Schroders tops financial institutions in the latest Global Canopy Forest 500 report

02-21-2023
andy-howard-biodiversity

We’re proud to have topped the list of financial institutions in this year’s Global Canopy Forest 500 report, a ranking of companies and financial institutions deemed “powerbrokers of zero deforestation”.

In what Global Canopy, an environmental not-for-profit, considered a “watershed year for action on deforestation”, our score jumped to 50% to lead the financial institutions in the 2023 report.  The report also highlighted the pressing need for more action across financial institutions and other companies.  While we are pleased that our efforts have been recognised, we realise that more will be needed as pressure on companies grows. 

We have considered deforestation risk for many years, including committing to end commodity-driven deforestation at COP26 in 2021. Over the last year, we have focused in ensuring that we publish more information on our approach to nature and biodiversity. Key initiatives include a formal deforestation plan, published in our Group Position Statement on Nature and Biodiversity, and our Plan for Nature, both launched in October 2022.

We also launched an award-winning Engagement Blueprint at the start of 2022, which provides clear guidance on how to engage with companies over six core themes, including natural capital and biodiversity. And we have expanded on our expectations of companies this year, with a particular focus on deforestation.

Andrew Howard, Global Head of Sustainable Investment, said:
“With more than half of global GDP at moderate or severe risk due to nature loss [1], nature risk has become a more prominent factor to investment risk and returns. We firmly believe that managing nature risk is part of our responsibility to clients and key to us continuing to deliver robust, long-term returns.

“While our leading ranking among financial institutions in the latest Global Canopy Forest 500 report is recognition of the significant action we are taking, we also acknowledge more needs to be done and look forward to continuing our action in this area.”

Catherine Macaulay, Impact Investment Lead, said:
“Without action, deforestation could undermine any hope of limiting global warming to 1.5 degrees, exacerbate biodiversity loss, and threaten food security and livelihoods of communities around the world. Exposed companies also face significant physical and transition risks as regulation tightens and consumer and investor scrutiny increases. Tackling deforestation is therefore critical in enabling us to act in the long-term interests of our clients. It also offers an exciting opportunity for the financial industry to be part of the solution through direct investment into natural capital projects.”

Sarah Woodfield, Active Ownership Manager, Biodiversity and Natural Capital, said:
“As an active manager, we have a distinct opportunity to engage constructively with company management teams and support them to transform their business models to a more sustainable footing. It is essential that we work with companies who are highly exposed to forest risk commodities to encourage them to take every step possible to eliminate deforestation in their operations and supply chain. To maximise our impact, we have made nature central to our engagement strategy.”

Forest 500 identifies the 350 companies and 150 financial institutions with the greatest exposure to tropical deforestation risk. The annual report, running since 2014, assesses the actions taken by organisations on deforestation and associated human rights risks. Data is collected to examine organisations’ approaches to managing exposure to four commodities – timber, soy, palm oil, beef and leather – including policies, implementation and transparent reporting.

The assessment aims to hold the 500 organisations to account, provide a comprehensive public dataset on their performance and drive forward progress towards commodity supply chains that are free from harmful deforestation.

[1] https://www.weforum.org/agenda/2023/01/davos23-nature-loss-is-an-economic-crisis-innovation-is-needed-now/

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