COP26 a chance to slow commodities-driven deforestation in Southeast Asia

highest rates, Indonesia, Malaysian Borneo, Climate change, COP26, Paris Agreement, US$100 billion annually by 2020, commodities-driven deforestation, soy, cocoa

The impact of deforestation in Southeast Asia is startling. The region continues to have among the highest rates of deforestation on the planet, having lost 14.5 per cent of forests over the past 15 years. From 2001 to 2019, the Philippines recorded 86 per cent of tree cover loss driven by deforestation.

In Indonesia, 74 million hectares of rainforest have been lost in the last 50 years, largely driven by the commodities sector. Meanwhile, Malaysian Borneo has lost forest cover twice as fast as the rest of the world’s humid tropical forests, fuelled by logging, land-clearing and conversion activities.

Southeast Asia exports 86 per cent of the world’s palm oil and 87 per cent of the world’s natural rubber and these plantations are projected to grow by over 4.3-8.5 million hectares to meet demand by 2024, further threatening forests in the region.

Nations most vulnerable to the impact of climate change have highlighted a “worrying lack of urgency”, in putting out a “Five-Point Plan for Solidarity, Fairness and Prosperity” ahead of the COP26 UN climate summit in Glasgow. The aims of the Paris Agreement have yet to be achieved and richer nations have not kept their promises on several key areas.

highest rates, Indonesia, Malaysian Borneo, Climate change, COP26, Paris Agreement, US$100 billion annually by 2020, commodities-driven deforestation, soy, cocoa

Cleared land at a palm oil plantation in Johor, Malaysia, on February 26, 2019. Photo: Reuters

COP26 is a critical juncture in the climate mission. Ahead of the meeting, over 100 developing nations, including the Philippines, have laid out their key negotiating demands, such as for rich nations to deliver on the commitment to provide at least US$100 billion annually by 2020 and through to 2025.

These highly vulnerable nations suffer disproportionately from the impact of climate change and discussions must look into the mitigation of such impact, the implementation of clear and transparent processes, and climate-related financing.

Conversations must also revolve around the issue of commodities-driven deforestation, which plagues the forests of many developing nations, threatening local biodiversity and livelihoods. Importantly, there will be no successful outcome at COP26 if it does not deliver for the most vulnerable across the full range of issues.

However, there are a few bright spots spurred on by the Covid-19 pandemic. Climate change is now high on the agenda, becoming a priority in Asia, and environment, social and corporate governance (ESG) considerations have become a major force driving business strategy. According to data company Morningstar, in the fourth quarter of 2020, ESG funds accounted for €100 billion (US$119 billion) of new money.

Meanwhile, governments have introduced plans and initiatives to combat deforestation, recognising their responsibility to break the link between trade in commodities and deforestation.

Consumer awareness of environmental issues has also been rising. What we are witnessing is the growing importance of climate change initiatives, such as deforestation agendas, for both the public and private sectors, which are aimed at meeting climate commitments and satisfying rising ESG scrutiny in financial markets.

An alternative method to combat deforestation is clearly needed. One example is the recently launched Rimba Collective, which aims to connect conservation funding with company operations.

The Rimba Collective seeks to create a self-sustaining and scalable financial mechanism that will invest in forest conservation and embed it as a cost of doing business. The initiative plans to provide US$1 billion to protect or restore 500,000 hectares of forest, supporting 32,000 individuals in forest communities in Southeast Asia over 25 years.

Disrupters like the Rimba Collective may be what the world needs to change the way that the commercially minded view forest conservation, turning the tide on those who have only seen biodiverse areas as barriers to growing farmland.

Comprised of buyers and processors of palm oil, the collective differs from other initiatives in providing a mechanism for the equitable sharing of responsibility and action by companies across the palm oil supply chain. The transparent mechanism ensures that investments and actions are linked to verified sustainable outcomes, and supports economic development and local job creation.

Importantly, the collective’s model has the potential to be replicated in other commodities sectors, such as soy, coffee and cocoa, which also affect tropical forests in developing nations.

Ultimately, to tackle the deforestation driven by the commodities sector and promote sustainable practices within the industry, we need mechanisms that directly connect the cost of doing business in tropical forest landscapes to forest protection and restoration projects that achieve a long-term impact on climate change, communities and biodiversity.

Stronger partnerships between the public and private sectors have the potential to bring positive change. Importantly, forest protection must be viewed as critical, as our failure to protect them could bring about irreversible climate change.

COP26 must move beyond the rhetoric and deliver significant progress. There must be a fundamental shift in how we view the production of commodities and the conservation of forests. Only then can change be lasting.

Michal Zrust is founder and director of Lestari Capital, a Singapore-based impact investment firm that developed the Rimba Collective

News Related


My transactions with the entities are genuine and legitimate, claims Abhay Bhutada in a letter

Abhay Bhutada, former MD, Poonawalla Fincorp Poonawalla Fincorp managing director Abhay Bhutada resigned from the non banking finance company (NBFC) on September 16, a day after Securities and Exchange Board ... Read more »

Latino philanthropy tackles Covid fallout while aiming to stem growing wealth gap

Hispanics in Philanthropy saw a drop-off from smaller donors while bigger ones picked up the slack to help small businesses, but the real challenge is staving off growing inequity. Read more »

Scholt Energy cancels listing in Amsterdam

The company had estimated this situation differently when it announced its stock exchange plans at the end of last month. Scholt Energy is an energy supplier that supplies gas and ... Read more »

High gas prices to complicate struggle against Nord Stream 2 in Europe, says expert

The growth of gas prices is due to objective factors, Simonas Vileikis believes Read more »

World Economic Forum will be held in Davos on January 17-21, 2022 — WEF

WEF annually holds meeting of leading business executives, political leaders and experts in various fields Read more »

Love Sex Education? There's a lot of PF Gyan you can take from it!

Sex Education | Coming on September 17 | The third season of Sex Education, a British comedy-drama television series about an insecure teenager Otis and his mother, a sex therapist, ... Read more »

Biocon Biologics, Serum Institute Life Sciences announce strategic alliance

Representative Image (AFP) The Board of Directors of Biocon Biologics Limited (BBL), a material subsidiary of Biocon Limited, on September 16 approved the merger of Covidshield Technologies Private Limited (CTLP) ... Read more »

Dutch festival giant ID&T in British hands

“With this deal, we have piloted the company into a safe haven,” says CEO Ritty van Straalen about the acquisition. Due to the corona crisis, the event sector, including festivals, ... Read more »

65% of 7,933 urban settlements do not have any master plan: Niti Aayog report

As many as 65% of the 7,933 urban settlements do not have any master plan. This leads to piecemeal interventions, haphazard constructions, urban sprawl, and environmental pollution, which can further ... Read more »

Zee board backs Ashok Kurien, Manish Chokhani

Zee Entertainment. Three days after Manish Chokhani and Ashok Kurien resigned from the position of Non-Executive Non-Independent Directors of Zee Entertainment Enterprises Ltd., the board of directors of the firm ... Read more »

World Bank discontinues business climate report after ethics review

The World Bank Group said on Thursday it has decided to discontinue publication of its “Doing Business” rankings of country business climates after a review of data irregularities in the ... Read more »

Banks' bad loan books to get cleaner with proposed bad bank framework, says experts

On September 16, Finance Minister Nirmala Sitharaman announced the setting up of a sovereign guarantee of up to Rs 30,600 crore for security receipts which will be issued by National ... Read more »

Bluesport Entertainment invests Rs 240 crore on upcoming Premier Handball League

Bluesport Entertainment Pvt. Ltd, the official license holders of the Premier Handball League (PHL) under the aegis of the Handball Federation of India (HFI), has announced an investment of Rs ... Read more »

For The First Time, Learn How to Create a Facebook Lead Ad Campaign

It can be intimidating to develop a Facebook Lead ad if you’ve never done it before. You’ll discover how to make your first lead ad campaign in this article. You’ll ... Read more »

Bad bank plan a welcome step, expect a gap-up opening for Bank Nifty tomorrow: Experts

The Union Cabinet’s decision to approve a government guarantee of up to Rs 30,600 crore for security receipts to be issued by National Asset Reconstruction Company Ltd (NARCL) is a ... Read more »

World Bank discontinues Doing Business reports — bank's statement

In June 2020, data irregularities on Doing Business 2018 and 2020 were reported Read more »

As Virat Kohli steps down as T20I captain, a look at what happened to brand Dhoni without captaincy

Virat Kohli Surpasses MS Dhoni To Register Most Test Wins As India Captain (Image: Reuters) The Board of Control for Cricket in India (BCCI) on Thursday announced that Virat Kohli ... Read more »

Climate change stopping soldiers from training, warns military's green tsar

Coldstream Guards training in Kenya – Anthony Upton The military’s green tsar has said climate change is stopping soldiers from exercises as it is increasingly “too hot to train”. Lt ... Read more »

Aukus pact – live: China says deal makes Australia ‘nuclear war target' as UK insists France relations ‘solid'

© Getty Images PRI196130752.jpg LIVE – Updated at 16:03 A senior Chinese military expert has said the newly-announced Aukus pact, which will see the UK and the US supply Australia ... Read more »

Avigna Industrial & Logistics Park to invest Rs 500-600 crore to develop a warehousing project in Karnataka

Expanding its industrial warehouses in the country, Avigna Industrial and Logistics Park, has ventured into Hoskote in Karnataka, with a 4 million sq ft Grade A warehousing facility and will ... Read more »

Yamal's gas production capacity 25% above planned — governor

At the same time, Dmitry Artyukhov continued, it is not clear whether gas production will grow next year Read more »

Ahmedabad Airport to be closed for runway repairs from January - May 2022

Sardar Vallabhbhai Patel International Airport, Ahmedabad. Image source: ANI Sardar Vallabhai Patel International Airport could be closed from 3rd January 2022 till May 31, 2022, from 9 am to 6 ... Read more »

How Picnic wants to conquer France and Germany with Bill Gates' millions

Just under two years after the previous investment round, online supermarket Picnic has again raised capital to continue growing. A group of old and new investors is investing 600 million ... Read more »

Gas price surge blamed for UK fertiliser factory shutdowns

Just a day after steelmakers reported disruption to production from soaring energy costs, it emerges that work has been suspended at two UK fertiliser plants. Read more »

A new defence alliance, fast fashion and the future of AI technology

Listen to “A new defence alliance, fast fashion and the future of AI technology.”. A new defence alliance could be a big financial blow for France – as Britain, the ... Read more »

Tobacco giant Philip Morris clinches shareholder backing for inhaler maker Vectura

PMI says the takeover is part of its "beyond nicotine" strategy and aim to become a "wellness" company - but critics fear it could see big tobacco wielding influence over UK health policy. Read more »

ASOS boss sets out sustainability goals

Read more »

John Lewis charters ships to navigate Xmas supply disruption and warns on price pressures

The retailer is no stranger to the sector's supply chain and hiring challenges in the run-up to the crucial Christmas season that seems set to see consumers facing tough spending choices as prices rise. Read more »

Fossil fuel firms sue governments across the world for £13bn as climate policies threaten profits

The majority of the cases are being brought under the Energy Charter Treaty, and are being hosted within the International Centre for The Settlement of Investment Disputes, a branch of the World Bank. Read more »

Why investors in three FTSE 350 firms are cheering the AUKUS security pact

Sky's Ian King says shareholders of Rolls-Royce, BAE Systems and Babcock clearly see hope of lucrative work arising from the sharing of information and resources under the deal. Read more »

Expert: Second Arktika-M satellite launch to assure entire Northern Sea Route coverage

The first special Arktika-M satellite was launched in February 2020 and another such satellite will be launched in 2023 Read more »

Defence Ministry issues SOP for faster verification of bank guarantees during acquisition process

Defence Minister Rajnath Singh The Defence Ministry on Thursday issued a standard operating procedure (SOP) that induces clarity in the steps a buyer has to take to verify bank guarantees ... Read more »

US market will surpass India's in the near future: MPL's Sai Srinivas

Indians love playing games on mobile phones, and home confinement during the pandemic has accelerated the trend. This has triggered a boom that helped Mobile Premier League (MPL), India’s latest ... Read more »

Google, Apple fail to explain their position to Russian senators

According to Deputy Head of Roskomnadzor Vadim Subbotin, the Apple representative was unable to explain the motive of the company’s actions and the Google representative had no power of appointment, so he was not questioned Read more »

Primark vows to make all clothing from recycled or 'more sustainable' materials by 2030

The fast fashion giant also promised to halve emissions, but environmentalists fear the plans are too light on detail. Read more »

Energy watchdog warns on 'record' prices as two more household suppliers fail

Ofgem warns households that gas prices are likely to be "high for some time" as an energy crunch threatens to push up bills further for customers whose fixed tariff deals are expiring. Read more »

NARCL a game-changer for India's bad debt resolution

The banking sector in India has played a pivotal role in the growth and development of the economy. By mobilising deposits and facilitating seamless credit flows, the banking sector is ... Read more »