At Triodos Investment Management, we are deeply committed to reducing deforestation and forest degradation. Forests hold immense intrinsic value, playing a critical role in preserving global biodiversity, maintaining ecosystem services, sustaining indigenous cultures, supporting human health and addressing the climate crisis. Recent proposals in the European Parliament risk rendering the EUDR ineffective. As a result, European consumers may lose confidence that their imported food products are not contributing to global deforestation. This is especially concerning knowing that the loss of forests is one of the world’s largest sources of greenhouse gas emissions, and with research revealing that that for every minute the EUDR is delayed, a football field worth of forest is cleared. The delay and the dilution of risk categories do not help us investors to meet our nature targets and exposes our portfolios to financial and environmental risks.

The delay in the EUDR should be used to effectively help producers, especially smallholder producers in vulnerable supply chains, to become ready to comply with the regulation. We call on the European Commission and other stakeholders to invest more time and resources in enabling crucial stakeholders to comply with the regulation through technical assistance and capacity building. As highlighted in the investor statement, we urge the European Union to commit to implementing strong, clear and enforceable deforestation-free regulations without dilution or further delays.

Triodos Investment Management believes the EUDR should be more ambitious by including the financial sector. We have advocated this change since 2022, when the law was originally negotiated. Recent research by University College London showed that about 40.9% of financing associated with deforestation and ecosystem degradation in areas like Indonesian peatlands and the Brazilian amazon comes from Europe. These financial flows push ecosystems closer to critical tipping points. In solidarity with Europe’s food and materials trade, processing and distribution sectors, we believe that the financial sector should no longer be an unfair exception.