New investor-backed project will call on 200 companies to provide information on their forestry policies
Around 200 of the UK's largest companies are to receive letters from a coalition of investors requesting that they provide information on the impact of their operations on tropical forests and details of their policies for curbing deforestation.
The new Forest Footprint Disclosure (FFD) Project, which is being organised by NGO the Global Canopy Programme, was officially launched yesterday with £75,000 of government funding and the endorsement of 12 institutional investors with collective assets of over $1.3 trillion, including Aviva, F&C Investments, The Cooperative Asset Management, and Triodos.
Modelled on the Carbon Disclosure Project, which sits on the steering group for the new initiative, the Forest Footprint Disclosure Project will call on 150 FTSE 500 firms and 50 other companies with a likely impact on forestry levels to publicly report on their forestry policies.
The companies will be sent questionnaires requesting detailed information on their forestry activities and will be provided with guidance on how to calculate their "forest footprint" based on their supply chain's involvement in logging, farming or biofuel development.
The resulting information will be presented to the investors in the coalition, while an annual report summarising the findings will be released early next year, providing information on those companies that failed to respond and those that had the most effective forestry policies.
Karina Litvack, head of governance and sustainable investment at F&C, said that with new regulations and mechanisms expected to feature as part of any international climate change deal investors require an insight into companies' forestry activities if they are to accurately assess future business risks.
"Protecting forests is shaping up to be one of the cheapest, most effective ways to curb climate change, and so we anticipate that the Copenhagen negotiations will produce new mechanisms to price forest loss into supply chains," she explained. "Companies that rely on forest products will therefore have to develop effective processes to manage this, just as they do to other cost factors, and the FFD helps get them there."
Gareth Thomas, minister at the Department for International Development, which also has a place on the steering committee of the new project, urged businesses to respond to the requests for information.
"It is important that businesses seize the initiative and engage with the FFD Project so that they can understand the environmental impact of their business, " he said. "My challenge to businesses is to get involved with the project and then implement steps to reduce their forest footprint. I want to see companies taking the lead in the same way as many have done when reducing their carbon footprint."
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