European investors warn Brazil ambassadors about rising Amazon deforestation

A group of mostly European investment firms has sent a joint letter to Brazilian ambassors in ir countries to express concern over rising Amazon deforestation.

Storebrand Asset Manment, based in rway, collected signatures of a total of 29 companies, which include Legal & General Investment Manment Ltd, Sumitomo Mitsui Trust Asset Manment, and NN Investment Partners. Toger, companies have $3.75 trillion in assets under manment, according to a statement from Storebrand.

letter says “dismantling of environmental and human rights policies, are creating widespre uncertainty about conditions for investing in or providing financial services to Brazil.” It was sent on Monday to Brazilian embassies in rway, Sweden, France, Denmark, Nerlands, U.S and U.K. and requested start of dialogue to dress matter.

Brazil's President Jair Bolsonaro took office in 2019 with pledges to unlock riches of vast Amazon, and has repeatedly opposed large territories being controlled by Indigeus peoples. When Amazon fires rd last year, he first dismissed data from government ncy Inpe that showed ir magnitude, n fired Inpe's chief. He later improbably questioned wher environmental organizations h set blazes mselves to secure donations.

As a result of Bolsonaro’s environmental record, some members of European legislatures said y would vote against ratification of a free-tre deal between European Union and Mercosur customs union that includes Brazil, signed last June after two deces of negotiation.

letter from investors highlighted Brazilian bills to legalize occupation of public lands and to allow mining in Indigeus territories, as well as comments by Brazil’s environment minister, Ricardo Salles, that press being distracted by coronavirus pandemic provided an opportunity to slash red tape. Salles spoke during a Cabinet meeting in April, a tape of which Supreme Court released last month.

This year, with Amazon's so-called “burning season” fast approaching, Bolsonaro put army in charge of averting ar historic year of deforestation. During May, its first month of operations in rainforest, data showed that destruction jumped from prior month.

Deforestation grew 22% between January and May in comparison with same period of last year, Inpe said on June 6.

asset manrs stopped short of explicitly threatening divestment, but said y are worried deforestation and violation of Indigeus rights could pose risks to clients and companies in which y invest.

“Considering increasing deforestation rates in Brazil, we are concerned that companies exposed to potential deforestation in ir Brazilian operations and supply chains will face increasing difficulty accessing international markets. Brazilian sovereign bonds are also likely to be deemed high risk if deforestation continues,” letter says.

(Im credit: AP)