the customary rights of Indigenous peoples to lands, resources, and territories;
  • labour rights of workers (including contractors, smallholders, and temporary staff) at the points of production, including from the point of forest clearance to active production, for the highest forest-risk commodities. Where a financial institution or company is engaging with or monitoring a supply chain for deforestation or land rights risks, labour rights should be included in engagement or monitoring efforts in order to eliminate abuses of these rights too
    • As defined by the Accountability Framework Core Principle 2.3 this includes the right to have freedom of association, and to be free from forced labour, child labour, and discrimination in line with the ILO, and to ensure no abusive practices or undue disciplinary procedures, legal and decent working hours, safe and healthy workplaces and living wages and fair benefits; and
  • zero tolerance for threats and attacks against environmental and human rights defenders.

The policy should also cover all branches and operations of the financial institution (including all products and services provided, in all geographical locations where the financial institution operates; for the banking sector this includes lending, underwriting and advisory services), and be clear on how the financial institution will monitor the clients/holdings in its financial portfolios for compliance with the policy.

Further, the strongest deforestation policies, drawn from the Accountability Framework initiative Common Methodology

• are fully transparent and publicly available
• require clients/holdings operating at all stages of supply chains to ensure that the forest-risk commodities they produce, process, procure or finance have not contributed to deforestation or the conversion of natural ecosystems, or associated human rights risks
• have clear time-bound target dates
• have clear cut-off dates aligned with local regulations and global initiatives.