Besides its dramatic impact on biodiversity, local populations and water resources, deforestation in <\/span>the tropics is also responsible for about 8% of the world\u2019s annual greenhouse gas emissions. This is more than the entire EU\u2019s emissions and is just behind the US. As stated in IPCC\u2019s Special Report on climate change and land<\/a><\/u>, drastically reducing annual emissions from deforestation is vital if we are to limit global warming to 1.5\u00b0C. Yet destructive deforestation activities continue to be well-funded worldwide. <\/span><\/b><\/p>\n The soya industry is one of the leading drivers <\/span>of <\/span>deforestation<\/span> in the Brazilian Amazon and <\/span>Cerrado<\/span> regions. <\/span>Less <\/span>well-<\/span>known than the Amazon, t<\/span>he<\/span> Cerrado<\/span> is<\/span> the world\u2019s most biodiverse savannah and<\/span> plays <\/span>a <\/span>key <\/span>role in Brazil\u2019s water systems<\/span>.<\/span> Nevertheless,<\/span> it has <\/span>already <\/span>lost<\/span> 50%<\/a><\/u><\/span> of its original area<\/span>.<\/span> Its disappearance would be a disaster for the climate and <\/span>for <\/span>biodiversity, as it stores the equivalent of 13.7 billion tons of carbon dioxide (CO<\/span>2<\/span>) and is home to 5% of the world’s biodiversity.<\/span><\/p>\n The <\/span>s<\/span>olutions exist <\/span>for<\/span> financial institutions <\/span>t<\/span>o<\/span> help stop the conversion related to soya production: the <\/span>solution<\/span> lies in adopting and implementing \u00ab\u00a0zero deforestation\u00a0\u00bb measures by traders<\/span>.<\/span> The four most important <\/span>traders of <\/span>soya f<\/span>rom Brazil are <\/span>the so-called ABCD group, which include Archer Daniels Midland (commonly known as \u2018ADM\u2019), Bunge, Cargill, and Louis Dreyfus. <\/span>Despite<\/span><\/b> <\/b>making voluntary<\/span><\/b> <\/b>zero deforestation <\/span><\/b>commitments<\/span><\/b>, these <\/span><\/b>companies fail<\/span><\/b> to effectively prevent deforestation in their supply chain<\/span><\/b>,<\/span><\/b> mainly due to the lack of a<\/span> cut-off <\/span><\/i>date<\/span><\/i>\ufffc*<\/span>, <\/span>and<\/span> the lack of <\/span>standardaised<\/span> zero-deforestation clauses in contracts<\/span> and a full <\/span>traceability <\/span>system. <\/span><\/p>\n In 2017, t<\/span>he ABCD group, in addition to <\/span>Amaggi<\/span> and <\/span>Cofco<\/span>,<\/span> constituted <\/span>66%<\/span> of <\/span>the <\/span>deforestation risk <\/span>directly related with soya expansion. <\/span>Analysis<\/span><\/a> of the traders show<\/span>s<\/span> that <\/span>Cargill <\/span>and <\/span>Bunge <\/span>are <\/span>among <\/span>the worst performing in terms of<\/span> mitigating<\/span> deforestation<\/span>-risk<\/span>. <\/span>Cargill <\/span>is<\/span> associated with more<\/span> than<\/span> 61,000 <\/span>h<\/span>ectares<\/span> of<\/span> land<\/span> clearance in Brazil<\/span> in 18 months alone<\/span>.<\/span> Bunge is France\u2019s largest soya importer and is linked to deforestation the size of Marseille, Lyon and Toulouse together<\/span> (38,000 ha)<\/span> in the same <\/span>period<\/span>.<\/span><\/p>\n Consequently, financial institutions must <\/span><\/b>demand<\/span><\/b> traders the following measures: <\/span><\/b><\/p>\n Financial institutions must commit to suspend their financial services to the traders that have not implemented the four measures described above; and eventually cease financial s<\/span>ervices to companies who cannot demonstrate compliance with 100% conversion-free supply chains by the 1st of January 2022.<\/span><\/span><\/b><\/p>\n To implement the<\/span><\/b>se<\/span><\/b> <\/b>demands<\/span><\/b>, financial institutions can use the following<\/span><\/b> resources<\/span><\/b> about the c<\/span><\/b>ommodity trading and supply chain<\/span><\/b>:<\/span><\/b><\/p>\n\n
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