To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps the Government is taking to ensure that UK banks and financial institutions are not involved in the financing of companies whose operations contribute to deforestation or habitat destruction in (a) Brazil and (b) other countries; and if he will make a statement.
The Government is committed to better understanding and addressing this issue. We are working with financiers and partners to take action in a number of ways.
In 2018 BEIS, DFID and DEFRA ministers commissioned the UK’s Global Resource Initiative (GRI), an independent taskforce through which over 200 leading UK companies, NGOs and financiers, on 30th March, published recommendations for how the UK can mitigate the environmental footprint of its deforestation-risk supply chains and investments. The Government is now considering these recommendations as a matter of priority
The Government’s Green Finance Strategy also included an expectation that listed companies and large asset owners should, by 2022, disclose information on the climate impact of their activities in line with recommendations from the Taskforce on Climate-related Financial Disclosure (TCFD). The government has established a process with the relevant regulators to explore the most effective way to approach climate-related financial disclosure in the UK, and this includes considering whether it would be appropriate to make reporting mandatory
In order to help financiers and supply chains actors better understand their role in global deforestation and habitat loss, the UK directly funds and supports technological solutions to bring greater transparency to deforestation-risk investments such as the Global Canopy’s Forest 500 Report and TRASE tools. We also support efforts to find new ways of accounting for the risks and value of natural capital, which is a key focus for the Treasury’s Dasgupta Review on the Economics of Biodiversity
We recognise that this is a global problem which requires strong partnership with other countries. The UK has committed over £200m in climate finance to Brazil to date (2016-2021), including to support community, business and local-government-led initiatives to tackle deforestation and prevent habitat destruction. These initiatives help strengthen forest governance, increase the value of Brazil’s standing forest, incubate forest friendly business models, and harness sustainable forms of private sector investment. On Friday 5th June, we announced a further £64m of support to protect tropical rainforests in Colombia against deforestation
As COP26 President we are also working with our international partners to green local and international supply chains for foodstuffs and key commodities and increase the alignment of financial flows with net-zero and the Paris Agreement objectives.