Newsletter: August
Canbury: Canada’s Boreal Forest
The boreal forest is land’s greatest carbon sink, and Canada’s boreal is the world’s largest intact forest. But for most responsible investors, the forest’s conservation is overlooked. Here’s why that needs to change, and what you can do to help.
For context, the boreal forest is a vast, cold-climate biome that stretches across the northern latitudes of North America, Europe and Asia. Canada’s forest supports a diverse array of biodiversity, including iconic species like caribou and grizzly bears, and during breeding months, more than 3 billion migratory birds. The forest’s diverse mosaic of slow-growth coniferous and deciduous trees provides a number of key ecosystem services, at a global scale (e.g. stabilising global climate as a carbon sink) and local scale (e.g. purifying water, mitigating the extent of fires).
However, the forest faces mounting threats, including invasive species, anthropogenic wildfires, unsustainable forestry practices, and industry expansion. While the Canadian government reports <0.02% deforestation, the statistic fails to capture the full picture of forest health. 85% of Canada’s forestry involves clear-cutting – a practice in which trees are almost, if not all, uniformly cut, removing the pre-existing diversity in age and complex ecosystem structure. Importantly, even when trees are replanted, the loss of old-growth and intact forest areas due to practices like clear-cutting decreases the forest’s biodiversity and resilience to other threats.
In terms of conservation, Indigenous Communities, who have lived in and stewarded the forests for millennia, are at the forefront of conservation efforts, after a long history of marginalisation in forest management decisions.
There are policies that protect and control the use of the forest such as the federal-level Species at Risk Act, in addition to provincial, and industry-related policies that influence the supply and demand of deforestation-related commodities.
Whilst Canada’s government has faced criticism for lobbying against international deforestation-related policies, the influence of industry trade associations and their corporate board members has not yet been highlighted – and this is where our research and investors come in.
At Canbury, we’ve conducted research into the lobbying activities of trade associations, and by extension, companies on key commodity-related policies. By assessing these companies’ engagement with these trade associations, we can gauge their influence – and consequently, the impact of investors who support these companies.
This October, PRI in Person, the world’s largest responsible investment conference, will be held in Toronto, Canada. This presents a once in a decade opportunity to bring the degradation of the boreal forest to the forefront of investors’ minds. Research, including our report, Laws, Lobbying and Links to Degradation in Canada’s Boreal will be presented at a side event alongside PRI in Person, and will include an in-person visit to the boreal.
The MSCI Sustainability Institute supports this project, and is conducting complementary research into the complex dynamics of Canada’s boreal forest degradation.
We are looking for additional investor partners to support and participate in our research. To find out how you can participate, email Emmy Shaw (emmy.shaw@canbury.io). Read our article in Responsible Investor here.
Our nature portfolio analysis
Next in our newsletter, we highlight our nature portfolio analysis – a collaborative effort we’ve taken with our asset owner and asset manager clients to comprehensively assess their nature-related pressures and dependencies, to ultimately inform their approaches and mitigate these risks.
Our approach supports clients in understanding and addressing their nature-related risks through actions such as company and manager selection, stewardship, and policy implementation. To achieve this, we deliver bespoke:
(a) data-sets, including portfolio and company-level heat-map reports,
(b) deep-dive company analyses, and
(c) training tailored to your team’s prior sustainability knowledge.
By integrating nature-related pressures and dependencies into decision-making processes, investors can better manage risks in their portfolio, become better prepared for evolving future regulations, and capitalise on the growing demand for sustainable finance solutions.
Taking a proactive approach not only mitigates potential negative impacts to a portfolio but can also position investors as leaders in the transition towards a more resilient and sustainable global economy.
Reach out to Ben Wilmot (ben.wilmot@canbury.io) to learn more about our approach to nature.
News: What the new UK government means for nature policy
Now that it’s been a few weeks – what’s the current and future picture for nature in the UK with the new labour government?
Labour’s pre-election campaign included several important commitments around nature and climate, including a Countryside Protection Plan, which aims to set aside 30% of the UK’s land and seas for nature by 2030, and create three new national forests. Labour also plans to promote sustainable farming, ban harmful pesticides, tackle water pollution, and enhance public access to natural spaces.
Secretary of State for Environment, Food and Rural Affairs, Steve Reed, has prioritised ‘ensuring nature’s recovery’ among his top five goals for Defra. Early actions have been aimed at resolving the ongoing crisis in the water sector.
For investors, these developments are worth watching as we address the increasing risk of nature degradation and biodiversity loss, which are emerging as key macro-critical threat. These policy changes may create new opportunities and risks in sectors like agriculture, real estate, and utilities. The focus on sustainable farming, banning harmful pesticides, and tackling water pollution could influence market dynamics and investment strategies.
Labour’s environmental policies are also linked to international commitments, such as the Kunming-Montreal Global Biodiversity Framework. These agreements aim to halt biodiversity loss and promote sustainable resource use, and could create a regulatory environment that investors must navigate carefully.
Canbury is uniquely placed to support investors in understanding and adapting to these policy changes. In addition to our nature-portfolio analysis, we provide investors and NGOs with policy horizon scanning, policy briefings, and policy analysis, combining our AI and public policy expertise.
For a deeper dive into Labour’s direction for nature and its implications for investors, read our full article here, or reach out to Lucy Hussona (lucy.hussona@canbury.io) to further discuss.
To discuss our work on the boreal forest, or any other area of our service provision, get in touch. If you’re in London, we’re based in Covent Garden and we would be happy to host you.