IIGCC launches investor guidance and new platform to tackle deforestation risk

New guidance on integrating deforestation into net zero strategies and the Deforestation Investor Group (DIG) will support investors seeking to mitigate financial risks of deforestation. 

Institutional Investors Group on Climate Change (IIGCC) has today published guidance on Integrating Deforestation into Net Zero Strategies and launched the Deforestation Investor Group (DIG), a platform to support investors seeking to mitigate deforestation risk exposure, in alignment with the Global Stocktake goal to halt and reverse deforestation and forest degradation by 2030. The guidance underpins DIG and sets out practical steps for investors to consider as they manage financial risks from deforestation and land conversion.

Deforestation is responsible for approximately 11% of global carbon emissions and poses material financial, regulatory and litigation risks to investors with exposure. The new guidance and DIG provide practical tools and peer support to help investors manage deforestation, land conversion and associated human rights risks within their portfolios.

About the Guidance

The Guidance on Integrating Deforestation into Net Zero Strategies aligns with the Net Zero Investment Framework (NZIF 2.0) and provides actionable steps across all six NZIF component areas, with tailored recommendations for consideration for each asset class. It consolidates existing principles, tools, and best practices to help investors move from ambition to implementation.

The guidance is designed for investors at all stages of addressing deforestation, across asset classes. It was developed by a targeted IIGCC working group with input from FSDA members and wider consultation.

The guidance recommends 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
• Advocate for regulation and policies that curb deforestation and scale deforestation- and conversion-free supply chains

About the Deforestation Investor Group (DIG)

DIG is a platform to support investors in mitigating deforestation risks. It is designed to broaden the reach of investor action on deforestation by providing an accessible platform for investors at any stage of their journey to address deforestation risks, in alignment with the Global Stocktake’s goal to halt and reverse deforestation and forest degradation by 2030. 

DIG builds on the work of Finance Sector Deforestation Action (FSDA), which brought together over 30 financial institutions between 2021-2025. DIG is a platform for investors working across different initiatives and workstreams to share experience, strengthen engagement, and scale effective approaches.

Investors who are seeking to implement the Guidance on Integrating Deforestation into Net Zero Strategies (subject always to their individual contexts and client mandates) are eligible to participate in quarterly meetings and join the DIG.

IIGCC will hold a public webinar on 3 March to introduce the guidance, share four new investor case studies and outline DIG’s programme of work.

Investors interested in joining the webinar can register by emailing deforestation@iigcc.org. Webinar attendees will be limited to investors or other representatives from the financial sector.

Stephanie Pfeifer, CEO, IIGCC: “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. The launch of today’s guidance and the Deforestation Investor Group 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.”

Edward Mason, Partner and Head of Public Markets Engagement at Generation Investment Management: “Deforestation is a major contributor to the climate crisis and the destruction of nature. It creates material risk for investors at both company and system level. The new guidance and Deforestation Investor Group are the next steps in the mainstreaming of investor action on deforestation.”

Isobel Mitchell, Senior Responsible Investment Analyst, Church Commissioners for England: “We’re looking forward to continuing our work on deforestation through DIG. Deforestation is a systemic issue with material consequences for long term value. By integrating deforestation risks into our stewardship and net zero strategies, we are acting to protect the resilience of our portfolio.”

About DIG

The Deforestation Investor Group (DIG) is IIGCC’s investor platform to support investors seeking to mitigate the financial risks associated with deforestation. It provides capacity-building, tools, and peer learning to support investors wherever they are on their journey to address the financial risks associated with deforestation, land use change and associated human rights risks.

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About IIGCC

IIGCC is an investor-led membership organisation with 400+ members across 20+ countries. We bring the investment community together to navigate the risks and opportunities of the transition and support progress towards a net zero and climate resilient future.

We work with our members to create guidance, tools, frameworks and resources that can help them, in their individual contexts, to manage climate-related financial risk within their individual portfolios. Our work also supports investors to make the most of opportunities presented by the transition towards a decarbonised global economy and the realities of a changing climate.

Through our leading work, we help investors to navigate implementation of climate considerations in their individual portfolios, advocate for a more supportive policy environment, and provide them with the tools to undertake effective stewardship and engagement with companies, and the wider market.

More information at www.iigcc.org

Media contact

Sara Trett, Communications Manager, IIGCC

E: strett@iigcc.org