January 2021 – The University of Cambridge Institute for Sustainability Leadership (CISL) has published a new report detailing how the banking industry can contribute to halting and reversing deforestation.
The publication marked the conclusion of the ‘Soft Commodities’ Compact, which was a company-led alliance between the Banking Environment Initiative (BEI) and Consumer Goods Forum (CGF).
How the banking industry can help tackle deforestation
The action plan set out in Banking beyond Deforestation highlights opportunities for banks to grow the supply of soft commodities that are deforestation-free or forest restorative. Underpinned by a set of five actions, the new report aims to act as a catalyst for banks to respond to the biodiversity and climate crisis.
While sharing lessons learnt from the ‘Soft Commodities’ Compact, the publication explains how local, regional and global banks can support activities that halt and reverse deforestation.
Despite global efforts, deforestation continues. By sharing lessons learnt and articulating a granular five-part plan for the banking industry to combat deforestation moving forward, CISL aims to catalyse further action by banks and stakeholders, including by local and regional banks that were not in the Compact.
Please note that the plan put forward in Banking Beyond Deforestation has been developed by CISL as an ambitious potential leadership position. It has not yet been endorsed by banks or other stakeholders.
Concluding the ‘Soft Commodities’ Compact
The publication of Banking Beyond Deforestation marks the conclusion of the ‘Soft Commodities’ Compact, the goal of which was to lead the banking industry in aligning with the CGF’s resolution to help achieve zero net deforestation by 2020.
As a result of this ambitious public commitment, Compact banks have become leaders. Using Technical Guidance developed in consultation with banks and stakeholders, banks established anti-deforestation policies and began reporting compliance levels. Today, Forest 500 ranks Compact adopters amongst the most advanced in terms of ‘policy’ – all are in the top 30 of 150 financial institutions.
Bank commitments to the Compact also made possible a programme of work at CISL on soft commodities supply chains, sustainable livelihoods and finance, including:
- Sustainable Shipment Letter of Credit (2014)
- Sustainable Trade Finance Council (2015)
- Greening the finance of China’s commodity imports (2016)
- Catalysing Fintech for Sustainability: Lessons from multi-sector innovation (2017)
- Trado: New technologies to fund fairer, more transparent supply chains (2019)
Citing this report
University of Cambridge Institute for Sustainability Leadership (CISL). (2021). Banking Beyond Deforestation. Cambridge: University of Cambridge Institute for Sustainability Leadership
Authors
This report was authored at CISL by Grant Rudgley and Annabel Ross, supported by Dr Cath Tayleur, Colette Bassford, Dr Jake Reynolds, Nick Villiers, Romain Pardo, Thomas Verhagen and Thom Marx.
Acknowledgements
CISL would like to thank those banks that adopted the ‘Soft Commodities’ Compact. Without this industry commitment and the willingness to share experiences and insights, this publication would not have been possible. Particular thanks go to those banks in the Banking Environment Initiative (BEI), which funded the secretariat of the Compact throughout. BEI-member Compact adopters were Barclays, BNP Paribas, Deutsche Bank, Lloyds Banking Group, NatWest Group, Santander and Standard Chartered. Non-member banks that adopted the Compact were J.P. Morgan, Rabobank, Société Générale, UBS and Westpac.
CISL would also like to thank those who peer reviewed the report and provided valuable feedback and perspectives: Alison Midgely (WWF-UK), Chris Hart (Global Canopy), Corinne Raux (The Environment and Social Agency for Financiers), Matt Ford (Experts in Sustainable Forest & Agricultural Advice), Ignacio Gavilan (Consumer Goods Forum), Raj Kundra (WWF-US), Rodrigo Cassola (United Nations Environment Programme – World Conservation Monitoring Centre), Sharon Brooks (United Nations Environment Programme – World Conservation Monitoring Centre) and Shona Tatchell (Halotrade).
