A major Asian investor organisation on Tuesday launched an initiative to support regional investors in developing risk management processes and investment policies to help ending deforestation.
The Asian Investor Group on Climate Change (AIGCC) announced it is setting up two new working groups among members – one to address deforestation and one to deal with the energy transition.
“Deforestation drives significant carbon emissions and biodiversity loss. The AIGCC Forest & Land Use Working Group will build investors’ capacity to understand and manage the emissions of soft commodity-driven deforestation,” AIGCC said.
The group has over 70 members from 11 markets with more than $31 trillion in assets under management. Its activities primarily target climate change, though the new deforestation initiative also has a significant biodiversity component.
“Deforestation and land use change is [a] key area where investors are realising the increased need in managing emissions and the biggest driver of biodiversity loss due to habitat destruction,” Monica Bae, AIGCC’s director, investor practice said.
“Sustainable land management strategies will provide ample investment opportunities in natural climate solutions.”
Southeast Asia’s rainforests are among the most important biodiversity hotspots on the planet, and while countries such as Indonesia and Malaysia in particular have been developing policies around carbon markets to help fund a reversal of the deforestation trend, biodiversity has yet to feature prominently on the list of investors’ and policy-makers’ priorities.
Further north, China has in recent years begun the process of compensating for the massive forest losses of the 1990s and 2000s, though market-based solutions so far tend to produce monoculture tree plantations optimised for carbon sequestration.
“Investor engagement to drive the integration of deforestation policy and portfolio deforestation analyses for investor members” will be a main focal point of the new working group, according to AIGCC.
The group will also seek to encourage “policy engagement to facilitate investor members signing up for policy statements and connecting to deforestation-related statements/initiatives”.
AIGCC working group members are expected to “demonstrate more climate-focused actions than the average investor in the region, reflecting both the effectiveness of membership and the significant progress needed across Asian and global economies”, according to Bae.
AIGCC’s membership includes a number of global investors, such as Allianz, Blackrock, BNP Paribas Asset Management, Federated Hermes, and MSCI.
It also counts among its members a number of major Asian investors including Cathay Financial Holdings, Gunung Capital, Mitsubishi UFJ Trust and Banking, Shin Kong Life Insurance, Sumitomo Mitsui Trust Asset Management, and Tokio Marine Asset Management.
By Stian Reklev – stian@carbon-pulse.com
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