New York, NY - Domini Impact Investments LLC led an investor coalition representing over $440 billion in assets under management to express strong support for the California Deforestation Free Procurement Act (AB 2002) reintroduced today by Representative Ash Kalra. Continued deforestation presents significant risks to the planet but also to investors and companies. The Act would leverage California’s purchasing power to mandate No Deforestation policies and practices at companies that do business with the state of California.
Forests play a crucial role in mitigating climate change; currently deforestation is the second largest source of greenhouse gas emissions. The Act would require that all companies providing the state with products containing “tropical forest-risk” commodities like palm oil, paper pulp, tropical timber, rubber, cattle and soybeans demonstrate that their production has not contributed to tropical deforestation. Further, covered companies would have to establish strict measures to protect forests and biodiversity, reduce emissions from plantations and respect the rights of Indigenous Peoples whose lands are considered for plantation development.
Many companies have stated goals to end deforestation in their supply chains and some have imposed deadlines as early as this year, yet progress has been slow. AB 2002 would work to the benefit of investors everywhere by creating a legal obligation for certain companies to end tropical deforestation in their supply chains.
“We recognize that forest loss creates risks for specific companies and for financial markets broadly. That’s why we actively engage with companies across our portfolios on deforestation to improve the sustainability of their business models. AB 2002 offers further incentives to companies implementing best practices,” said Corey Klemmer, Domini’s Director of Engagement.
Domini also supported the bill when it was first introduced in 2019. The California Deforestation Free Procurement Act as introduced today is co-authored by Senator Ben Allen, Assemblymember Richard Bloom, Assemblymember Eduardo Garcia, and Assemblymember Eloise Gomez Reyes.
Jeff Conant, Senior International Forests Program Manager, with Friends of the Earth, who has also been actively involved in supporting the Act, comments: “A good portion of the investment community recognizes that this destruction is not only disastrous for the climate and an affront to ethical business norms – it also represents systemic financial risk. Seeing this community get behind the California Deforestation Free Procurement Act should send a signal that defunding deforestation is good business.”
For a full list of the bill’s current supporters, see the press release issued by Assembly Member Ash Kalra.
Domini Impact Investments LLC is an SEC-registered investment adviser specializing exclusively in impact investing. Domini serves individual and institutional investors who wish to create positive social and environmental outcomes while seeking competitive financial returns. Domini applies social, environmental and governance standards to all its investments, believing they help identify opportunities to provide strong financial rewards to its fund shareholders while also helping to create a more just and sustainable economic system.
About Friends of the Earth
Friends of the Earth fights to protect the environment and create a healthy and just world. They speak truth to power and expose those who endanger people and the planet. Their campaigns work to hold politicians and corporations accountable, transform our economic systems, protect our forests and oceans, and revolutionize our food & agriculture systems