July 7, 2020 / 4:31 PM / a month ago

Brazilian companies join call for action on Amazon deforestation

FILE PHOTO: Smoke billows from a fire in an area of the Amazon rainforest near Porto Velho, Rondonia State, Brazil, September 10, 2019. REUTERS/Bruno Kelly/File Photo/File Photo

BRASILIA (Reuters) - A group of 39 companies, including several of Brazil’s largest firms, expressed concerns over deforestation in the Amazon rainforest on Tuesday, following global investor demands that President Jair Bolsonaro end the destruction or risk divestment.

While weaker than the threats from the global investment firms, the joint statement is the first from such a broad and powerful group of Brazilian companies since Bolsonaro became president, and signals that corporate pressure for action is building within the country.

The rate of destruction of Brazil’s Amazon rainforest climbed 34% in the first five months of the year from a year ago after hitting an 11-year high in 2019, government data shows.

Environmental advocates blame the expanding destruction on Bolsonaro, who has weakened environmental protections and called for more mining and farming in the Amazon region while also deploying the military to fight clear cutting and fires.

The signatories on the statement include many of Brazil’s largest listed companies, such as the bank Itau Unibanco (ITUB4.SA), miner Vale (VALE3.SA), brewer Ambev (ABEV3.SA), and state-owned electric utility Eletrobras (ELET6.SA).

Regional or Brazil chiefs for international companies also signed on, including oil firm Shell (RDSa.L), Microsoft (MSFT.O), agrochemical maker Bayer (BAYGn.DE) and commodities trader Cargill.

Seven major European investment firms controlling more than $2 trillion told Reuters last month they will divest from Brazilian assets if they see no progress on stopping Amazon deforestation.

Tuesday’s statement did not include an ultimatum, but said the companies were available to work with the government to devise solutions. Strong enforcement of environmental laws is necessary, the companies said.

“This group has been increasingly attentive to and concerned about the impact on businesses of the current negative perception of Brazil’s image internationally when it comes to the social and environmental issues in the Amazon,” they said.

Reporting by Jake Spring and Ana Mano; Editing by Sonya Hepinstall

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