Brazil - How much are the planet’s lungs worth?

Momentum for forest-rich countries to earn carbon credits from avoided emissions is gathering pace, according to F&C's latest reo report on environmental, social and governance (ESG) issues, released this week.

The report highlights that there is increased awareness amongst policy makers in Brazil and other countries about the urgency to take action to save the Amazon, the lungs of the planet.

Back in December last year, during the Poznan negotiations on a post-Kyoto agreement, F&C actively called for credible financial mechanisms to facilitate "avoided deforestation". Karina Litvack, Head of Governance & Sustainable Investment at F&C, said: "This global initiative is a vital complement to individual efforts in which F&C has participated to drive down CO2 emissions. Back in 2005, we encouraged companies sourcing soy for food or transport fuels to ensure their suppliers safeguarded valuable forests through effective industry initiatives". The initiative, she explained, occurred in the wake of McDonalds' and some commodity giants' call for a moratorium on sourcing soy linked directly to destruction of the Amazon, as well as the launch of a Roundtable on Responsible Soy Association to address illegal and unsustainable logging. Since then, other companies such as Brasil Ecodiesel and Petrobras have joined the roundtable.

"Several Brazilian utilities have recently endorsed a new code of practice that aims to promote high sustainability standards", commented Litvack. However, although F&C considers it a positive step, it also stresses that the code lacks clear guidance on managing local community displacement and human rights training for security forces.

"We encouraged hydroelectricity providers Tractebel Energia SA and AES Tiete to consult early with local communities and indigenous peoples on projects, particularly if relocation and compensation may be necessary", added Litvack.