Domini Impact Investments is urging the California State Senate to pass legislation that would prohibit deforestation and mandate disclosure by state contractors and subcontractors. Investors representing $400 billion in assets have signed a letter supporting the bill.
Assembly member Ash Kalra (D-San Jose) introduced AB-572 California Deforestation-Free Procurement Act in mid-February. “If passed, all California state contracts involving forest-risk commodities, such as palm oil, soy, cattle, rubber, paper/pulp, and timber, would require their suppliers to have a No Deforestation, No Peat, No Exploitation (NDPE) policy,” Ash and the other co-sponsors explained at the time.
If all the contractors doing business with the state adopt an NDPE policy, that would ensure no deforestation of primary forests, areas of high conservation value, high carbon stock areas, or peatlands regardless of depth, the co-sponsors said.
In addition, they said the legislation would respect indigenous peoples’ rights to give or withhold consent for plantation operations, protect biodiversity, prevent endangered species poaching, and result in a progressive reduction of emissions on existing plantations.
Norway and France committed to implementing similar policies but currently no jurisdictions in the United States have this kind of requirement, the lawmakers added.
“Even though there are no tropical rain forests in California, our purchases contribute to their destruction, and we must take a stand to stop that,” Kalra said earlier this year. “A policy requiring an NDPE policy works to make our purchases more ethical, and our planet healthier.”
The commodities beef, palm oil, soy, and pulp and paper are the main drivers for forest loss according to Domini Impact Investments. Changing the policies and practices of large companies and large buyers can have a noticeable impact on rates of deforestation, especially in South American and Southeast Asian rainforests, the firm says.
California’s Assembly passed the bill and it will go to a Senate vote in September, Domini Impact Investments noted.
Corporations disclosing environmental data have largely been silent on deforestation, a CDP report published this week concluded. The nonprofit found that 70% of 1,500 companies failed to provide forest data last year.
“For too long corporations have ignored the impacts of their supply chains on the world’s forests and have not taken seriously the risks this poses — both to their business and the world,” said Morgan Gillespy, global director of forests at CDP.