The UK Government’s Global Resource Initiative Finance Report, authored by Efeca on behalf of the GRI Taskforce, provides crucial recommendations for the UK government, aimed at ensuring financial institutions take proactive steps to address the risks associated with deforestation and land conversion linked to their lending and investment activities.
This report is accessible on the gov.uk website alongside the original GRI Final Recommendations Report (March 2020).
Recognising and building on the urgency of addressing nature and climate-related disclosures, the report outlines an ambitious but pragmatic two-step approach to achieving this:
Step 1: Recommending as a first step that the Government introduce a legal requirement for the finance sector to apply the same principles of due diligence that will be asked of supply chain companies (under the current due diligence obligation within the Environment Act 2021), to ensure no investment or lending benefits from or supports illegal deforestation
Step 2: As a second step, raising the bar for both the finance and supply chain sectors to prohibit use, investment or lending in forest risk commodities that cannot be shown to have been produced legally and sustainably.
The recommendations laid out in the Global Resource Initiative Finance Report reflect a proactive strategy to enhance corporate responsibility and transparency in the finance sector, ultimately driving sustainable economic growth while safeguarding natural ecosystems.
This framework not only supports the UK Government’s broader environmental agenda but also sets a precedent for international best practices in sustainable finance regulation. Through collaborative efforts between government, financial institutions, and stakeholders, these recommendations aim to create a resilient and sustainable financial system that prioritises environmental protection and societal well-being.