Trase Finance brings transparency to more than $1 trillion in deforestation financing
New open-source data platform shines light on the deforestation risk facing more than 12,000 financial institutions who invest in or lend to companies trading Brazilian beef, Brazilian soy and Indonesian palm oil.
London/Stockholm, 7 October 2020: For the first time, interconnected data on corporate ownership structures, and the direct and indirect financing of deforestation, can all be found in one place. Trase Finance, an initiative of Global Canopy, Stockholm Environment Institute and Neural Alpha, launches today, enabling financial institutions to clean up their portfolios and improving accountability in this area of high environmental and social risk.
Trase Finance will be formally launched at a public webinar on 28 October where panellists from the finance sector and civil society will discuss some of the most powerful insights being generated by this new wealth of data. From today, the platform is freely available for use by journalists and organisations, as well as those working in the finance sector.
Trase Finance covers the financing of commodity traders exporting Brazilian beef, Brazilian soy and Indonesian palm oil, and will expand to cover the financing of other commodities mapped by the Trase initiative - which is set to expand to cover more than half of the volume of globally traded soft commodities by 2021.
Sea wave made of money. Credit: Viaframe / Getty Images.
It enables financial institutions to systematically identify their exposure to deforestation-risk through their financing of commodity traders. And it allows civil society, governments and regulators to strengthen accountability of financial institutions by assessing their exposure to deforestation risks and monitoring progress against policy commitments.
Exports of Brazilian soy alone are estimated by Trase Finance to be associated with 50,000 hectares of deforestation risk, which can be traced to $379 billion of equity investments, $250 billion held in bonds, and $160 billion of loans. The tool identifies the specific financiers of the commodity trading companies and enables users to understand their deforestation risk.
Toby Gardner, Director of Trase and Senior Research Fellow at SEI, commented: "Data is the foundation for robust risk management. We are extremely pleased to have launched Trase Finance which allows financial institutions to now take more concrete steps towards tackling the risk in their portfolios, while also continuing to push companies and investors to improve disclosure to close remaining data gaps."
Following a three-month testing phase, Trase Finance is now ready to be used by sustainability and investment analysts, credit and risk managers, and portfolio and client relationship managers on due diligence, portfolio monitoring and product innovation in addressing deforestation risk.
“Trase Finance is an innovative and important step forward in enabling financial institutions to better identify and manage deforestation related risks in their portfolios,” said Oliver Kumaran, Group Sustainability, Group Strategy and Design at CIMB Group.
“The launch of Trase Finance marks a break-through in soft commodity supply chain transparency, tracing and revealing not just companies back to places of production but also the banks and investors that finance them,” added Vermund Olsen, Senior Policy Advisor, Rainforest Foundation Norway.
For further questions, please contact:
Annebeth Wijtenburg, Communications Lead, Finance Sector, Global Canopy
email@example.com |+31642291086 | @globalcanopy
Ylva Rylander, Press Officer, Stockholm Environment Institute (SEI)
firstname.lastname@example.org | +46-731 503 384 | @SEIresearch
Trase | Trase Finance
Trase is a science-based supply chain transparency initiative, built around an open-access information platform www.trase.earth. Trase is a partnership led by the Stockholm Environment Institute (SEI) and Global Canopy. It uses a unique approach to mapping agricultural supply chains that combines customs, shipping, tax, logistics and other data to connect regions of production, via trading companies to countries of import. Trase Finance is the latest offering from the Trase initiative and extends to mapping of commodity supply chains and risk exposure to assess patterns of company ownership and financing. https://trase.earth | https://trase.finance | @TraseEarth
Global Canopy is a data-driven think tank that targets the market forces destroying nature. We work with partners around the world to mobilise the data needed to make supply chains and finance more transparent and sustainable. Our unique data platforms enable companies, investors and governments to identify their impacts on tropical forests and other vital ecosystems, and to take action accordingly. www.globalcanopy.org | @globalcanopy
Stockholm Environment Institute
Stockholm Environment Institute (SEI) is an international non-profit research and policy organization that tackles environment and development challenges. We connect science and decision-making to develop solutions for a sustainable future for all. Across our eight centres in Europe, Asia, Africa and the Americas, we engage with policy processes, development action and business practice throughout the world. www.sei.org | @SEIresearch @SEIclimate
Neural Alpha are a Sustainable Fintech Software Development & Data Consultancy specializing in developing bespoke ESG investing platforms. Their Software Developers, Data Engineers and Data Scientists specialize in applying the latest Connected Data, Machine Learning and Big Data research to address sustainability challenges in finance such as deforestation and decarbonization. Neural Alpha works closely with many of the worlds’ leading Banks, Asset Managers and NGOs to develop software platforms to make thought leadership a reality in ESG investment screening, sustainable finance research, risk & portfolio management. https://neuralalpha.com | @NeuralAlpha