Deforestation poses material financial risks to companies and investors through physical, transition, legal, reputational and systemic impacts. These expectations set out a practical framework to help companies eliminate deforestation and associated impacts from their operations and supply chains, supporting long-term value creation and credible climate and nature transition plans.
Developed through consultation with IIGCC's Deforestation Investor Group and aligned with leading frameworks and accepted market practice, this paper provides a practical stewardship tool for investors engaging companies on deforestation. It is built on the technical foundation of the Accountability Framework initiative (AFi) and draws on guidance from investor, policy and standard-setting organisations.
The paper outlines the following five key expectations:
The company sets a public commitment to production and sourcing that is free from deforestation and associated impacts, and to respecting human rights.
The company assesses its operations, sourcing, and financing for deforestation and associated risks.
The company transforms and manages its operations and supply chains to ensure they are free from deforestation and associated impacts.
The company positively participates in collaborative actions and engagements that protect landscapes from deforestation and associated risks.
Each year, the company publicly discloses its progress towards production and sourcing that is free from deforestation and associated impacts.
Together, these expectations position action on deforestation as a core component of governance, strategy, risk management, metrics and targets, supporting alignment with frameworks such as IFRS S2 and TNFD.