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Global Canopy: New Tools Provide Significant Opportunity for Latin American Banks to “Underwrite Regional Food Security”, Through Better Management of Soft Commodity Risks | Business Wire

LONDON–(BUSINESS WIRE)–New research from Global
Canopy, developed in partnership with WWF, has found that banks
operating in Brazil and Paraguay stand to benefit from improving
policies to manage the negative environmental and social impacts of soft
commodities such as beef, soy, palm oil and timber production.

Soft commodity production is a major driver of tropical deforestation
and contributes a significant portion of the 15-20% of carbon emissions
linked to the loss of forests globally. If banks put in place safeguards
to ensure the sustainable production of soft commodities they can
capture the opportunity to align their portfolios with the Sustainable
Development Goals and transition to a low carbon economy.

Research released today finds that 9 of 14 Brazilian banks (64%)
explicitly state that their clients need to operate legally. However,
there is room for improvement too, as only one bank encourages companies
to ensure Free, Prior and Informed Consent, and none require companies
to meet key labour standards.

Today’s package of tools added to Global Canopy’s SCRIPT
(the Soft Commodity Risk Platform), to help banks and investors analyse
their exposure to risk in soft commodity supply chains include:

Financial support for the project has come from the Gordon and Betty
Moore Foundation.

Tom Bregman, Senior Sustainable Finance Associate, Global Canopy

“The banking sector in Latin America has a historic opportunity to
underwrite regional food security and reap the multi-trillion dollar
benefits across its lending and investment portfolios. But first there
is a real need to put in place policies that properly assess the
environmental and social risks of those they finance. Every year, over
nine million hectares of tropical forests are cleared to make way for
the production of soft commodities such as palm oil, soy, cattle, and
timber. And more than 30% of the world’s fisheries have been pushed
beyond their biological limits.“

Raj Kundra, Vice President, International Finance, World Wildlife

“While there are encouraging signs that regional banks are starting
to act in areas such as labour rights or palm oil, there is still a long
way to go. The majority of banks assessed do not have adequate seafood
and soft commodity policies to seize the opportunity of financing the
food security of tomorrow. That’s why today’s tool and guidance is so
important. They help provide a platform to bridge the capacity gap,
enabling banks to develop meaningful policies that help manage supply
chain risks and opportunities.”

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