Sustainable Investment Awards 2023

Thought leadership paper on sustainable investing, Latin America; ESG innovation of the year, research: Planet Tracker

Winning two awards for its research efforts this year, Planet Tracker demonstrated the investment risks of deforestation in Brazil and set out a financial markets roadmap for transforming the global food system..

The data-driven report entitled Destroying Brazil's Aircon won the research company the award for 'Thought leadership paper on sustainable investing, Latin America' and revealed how the destruction of the Amazon rainforest, a natural "air-conditioning" unit, at its current rate will have wide-ranging effects on Brazil's agricultural exports, energy security, and productivity.

Since the publication of the report, the finance community has become more active in pressuring the government of Brazil to end deforestation, Planet Tracker said.

"Planet Tracker's research was a key factor in raising awareness in the financial community of the risks inherent to complacency regarding large-scale deforestation," it said.

In November 2022, Uruguay issued a sustainability-linked bond for $1.5 billion targeting forest protection as well as reducing greenhouse gas emissions. "The sovereign issuer references Planet Tracker's work and used our framework as a model for this sustainability-linked bond," the non-profit said.

In the report, the authors aimed to highlight key risks and opportunities for investors, enabling them to make more informed decisions.

By advocating for the expanded use of sustainability-linked sovereign bonds, Planet Tracker hopes the report will provide a roadmap for investors to create meaningful impact in a critical area.

"The data and conclusions in the report brought to light the urgency for investors to consider the risks involved in deforestation," Planet Tracker said.

The report highlighted the implications for sovereign bond investors, as well as material risks to Brazil's wider economy, from regional climate change driven by continued deforestation.

Sovereign bond investors exposed to Brazilian bonds, and equity and credit investors and banks exposed to the domestic Brazilian companies, "will suffer from Brazil's climate becoming more hostile", Planet Tracker added.

Also winning the award for 'ESG innovation of the year, research', Planet Tracker's report on Financial Markets Roadmap for Transforming the Global Food System sets out steps for reaching a sustainable food system by 2050.

With an analysis of over 400,000 companies across 160 countries, the investor roadmap is the "largest and most credible" investor scheme for a sustainable food system, according to the non-profit.

The roadmap aims to provide in-depth accounting of the economic risks and opportunities for greater sustainability in the current food system.

It has six major targets for investors to implement in the short- and long-term, such as ending deforestation in food production, with recommendations for ways to achieve these goals.

One Sustainable Investment Awards judge said the "very high quality" report was valuable for its handling of a topic with insufficient attention.

"Excellent combination of background issue coverage together with practical applications for investors on a hugely important topic," they said.

The report uses a dataset that covers the whole food system, from production to retail, including Nestlé, McDonalds and Walmart.

"The report argues that while the global food system generates nearly 20% of the world's GDP, it is inherently fragile and no longer fit for purpose," Planet Tracker said.

"By the time food has reached consumers, one-third of all calories produced are lost or wasted. Therefore, to reach any of our global targets, pledges, and ambitions on climate, the food system must be transformed."