Corporate Deforestation Impact data: A cutting-edge tool for Asset Managers, Asset Owners, and Banks. Deforestation has often been overlooked in financial decision-making, due to lack of data. With the launch of our new dataset on corporate impact on deforestation, Iceberg Data Lab aims to support ESG-conscious investors, asset managers, asset owners, and banks in better integrating biodiversity and deforestation risks into their investment strategies. This new dataset enables financial institutions to assess the deforestation impact of their portfolios, establish exclusion lists, and drive engagement efforts with companies that contribute to forest loss. By covering both Scope 1 (direct) and Scope 3 (indirect) deforestation impacts, it provides an unprecedented level of insight into corporate activities across global supply chains.
Why It Matters: The Financial Sector’s Role in Stopping Deforestation
Deforestation is not only an environmental concern but also a financial risk. With global regulatory frameworks like the EU Deforestation Regulation (EUDR), the Lacey Act (U.S.), and the UK Environment Act imposing stricter controls on deforestation-linked commodities such as soy, palm oil, beef, and timber, investors face increasing challenges. To navigate these changes, they need reliable tools to manage risk, support compliance, and adapt to evolving regulations and market expectations.
A Data-Driven Approach to Deforestation Risk
Iceberg Data Lab’s dataset is built on a rigorous, science-backed methodology that integrates:
- A comprehensive assessment incorporating commodity deforestation ratios, certification rates, and land-use pressures (Scope 1 & Scope 3) to provide a robust and insightful estimation.
- Coverage of 8,000+ companies, including listed companies, private firms, and real assets.
- Assessment of high-risk commodities, including soy, cocoa, palm oil, timber, cattle, rubber, and coffee across 22 countries.
Key Results:
Within IDL universe, 5 key sectors account for 89% of deforestation.
- Food (38%) – The food sector is the largest driver of deforestation due to agricultural expansion for crops like soy, palm oil, and cocoa. The demand for these commodities leads to large-scale land clearing, particularly in tropical forests like the Amazon and Southeast Asia.
- Paper & Forest Products (29%) – This sector directly impacts deforestation through logging and forest degradation. Unsustainable timber harvesting for paper, packaging, and wood products leads to habitat destruction, biodiversity loss, and carbon emissions.
- Construction & Real Estate (13%) – Urban expansion and infrastructure development drive deforestation by converting forests into residential, commercial, and industrial areas. The demand for wood-based building materials also contributes to forest loss.
- Retail & Wholesale (7%) – As a major consumer-facing sector, retail and wholesale play a crucial role in supply chain sustainability. They influence deforestation through sourcing policies for food, packaging, furniture, and other forest-linked products.
- Beverages (3%) – The beverage sector contributes to deforestation through raw material sourcing, particularly for coffee, and cocoa. These crops are often grown in tropical regions where deforestation for plantation expansion is a significant concern.
Deforestation is heavily concentrated in a few key sectors, with food, paper & forest products, and construction leading the impact. Addressing deforestation risks requires greater transparency, sustainable sourcing, and stronger regulatory alignment across supply chains. By taking proactive measures, businesses and investors can help mitigate environmental damage while ensuring long-term resilience.
For further details on our Corporate Deforestation Impact dataset and its applications, please click here or send an email to contact@icebergdatalab.com.
