THE Church Commissioners are yet to fulfill their 2025 goal of eliminating their investments in “forest-risk agricultural commodity-driven deforestation activities”, to which they made a commitment on the COP 26 conference, in Glasgow, in 2021.
The corporations within the Commissioners’ portfolio that are engaged in these activities consult with the production or use of forest-risk commodities resembling palm oil, soy, beef, and pulp and paper, all of which may result in deforestation.
The Commissioners’ report Spotlight on Deforestation, released on Monday, says that, by the top of 2024, 11 per cent of their public equity portfolio was represented by “corporations identified as being exposed to forest-risk agricultural commodities”. Of that number, seven per cent are “corporations without adequate DCF [Deforestation- and Conversion-Free] commitments”.
This is lower than the benchmark for “corporations without adequate DCF commitments”, which is at nine per cent, in line with the Forest IQ data for the Commissioners’ public-equity portfolio as of 31 December 2024.
Operation Noah, a Christian charity that “works with the Church to encourage motion on the climate crisis”, said that they welcomed progress, but “more must be done.”
The Commissioners report that 99 per cent of the businesses of their portfolio without adequate DCF commitments are “downstream corporations”, including automobile manufacturers, packaged-food manufacturers, restaurants, home-builders, and home-improvement retailers.
The Commissioners say that “downstream corporations are exposed to the transition and physical risks created by deforestation through their supply chains and may have a major influence on upstream players through their purchasing power”.
The Commissioners’ report also acknowledges the shortage of knowledge on whether corporations are involved in deforestation. Owing to “limited company disclosures, our data relies on assumptions, resembling commodity sourcing volumes and locations. Our evaluation . . . highlights people who operate inside supply chains which may be related to deforestation.
“Likewise, we consider corporations as being exposed to forest-risk agricultural commodities even when these commodities represent a minimal component of their overall supply chain. Therefore, the figures presented don’t reflect the portfolio’s direct exposure to deforestation, which is more likely to be substantially lower.”
The report says that banks are excluded from their assessment, “because their approach to assessing and managing deforestation risk differs from that of other corporate entities”. Yet, they’ve “begun engaging chosen banks on the Finance Sector Deforestation Action banking expectations”.
According to the report, ten million hectares of forest, that are home to 80 per cent of the world’s terrestrial biodiversity, are lost on average annually — primarily due to human activity. The Commissioners say that “deforestation disproportionately impacts vulnerable communities through land rights conflicts, displacement and lack of livelihoods,” as 20 per cent of the world’s population “directly rely on forests to support their livelihoods”.
Their report highlights the impact of deforestation on climate change as “forests absorb carbon when intact but release it when cleared, accounting for around 11% of worldwide greenhouse gas emissions.”
Despite not reaching their targets, the Commissioners report that they’ve made methodical efforts through: formalising the best way through which they assess and manage deforestation risk; aligning their processes, engaging with greater than 25 corporations, regulators, policymakers, and data providers through initiatives resembling FSDA and NA100; integrating deforestation expectations into their voting policy, in addition to starting to vote against board chairs in corporations without adequate DCF commitments; and investing in 1400 acres of land for woodland creation and habitat-restoration initiatives.
They already “sustainably manage” their 85,000 acres of forest land across the UK and the United States, they are saying, along with their current leasing of 2200 acres of farmland to Wildlife Trusts or farm tenants supported by conservation charities.
Operation Noah’s campaign director, Clare Fussell, said that her organisation was “pushing for more transparency about church land”, and that more progress may very well be made by “investing in nature-based solutions”, particularly by supporting such initiatives on land owned by the Commissioners.
“We are hoping that the Commissioners’ long-awaited ‘Nature Strategy’ will set more ambitious targets for these areas in step with international targets of conserving 30 per cent of land for nature by 2030,” she said.
The Commissioners credit their environmental commitments to being a faith-based investor, guided by the Anglican Communion’s Fourth and Fifth Marks of Mission “to remodel unjust structures of society, to challenge violence of all types and pursue peace and reconciliation, and to strive to safeguard the integrity of creation and sustain and renew the lifetime of the earth”.
The report defines deforestation as “the lack of natural forest because of this of either conversion to agriculture or other non-forest land use; or conversion to a tree plantation; or severe and sustained degradation”.
It says that deforestation “is commonly assessed against a cut-off date, which is a particular time limit after which any deforestation is taken into account non-compliant with deforestation-free commitments. The mostly used cutoff date is 2020.”
