The retail and food and beverage sectors are among the worst-performing industries for putting deforestation commitments into practice, CDP has said in its annual Forest Report.
Other industries in the spotlight include agriculture, manufacturing and materials, it added.
The climate NGO's report states that just one in ten firms are taking action to address deforestation, adding that an area the size of Switzerland was cleared from the planet's rainforests last year.
Improved Transparency
CDP did add, however, that this year saw a record-breaking number of companies disclose forest-related risks, which it said was 'encouraging' from a transparency standpoint.
It noted that while more than 60% of companies are disclosing 'some kind of risk' caused by deforestation, 90% are not prepared for the transition to a 'deforestation-free future'. Less than 10% have a 'robust public commitment' to end deforestation by 2025.
CDP said that inaction on this issue 'makes no economic or environmental sense', noting that the annual economic gain from a deforestation-free future is estimated at $895 billion (€823 billion) by 2030, with the biggest driver of that gain being a reduction in environmental costs of $440 billion (€404.8 billion) a year.
It called on financial institutions to incentivise companies to act, adding that deforestation presents considerable financial, regulatory and reputational risks for investors.
Read More: Investors May Exit Consumer Goods Firms Over EU Deforestation Law
Net-Zero Society
"Deforestation has no place in the net-zero, nature-positive world science and society are demanding," said Thomas Maddox, global director, forests and land use, CDP. "Achieving it is a matter of ‘when’, not ‘if’. Companies acting now will reap the benefits of the opportunities. Companies acting later will face the highest costs.
"Financial institutions driving this action now will be future-proofing portfolios for what is inevitable. Financial institutions acting later will miss out on opportunities and risk stranded assets and significant financial losses."
The CDP's full report can be found here.
Read More: European Parliament Backs Ban On Goods Linked To Deforestation
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