THE Church Commissioners are yet to meet their 2025 target of eliminating their investments in “forest-risk agricultural commodity-driven deforestation activities”, to which they made a commitment at the COP 26 conference, in Glasgow, in 2021.
The companies in the Commissioners’ portfolio which are engaged in these activities refer to the production or use of forest-risk commodities such as palm oil, soy, beef, and pulp and paper, all of which can lead to deforestation.
The Commissioners’ report Spotlight on Deforestation, released on Monday, says that, by the end of 2024, 11 per cent of their public equity portfolio was represented by “companies identified as being exposed to forest-risk agricultural commodities”. Of that number, seven per cent are “companies without adequate DCF [Deforestation- and Conversion-Free] commitments”.
This is lower than the benchmark for “companies without adequate DCF commitments”, which is at nine per cent, according to 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 inspire action on the climate crisis”, said that they welcomed progress, but “more needs to be done.”
The Commissioners report that 99 per cent of the companies in their portfolio without adequate DCF commitments are “downstream companies”, including automobile manufacturers, packaged-food manufacturers, restaurants, home-builders, and home-improvement retailers.
The Commissioners say that “downstream companies are exposed to the transition and physical risks created by deforestation through their supply chains and can have a significant influence on upstream players through their purchasing power”.
The Commissioners’ report also acknowledges the lack of data on whether companies are involved in deforestation. Owing to “limited company disclosures, our data relies on assumptions, such as commodity sourcing volumes and locations. Our analysis . . . highlights those that operate within supply chains that may be associated with deforestation.
“Likewise, we consider companies as being exposed to forest-risk agricultural commodities even if these commodities represent a minimal component of their overall supply chain. Therefore, the figures presented do not reflect the portfolio’s direct exposure to deforestation, which is 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 have “begun engaging selected banks on the Finance Sector Deforestation Action banking expectations”.
According to the report, ten million hectares of forest, which are home to 80 per cent of the world’s terrestrial biodiversity, are lost on average each year — primarily because of human activity. The Commissioners say that “deforestation disproportionately impacts vulnerable communities through land rights conflicts, displacement and loss of livelihoods,” as 20 per cent of the world’s population “directly depend 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 global greenhouse gas emissions.”
Despite not reaching their targets, the Commissioners report that they have made methodical efforts through: formalising the way in which they assess and manage deforestation risk; aligning their processes, engaging with more than 25 companies, regulators, policymakers, and data providers through initiatives such as FSDA and NA100; integrating deforestation expectations into their voting policy, as well as beginning to vote against board chairs in companies 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 say, in addition to 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 could 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 line 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 transform unjust structures of society, to challenge violence of every kind and pursue peace and reconciliation, and to strive to safeguard the integrity of creation and sustain and renew the life of the earth”.
The report defines deforestation as “the loss of natural forest as a result 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 often assessed against a cut-off date, which is a specific point in time after which any deforestation is considered non-compliant with deforestation-free commitments. The most commonly used cutoff date is 2020.”
