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New data on the financing of commodity traders, such as Minerva, a major exporter of Brazilian beef, links deforestation risk to global investors

Deforestation increasingly poses reputational, equity and credit risks for investors, as 

​ and market expectations change. Trase Finance offers new levels of transparency on the financing of forest risk commodity traders.

, one of the big three meatpackers ​​that 

dominate Brazilian beef exports along with JBS and Marfrig​

. In 2019, nearly a third of Minerva’s revenues came from its Brazilian beef exports. Trase Finance data shows these exports were associated with 21,763 hectares of deforestation risk, leaving it with the second highest deforestation risk linked to Brazilan beef.

. Several major global investors hold a stake in the company, including Morgan Stanley (4.94%), BNP Paribas (2.26%), Vanguard (2.21%), BNY Mellon (0.78%), BlackRock (0.4%) and Robeco (0.39%). Their stakes in Minerva leave them exposed to equivalent shares of the company’s deforestation risk.

Trase Finance also shows how these shareholders score on deforestation commitments and policies. BNP Paribas 

 for its commitments and action to tackle deforestation, based on the latest 

 of the most influential companies and financial institutions in forest-risk supply chains. Morgan Stanley 

 who each score four percent. Vanguard is the bottom performer, with a 

This new level of transparency to the financing of commodity traders linked to deforestation risks enables financial institutions to 

understand and assess their risk exposure

. It also enables them to see how they perform on deforestation commitments relative to their peers. Moreover, increased transparency puts pressure on financial institutions to tackle their deforestation risks, as their exposure becomes increasingly visible to all market players and observers.

Image: Aerial view of two fields, Dominik Martin, Unsplash