The Institutional Investors Group on Climate Change (IIGCC) has published guidance on integrating deforestation into net-zero strategies and launched a platform to support investors looking to mitigate exposure to deforestation risk.

Its platform, called the Deforestation Investor Group (DIG), has been formed in alignment with the Global Stocktake goal to halt and reverse deforestation and forest degradation by 2030.

The guidance underpins the DIG and outlines practical steps for institutional investors to consider as they manage the financial risks presented by deforestation and land conversion.

The IIGCC’s Guidance on Integrating Deforestation into Net Zero Strategies is aligned with the Net Zero Investment Framework (NZIF) and provides potential actions across all six NZIF themes, including bespoke recommendations for each asset class.

Through the consolidation of existing principles, tools, and best practices, the guidance aims to help investors move from ambition to implementation.

The guidance recommended that investors start with five priority actions: Assess portfolio exposure to deforestation risk; develop a deforestation policy; integrate deforestation considerations into investment decision making; address material exposure through portfolio stewardship; and advocate for regulation and policies that curb deforestation, and scale deforestation- and conversion-free supply chains.

Meanwhile, the DIG is a platform designed to broaden the reach of investor action on deforestation by providing a platform for institutional investors to address deforestation risks.

It builds on the work of Finance Sector Deforestation Action (FSDA), with investors seeking to implement the guidance eligible to participate in quarterly meetings and join the DIG.

“Investors increasingly understand that deforestation can pose material financial risks to their portfolios and that steps to address these cannot be thought about in isolation from their wider climate strategies,” commented IIGCC CEO, Stephanie Pfeifer.

“The launch of today’s guidance and the DIG will help investors – no matter where they are on their journey – to take concrete steps, in their individual contexts, towards assessing and addressing the financial risks associated with deforestation into their processes and decision making.

“I’m delighted that IIGCC continues to demonstrate leadership and support members on this vital yet often overlooked climate-related topic.”

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