Investors managing $9.5 trillion urge deforestation elimination by 2030

A coalition of 86 institutional investors managing $9.5 trillion, convened as the Net-Zero Asset Owner Alliance, released guidelines urging the elimination of deforestation from portfolios by 2030. As EUDR raises investor accountability, Indian companies exposed to forest-risk commodities face heightened scrutiny over supply-chain disclosure.

A coalition of 86 institutional investors managing a combined $9.5 trillion, the UN-convened Net-Zero Asset Owner Alliance (NZAOA) including Allianz SE and the California Public Employees' Retirement System, released guidelines on halting deforestation. The Alliance calls on investors to evaluate and reduce exposure to forest-risk commodities including beef, cocoa, soy, palm oil, timber, and rubber, aiming to phase out deforestation and forest conversion from supply chains by 2030. Deforestation remains the second-largest driver of global greenhouse gas emissions after fossil fuels, with forests absorbing roughly a third of global carbon emissions annually.

The guidelines affect investors, companies, policymakers, and data providers exposed to forest-risk commodity supply chains. The report highlights systemic financial risk from ecosystem degradation, warning that unchecked deforestation can disrupt value chains, diminish carbon sinks, and trigger irreversible ecological tipping points. Companies are urged to commit to eliminating deforestation from supply chains and align public-affairs strategies, policymakers to phase out harmful subsidies and implement mandatory reporting, and data providers to offer high-quality, actionable data to track and manage deforestation-related risks, integrating nature into financial risk frameworks.

Indian companies and investors exposed to forest-risk commodities should follow the Alliance's four-step pathway: assess portfolio exposure to deforestation and associated human-rights abuses; set 2030 targets to phase out deforestation risks; engage companies, asset managers, and policymakers through stewardship; and disclose actions, risks, and progress using measurable indicators. With deforestation a central theme at the upcoming COP30 summit in Brazil and EUDR raising accountability, entities should prepare measurable disclosure and align portfolios and supply chains with net-zero targets.

Key figure — Coalition scale: 86 investors managing a combined $9.5 trillion in assets