A group of 30 investors led by Storebrand Asset Management have signed an open letter to Brazilian authorities demanding an end to deforestation in the country. The signatories, including investment management firms from 9 countries, state that they are particularly concerned that recent legislative trends in Brazil will lead to a further increase in the rate of deforestation.

While praising Brazil’s history of fighting deforestation while providing a favorable environment for business and investment, the letter decries recent increases in the rate of deforestation, and the dismantling of environmental and human rights policies and enforcement agencies. As financial institutions who must operate in the fiduciary interests of their clients, the investor group notes that these trends create uncertainty regarding investment conditions in the country.

The letter raises particular concern regarding Provisional Measure 910, legislation that has been submitted to the Brazilian Congress. The effect of the legislation would be to legalise past private occupation of public lands, mostly concentrated in the Amazon. According to the letter, “should the measure pass, it would encourage further illegal occupation of public lands and widespread deforestation which would jeopardise the survival of the Amazon and meeting the targets of the Paris Climate Change Agreement and undermine the rights of indigenous and traditional communities.”

The investor group similarly raises concerns regarding other reported examples of legislative proposals and movements towards environmental deregulation, impacting indigenous peoples’ territories in favor of mining companies, reducing environmental licensing requirements, and threatening public lands and forests.

The letter warns the Brazilian authorities of the consequences that these actions may have on the investment environment in the country, stating that they open up the signatories’ clients and investee companies to a broad range of reputational, operational and regulatory risks. They also caution that the risk profile of Brazilian sovereign bonds may deteriorate.

In order to enable continued investment in Brazil, the signatories call on authorities to take action to reverse these trends. As stated in the letter:

“We want to continue to invest in Brazil and help show that economic development and protection of the environment need not be mutually exclusive. We therefore urge the government of Brazil to demonstrate clear commitment to eliminating deforestation and protecting the rights of indigenous peoples.”

Commenting on today’s letter, and the need to target government authorities with demands to take action, Storebrand Executive Vice President Jan Erik Saugestad said:

“Developments in Brazil are not sustainable, neither for climate, biological diversity, nor the rights of indigenous peoples. We have worked for a long time to influence the companies that produce or trade in risk commodities. We demand that they have a strategy for reducing deforestation, both from their own businesses and suppliers, and that they monitor the impact on the rainforest over time. But we realize that it is not enough just to work up against the companies.”

Click here to see the letter and the full list of signatories.