The UK government has made commendable efforts to raise the international political profile of forests. Both the former Prime Minister, Boris Johnson, and current P.M. Rishi Sunak have taken to the international stage to highlight the crucial role that forests play in preserving biodiversity and keeping the planet cool.
The Glasgow Declaration on Forests, which the UK spearheaded in 2021 is just one example of this leadership. It commits signatories to ‘align financial flows’ with the mission to halt and reverse deforestation by 2030.
This is crucial because UK financing has an enormous deforestation footprint in climate critical forests like those in the Amazon region, the Congo Basin and South East Asia. Global Witness’ research showed that in a 5 year period between the Paris COP and our own Glasgow COP, British banks and financers made deals worth $16.6 billion with just 20 agri-businesses implicated in deforestation. No doubt there were many more forest-risk deals, made outside of those 20 businesses.
A year and a bit on from the Glasgow Declaration, we’re at a cross-roads.
We can continue down our current path, devasting habitats and the chances of ever keeping to 1.5 degrees of global warming in our wake, or we can take the opportunity of the Financial Services and Markets Bill to end the flow of finance from the City of London to businesses causing deforestation overseas.
I am tabling an amendment to the Bill, picking up from the amendment tabled by Chris Grayling in the other place. Our amendment – which has been supported across political parties- would outlaw the financing of companies that deal in specific forest risk commodities (like soy, beef, palm) unless those companies could show that they had conducted the correct due-diligence and they were not causing deforestation.
It’s a fairly simple amendment because those business dealing in forest risk commodities will soon be required to do due diligence anyway under Article 17 of the Environment Act. Our amendment simply extends that requirement to financiers.
The need for legal change is clear. The forests are shrinking at an alarming rate – with thousands of species at risk of extinction. Sadly the UK continues to play an outsized role in driving this devastation.
The need for change is supported by a government-appointed taskforce, made up of business and other leaders, whose remit was to recommend how to reduce the UK’s international deforestation footprint. It was chaired by Sir Ian Cheshire, former Chair of Barclays. This taskforce concluded in July – having considered all the other initiatives underway - that new legislation was needed. Sir Ian has since written again to Ministers to flag the opportunity of the Financial Services and Markets Bill in this regard.
If we in the UK are to be the net zero financial centre the PM has in his previous role, said he’d like us to be, then we need to embrace first-mover advantages and outlaw forest destructive investments soon. That would be real leadership. People living on the frontline of forest destruction and future generations – who will want to enjoy the world in all its glorious biodiversity as we do – need us to act.
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