Investor statement in support of the European Union Deforestation Regulation (EUDR).

The Investor Policy Dialogue on Deforestation (IPDD) is an initiative led by institutional investors seeking to collectively engage with governments to take action to curb deforestation. The IPDD was launched in 2020 and currently has the support of 82 financial institutions from 21 countries, representing approximately US$ 11 trillion in assets under management.

As investors, we recognise that deforestation poses substantial risks to many companies and countries, their related securities, and therefore the instruments in which we invest. We have a fiduciary responsibility to address these financial, reputational, operational, legal and regulatory risks.

We support the case for and the passage of effective regulation to combat the supply and demand forces that contribute to deforestation, and have previously expressed support for the European Union Deforestation Regulation (EUDR). While recognising that new legislation is always disruptive and can have some unintended consequences, we believe the EUDR is an important development whose introduction should not be delayed.

We would like to see the European Parliament reject the European Commission’s proposal for a 1-year delay.

We are particularly concerned by recent suggested amendments that would extend the delay in the EUDR’s introduction and undermine the content of the legislation. We see no justification for a delay of more than a year, which would further disadvantage countries and companies that have moved promptly to prepare for the new requirements. We also would not want to see traders exempted from the EUDR’s requirements, since they are key participants in the supply chains that need to be monitored.

The final broad group of proposed amendments seek to introduce a new category of ‘no risk’ countries, which we consider to be unnecessary and potentially counter-productive since the ‘low risk’ category already allows for light-touch monitoring but keeps supply chains under scrutiny. In the event that the European Commission’s proposal for a 12-month delay is approved, we urge EU policymakers to ensure that this period is used to improve traceability, implementation and compliance regimes.

Jan Erik Saugestad ,CEO Storebrand Asset Management states:

"We are particularly concerned by recent suggested amendments that would extend the delay in the EUDR’s introduction and undermine the content of the legislation, in particular traders exempted from the EUDR’s requirements, since they are key participants in the supply chains that need to be monitored".