Iceberg Data Lab Launches Tool Enabling Investors to Assess Portfolio Deforestation Impact
Environmental data provider Iceberg Data Lab (IDL) announced the launch of a new tool, aimed at enabling investors to measure their deforestation impact of companies, or the surface of forest which is destroyed by their activity each year.
The tool currently covers 3,500 listed companies in the world, producing seven sensitive raw materials – beef (livestock), cocoa, timber, coffee, soy, palm oil and rubber in 22 countries prone to deforestation. By early January, the tool will cover all 8,000 companies that the firm has assessment data for, IDL said.
Matthieu Maurin, Founder and CEO at Iceberg Data Lab, said:
“Our new deforestation tool at Iceberg Data Lab not only allows asset managers to assess the impact of deforestation on their portfolios, but also to make investment decisions – either via exclusions or by leading shareholder engagement to improve company practices. In turn, this allows them to redirect financial flows towards virtuous companies and ultimately help the planet in the fight against deforestation.”
According to IDL, the new tool studies the production of raw materials by country, as well as the varying effects of deforestation from one country to another. For example, for coffee production, arabica and robusta coffee plants require specific agricultural techniques and fertilizers and consume a significant amount of water. Yet the effects on forests and local biodiversity are different depending on the ecosystem. This country-specific data is aggregated by the tool to calculate the contribution of a company to deforestation. The contribution is then weighted according to the certifications used by the company.
IDL independently judges the reliability, traceability, completeness and relevance of these certifications, by verifying if the certifications aim for “zero” deforestation, the firm said. If a certification only partially takes into account the prevention of deforestation, a mark-down is applied to provide for residual deforestation risk. All certifications that do not provide enough transparency or reliability are excluded, the firm said, adding that the tool also measures the average deforestation rates by commodity and by country for a specific sector, which makes it possible to compare a company with the sector average, and assess its performance compared to peers.
In April, IDL announced that it had raised $10 million at the first close of its Series A funding round, with proceeds aimed at supporting the company’s expansion and to strengthen its product offerings.