New Zealand Investors Fund Deforestation
A recent research report reveals a troubling association between New Zealand KiwiSaver and managed fund investors and the corporations responsible for deforestation.
According to Mindful Money, a charity organisation, the research revealed that New Zealand investments are being channelled towards specific firms that are leading contributors to deforestation in sectors like palm oil, beef, and soybeans.
During the last year, investments in such firms have surged from $38 million to $68 million, with KiwiSaver accounts contributing the majority ($40 million).
Barry Coates, Founder and CEO of Mindful Money, remarked, "For the first time, this report exposes the association between Kiwis' investments and deforestation. Despite surveys indicating that most New Zealanders desire to prevent environmental harm from their investments, their funds are being directed to companies that are known to promote deforestation."
The financing from New Zealand and international sources are fueling extensive deforestation of tropical forests in the Amazon basin, South East Asia, and the Congo basin. This degradation is turning these critical ecosystems from carbon sinks into net carbon emitters, intensifying global emissions and hastening climate change. Deforestation also has catastrophic consequences for ecosystems, leading to the loss of biodiversity and the infringement of the rights of indigenous peoples.
Even though 145 governments committed to halting deforestation at the COP26 Climate Summit last year, financiers persist in providing funds to firms responsible for this destruction. As of 2022, 61% of the financial institutions financing such companies lack a deforestation policy covering their loans and investments.
Financing firms that drive deforestation not only contradicts their customers' principles but also exposes them to financial hazards. The study highlights certain risks linked with deforestation, such as forthcoming EU regulations on commerce related to products associated with deforestation. Additionally, it refers to Chapman Tripp's recent legal opinion on directors' responsibilities regarding nature-related risks.
Coates calls for New Zealand's investment sector to take swift action against deforestation, stating that it is essential to adopt policies that do not support activities that cause deforestation or demand immediate changes in the practices and policies of companies responsible.
He also emphasises the need for these companies to ensure that their investments do not contribute to biodiversity loss, climate change, or the violation of indigenous peoples' rights. Coates encourages New Zealanders to use their financial influence to promote sustainable development and fight against deforestation worldwide.
Source: Scoop
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