New data platform Forest IQ, which aims to help financial institutions eliminate deforestation from their portfolios, has launched.
Forest IQ was co-created by Global Canopy, Stockholm Environment Institute (SEI) and The Zoological Society of London(ZSL). The platform brings together aligned, and actionable data on how more than 2,000 major companies are addressing their links to deforestation.
Forest IQ presents three fundamental metrics: reported performance, materiality, and exposure. These indicators were created in close cooperation with HSBC, Blackrock, and BNP Paribas, among others.
The metrics and data are publicly available to encourage better deforestation-related action and accountability among major corporations and financial institutions. It aims to help financial institutions comply with new international reporting standards like the Taskforce for Nature-Related Financial Disclosures and is in line with the Accountability Framework initiative’s deforestation criteria.
The platform is designed with financial institutions’ unique requirements in mind. It provides corporate financial IDs and an API that can be integrated into existing workflows to enable quicker and more efficient portfolio screening.
Global Canopy executive director Niki Mardas says: “Financial institutions that are still ignoring deforestation in their portfolios are pursuing a dangerous strategy – or perhaps are just asleep at the wheel. There is no pathway to net zero or nature goals without rapid action on deforestation, yet our analysis shows that the great majority of financial institutions are still at the starting line. Improved transparency is leading to growing public pressure, and new regulations in key jurisdictions will make it increasingly costly for those that drag their feet as competitors take action.
“Forest IQ will make it easier than ever for financial institutions to play their vital part in a rapid marketwide transition away from deforestation. It provides a simple and practical high-level company benchmark on deforestation while retaining all the power and depth of market-leading datasets that provide over 2,400 indicators on deforestation, conversion and human rights abuses. As new datasets emerge, the platform will continue to evolve too.
We hope that leading financial institutions will see Forest IQ as a powerful new ally on their journey to deforestation-free portfolios. And that laggards will see it as the end of the road for excuses.”
Robeco head of engagement Peter van der Werf says: “Robeco has spent considerable time in recent years engaging ESG data providers to find the right deforestation screening data to help us manage deforestation risk in our portfolios. Forest IQ delivers an important contribution to the ESG landscape for investors with their continuous search for actionable data and assessments of companies on their performance in mitigating deforestation loss.”
Storebrand senior analyst Vemund Olsen says: ”Storebrand has been screening our portfolios for deforestation risk since 2020, but the lack of comprehensive, high-quality data on companies’ exposure and management of deforestation risk has been a challenge. Forest IQ will enable us to improve and expand our screening, risk assessment and stewardship, and help us in our efforts to eliminate commodity-driven deforestation from our investment portfolios.”
Climate Champions Team finance nature lead Puninda Thind says: “The climate and nature crises are inextricably linked. Without tackling deforestation, financial institutions cannot deliver on their net-zero targets. Forest IQ is a huge step towards helping financial institutions understand the at-risk companies in their supply chains – moving the sector towards a nature-positive net-zero future.”
ZSL sustainable business & finance programme manager Oliver Cupit says: “With deforestation worsening again in 2022, we are far off track to meet 2030 deforestation targets and secure a future limited to 1.5 degrees of warming. We need global mobilisation to stop and reverse forest destruction, and financial institutions have a major, critical role to play. Forest IQ makes it simpler than ever before to assess deforestation risks and exposure, enabling financial institutions to take action to eliminate deforestation from their portfolios.”
