Belém Investor Statement: Investors shouldn’t be advocating for companies to write their own laws 

At the climate COP in Belém, the role of finance in the ongoing devastation of the world’s remaining rainforests has continued to attract attention. Amidst a flurry of announcements and statements, came the Belém Investor Statement on Rainforests. Buried under some useful statements that governments, for example, should enforce their own laws or companies should know their own supply chains, the investor statement has some stark omissions. It is quite weak on human rights, Indigenous and local community-based forest protections, issues related to environmental human rights defenders and forest degradation. It also includes an alarming recommendation. It advocates that governments should “require” – i.e. adopt as regulation – the Taskforce on Nature-related Financial Disclosures (TNFD) on the basis of “transparency”. The TNFD is a set of recommendations – overseen by a taskforce of 40 corporations – as to how a company should report on its approach to, or impacts from, biodiversity.

This is alarming for several reasons. Firstly, few companies have published TNFD reports so there’s few examples as to what they actually include or exclude, and very few on forest-risk sectors. Secondly, a large cohort of rights-holder, environmental defenders and civil society organizations working on forest or biodiversity issues have raised profound concerns with, or directly opposed, the TNFD. Thirdly, TNFD’s advice on so-called “disclosures” largely focuses on aggregated, non-verifiable metrics or qualitative statements – rather than actual transparency and traceability. Fourth, almost half of the companies that served on the TNFD taskforce face serious environmental and human rights concerns, including greenwashing. Lastly, in advocating for governments to adopt a framework ultimately written by corporations – investors are essentially advocating for the right of corporations to write their own laws. This is deeply disturbing. 

What “transparency”?

In the Belém Investor Statement, investors called for governments to adopt TNFD reporting on the basis of “transparency”. Real transparency is vital given that those trading in, or financing, deforestation and related human rights abuses typically hide behind a veil of secrecy. 

This spans agribusiness traders who refuse to disclose their supplier lists, to banks who brag about their forest credentials while – in the same breadth – hiding what or who they finance in high risk sectors (for example, by refusing to write basic disclosure into their standard loan agreements). Additionally, a company – including financial institutions – report may talk at length about its forest and biodiversity commitments, while excluding mention of serious allegations that they are harming forests or the people who protect them. 

Three basic, high-impact transparency measures that can help address this include disclosing supplier lists, company-name reporting for banks (similar to existing project-name reporting) and grievance lists (listing serious complaints or allegations). This is already information that companies have and costs nothing except political will. Supplier and grievance lists have long been ingrained in key initiatives on palm oil and soy, and some country regulations on beef. 

The TNFD framework recommendations include none of these. 

In terms of an evidence-based approach to transparency, it’s hard to recall a single example where a company or financial institution, or its environmental auditors, were the first to expose serious environmental or human rights harm. 

In deforestation discussions, the function of transparency has therefore been to establish measures that allow a company’s activities and claims to be independently verified, including against realities on the ground. This promotes honest reporting and risk assessment through creating clear checks and balances. 

Knowing who a company is buying from, what it is financing and if local people are accusing it of harm is the fundamental basis informing every major media exposé or NGO report on deforestation over at least the last decade. For example, here, here, here or here. 

It’s unclear how investors plan to scout out deforestation without this information. 

The TNFD vs. transparency 

Not only is there no evidence that the TNFD shifts company behaviour, there’s little clarity of what a TNFD report even looks like. While the TNFD includes 14 recommendations for reporting, a company need only report against one to call it a “TNFD report”. The TNFD recommendations are frequently vague. The TNFD itself has no process to exclude companies that use their TNFD reports for greenwashing or misleading disclosures. 

The TNFD framework recommendations include four pillars. The pillars on “governance” and “risk assessment” are more process related. How does a company do its risk assessment? Who is responsible for it? Then there is a “metrics” pillar and a “strategy” pillar. 

Notably, on metrics, the TNFD: 

• Doesn’t recommend that companies report data on forest loss or land clearing. 
• Doesn’t recommend that companies report data on their land footprint. 
• Doesn’t recommend that companies report data on deforestation found in their supply chains.

In TNFD’s core metrics, that any sector can adopt, the only relevant recommended metric is one calculated from three separate figures, which themselves aren’t disclosed. This aggregated figure is drawn from a combination of land footprint, biodiversity clearing and rehabilitation (for example tree planting, or use of ‘offsets’, which have often been fraudulent). It is 100% unverifiable – enabling greenwashing or outright lying. 

The food and agriculture sector guidance includes an additional, but still vague, metric. It recommends reporting what “proportion (%) of production volume from land controlled, managed or sourced from that is determined to be deforestation- and conversion-free (DCF), by product.” Yet what is meant by this is not clear. Is this a company’s self-assessment? Is it the environmental auditors that rely on information it provides? From the third-party certification schemes that have a chequered history on identifying, and responding, to deforestation and forest conversion? (See more here, here and here). 

This is emblematic of the TNFD approach. Vague, convoluted, with no clear minimum standard and no way for claims to be verified. 

For companies committed to doing the right thing, publishing a TNFD report probably won’t hurt but its loopholes and caveats render it ripe for abuse by companies with the worst impacts on biodiversity. 

Biodiversity is invisible if not “material” 

The TNFD baseline for its “strategy” and “metrics” pillars is that companies should only report on factors that are financially significant (i.e. single materiality). Under the baseline, even a company that is knowingly contributing to deforestation isn’t expected to disclose this – unless it is financially significant to the company. Companies can choose to report beyond the baseline. 

This puts the TNFD in the rather extraordinary position for a voluntary initiative in that it is advocating for a lower baseline standard than that already in law. The TNFD’s baseline is weaker than legal requirements in one of the world’s largest trading blocks – the EU, and increasingly, what is expected in another, China – double materiality. This requires a specific caveat that if a company is legally obligated to go beyond the TNFD baseline, it should. 

The TNFD gives no minimum threshold for what is clearly covered under its baseline materiality approach. A rough analysis by Rainforest Action Network on agribusiness traders used a 10% impact as a rule of thumb minimum threshold at which materiality would be indisputable. While there are many producers and end-users of forest-risk commodities – markets are controlled by a handful of global traders. RAN’s analysis pointed out that many of the world’s most powerful traders are diversified, and that high forest-risk commodities of soy, palm oil and beef are less than 10% of their company group’s operational business. For ADM, Bunge, Cargill, Louis Dreyfus and Olam this appears to render it impossible for these forest-risk commodities to hit a 10% materiality threshold. Even for those that did, this would require 30%, 38% or 61% of their entire forest-risk supply chain to be impacted by deforestation AND for all this deforestation to be financially material (COFCO, Wilmar and JBS). While the analysis could be refined, its core findings are likely to hold. 

Additionally, even if a company volunteers to adopt double materiality reporting, the TNFD allows companies to pick, or make up, whatever methodology they choose. JBS – the world’s largest beef trader which some have described as a “nature villain” or among the worst companies on deforestation – has frequently refuted investigative journalist and NGO reports that show high levels of deforestation in its supply chain – by claiming that its own methodologies find far lower numbers (see here or here). Were JBS to adopt TNFD reporting, nothing would shift how JBS is reporting its existing data on deforestation. 

Additionally, TNFD doesn’t recommend that companies disclose grievance lists – that is a list of specific complaints. This means that companies are free to publish TNFD reports without any acknowledgement of specific allegations that the data or claims in those reports may be inaccurate, misleading or greenwashing. 

Taken as a whole, this is why some groups have described the TNFD as ‘the next frontier for greenwashing on nature’. 

The TNFD food and agribusiness sector guidance gives an example of the sorts of things a company could choose to report. Under its “strategy” pillar it gives the example of a company reporting that it is “implementing its policy”, “setting targets” or encouraging suppliers to be able to trace their supply chains. None of this equates to a company “showing” what it is actually doing or providing data that allows this to be independently verified. This also assumes that a company even considers deforestation a material issue. 

In 2024, a Banking on Biodiversity Collapse analysis of agribusiness trader Bunge’s TNFD report described that it “highlights internal operations and sustainability claims but omits key data, including full exposure to deforestation in the Cerrado, suppliers’ involvement in illegal land grabs, and displacement of Indigenous and Quilombola communities.” It concluded that an online search of the company would be more informative. 

The billions in financing from banks, investors or asset managers isn’t covered by the TNFD agribusiness sector guidance at all. 

Investors undermining forest defenders, forest communities and those bringing complaints against companies over deforestation. 

Particularly concerning about the Belém Investor Statement on Rainforests is that it disregards that while there are some large NGOs that support the TNFD, a far larger number of groups involved in forest protection have been vocally opposed to the TNFD. This includes the Global Forest Coalition, which has over 130 members in 75 countries. There is also the Forest and Finance coalition which has members on four continents, undertaking research and advocacy on casework, regulatory issues and corporate policies. At least three Goldman Environmental Prize recipients – the equivalent of a Nobel prize for environmental activism – have written of “profound concerns” with the TNFD. Rights-holder organizations, including the Indigenous Environment Network and the Women’s Earth and Climate Action Network, have been part of a formal complaint related to the TNFD. While the International Indigenous Forum on Biodiversity has provided feedback to the TNFD – this is not an endorsement of the TNFD, and elsewhere multiple Indigenous experts on finance or corporate accountability have critiqued it (here and here). The CBD Alliance – the leading forum for civil society organizations at global biodiversity negotiations – has been outspoken against it, including as an avenue to promote biodiversity offsets. Over 60 rights-holder and civil society organizations and networks whose members include over 270 organizations on five continents have expressed profound concerns with the TNFD. Many groups in years-long fights to press specific corporations, including financial institutions, to end their role in deforestation and related human rights harms have been particularly vocal against the TNFD. 

If those endorsing the Belém Investor Statement were unaware of this opposition, acknowledging this and stepping back from the statement would be most welcome. 

Investors shouldn’t be calling for corporations to write their own laws 

Whatever your view of the TNFD – and it’s distressing to have to spell this out – companies shouldn’t be in charge of writing their own laws. This violates fundamental principles of good governance as well as Article 7 of the landmark Escazú Agreement. 

The TNFD 2023 framework was ultimately decided on by a taskforce solely made up of 40 corporations. At least 45% of these face allegations of environmental and human rights harms. At least 1 in 8 face formal complaints of greenwashing. During their time on the TNFD, multiple companies have faced UN Special Procedures communications raising environmental or human rights concerns. 

A search of TNFD taskforce company groups in the Financial Exclusions Tracker shows that at least 1 in 8 face, individually, 20 or more investor exclusions. Collectively they face hundreds of investor bans. In the Belém Investor Statement, investors are calling for governments to adopt regulations written by companies that many investors themselves have banned. 

Discussions about regulations that impact biodiversity should centre the voices of those on the frontlines of protecting it. This should include Indigenous Peoples, grassroots women’s groups and environmental defenders, and also involve scientists and civil society organizations. They should be informed by an evidence-based approach on what works, or doesn’t, to shift corporate behaviour. 

While it’s uncomfortable to critique investors, especially those willing to speak out on forest issues, a hard truth is that it’s insulting and paternalistic to suggest that companies accused of greenwashing are more qualified to lead regulatory discussions than Indigenous Peoples. They, more than anyone else, have protected biodiversity for generations and often been the ultimate authors of change processes that have catalyzed whatever shifts corporations have made. 

An article in the journal Conservation Letters described TNFD as “corporate capture of public policy making”. Even the FT has stated that the TNFD shouldn’t be the basis of future regulations. 

Efforts to get the TNFD into national laws and international agreements that inform them are unrelenting. Already in Montreal in 2022, there were efforts to try to get the TNFD tied into the Global Biodiversity Framework – months before its third or fourth drafts were even written, and years before any evidence would show whether it worked or not. The bulk of the TNFD was written before the Global Biodiversity Framework and it directly contravenes core aspects of Target 14 and 15. 

Adopting the TNFD as regulation “locks-in” the standard set by companies with a very poor collective record on environmental and human rights outcomes – making it harder for the actual experts on forest protection to drive meaningful public policy. 

While TNFD claims to be “science-based” it is not evidence-led. It is not informed by any research that informs what does, or doesn’t, work to shift corporate behaviour. 

Investors are advocating for regulators to adopt the TNFD into regulations at a time where few companies have even produced TNFD reports, especially compared to other initiatives. 

TNFD’s early adopters and loud supporters include mining company Vale – whose environmental disasters have killed close to 300 people over the last decade and whose use of the TNFD for greenwashing is analysed in depth here. Another is MUFG – one of the largest bankers of fossil fuels and a significant banker of deforestation-linked industries. MUFG’s TNFD reports not only fail to substantively address these fundamental issues, it even boasts that TNFD is helping it to grow its consulting arm providing advice to others. TNFD taskforce member Ecopetrol has yet to produce its first TNFD report (planned for 2026), but has produced a PR video about its support for the TNFD and two pilot studies. Even without considering a whistleblower complaint to the SEC that alleges Ecopetrol hid environmental infractions, Ecopetrol has reported hundreds of oil spills a year, which environmental defenders allege are linked to mass fish deaths and the deaths of other wildlife. Together with the TNFD taskforce members themselves, this shows that companies facing allegations of environmental and human rights harm view TNFD as compatible with the status quo. 

Greenwashing undermines environmental defenders. They may work for years presenting evidence or testimony against a company, including banks, over their links to deforestation. Greenwashing conflates and confuses. The impact of real-world evidence is diluted by contradictory, dodgy data. Efforts to communicate a company as failing to act on forests are undermined when it is presented as a leader on nature. Greenwashing also distracts. Not only do environmental defenders have to fight the actual real-world impacts of the company – they now also have to work exhaustively to counter greenwashing. 

A catalogue of resources related to rights-holder and civil society concerns about the TNFD can be found here.