Financial Institutions Use CDP Forest Data to Drive Deforestation Engagement

A set of case studies from CDP's Forest Champions Programme shows how financial institutions including SMBC, Etica Funds, Green Century and Manulife Investment Management are using CDP forest data to conduct risk assessments, engage investees and develop sustainability-linked financial products. Companies disclosing through CDP have collectively identified over US$16 trillion in climate and nature-related opportunities.

Sumitomo Mitsui Banking Corporation linked its four-year sustainability-linked loan to KAO Corporation's CDP climate, forests and water scores, with a preferential rate triggered by achieving an A score in at least two of the three categories. KAO received triple-A scores across all three categories in 2023, and has achieved 97 percent FSC-certified pulp products. SMBC also provided Nippon Yusen Kaisha with a US$600 million loan tied to its CDP environmental performance score, demonstrating the growing use of CDP disclosure data in structuring financial incentives linked to real-economy sustainability outcomes.

Etica Funds, a signatory of the Finance for Biodiversity Pledge, uses CDP forest data to identify priority companies for engagement on forest-related target-setting, with a focus on landscape approaches that deliver environmental and economic benefits at scale. Green Century, one of the first fossil-free mutual funds in the United States, uses CDP forests data to support shareholder advocacy campaigns focused on no-deforestation commitments, particularly in beef and soy supply chains. JGP, an independent Brazilian asset manager, has used CDP data and the TNFD LEAP pilot framework to assess and engage portfolio companies on forest and nature-related risks.

Manulife Investment Management, which oversees more than CAD$657 billion in assets across 18 geographies including ten Asian markets, uses CDP Forest Champions programme tools to conduct in-depth issuer analysis and portfolio-level deforestation risk assessments. The firm's coverage across Asia is particularly relevant as deforestation risk commodities including palm oil and timber are heavily concentrated in the region. CDP's forests dataset is expected to grow in importance as TNFD-aligned reporting requirements and the ISSB's nature-related standards develop, providing financial institutions with the standardised data needed to fulfil emerging disclosure obligations.

Key figure — US$600 million SMBC loan to Nippon Yusen Kaisha linked to CDP environmental performance scores