Standard Chartered has joined nine other banks in committing to helping prevent deforestation by cutting out businesses whose operations drive the practice by 2020.
The Soft Commodities Compact aims to align the banking industry with the Consumer Goods Forum’s resolution to help achieve zero net deforestation in their supply chains by 2020. By signing up Standard Chartered has committed to avoiding groups that cause permanent deforestation in fragile areas by the end of the decade.
The pact was developed by the Cambridge Institute for Sustainability Leadership (CISL). In total ten banks have now signed the pact, including Royal Bank of Scotland, Barclays and Lloyds.
According to CISL last year the volume of global palm oil production covered by corporate commitments to zero deforestation rose to over 90%. The organisation argues that the case for banks to support their consumer goods clients in implementing commitments that remove deforestation from their supply chains is “stronger than ever before” as a result.
Andrew Voysey, director of finance sector platforms at CISL, said, “On a daily basis we hear just how far the banking industry has to go to regain trust that it is serving society’s best interests.
“CISL’s work with banks focuses on enabling practical solutions. With the Soft Commodities Compact we are seeing new business norms and financing solutions emerge from the banking industry that help people and businesses respond to the global challenge of feeding a growing population without compromising the natural resources that communities all around the world rely on.”
Speaking to the Financial Times, Mark Devadason, Standard Chartered’s global head of sustainability, said, “We are dialling up the pressure to effect positive change.”
He continued that the lender already avoided companies that did not meet certain criteria and conducts audits to ensure principals are being adhered to.
“We’ve done that recently and that has resulted in some clients not being clients. But it has also led us to realise many of our clients have now embraced this opportunity to embrace positive change,” Devadason added.
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