Senators press asset managers for details on managing deforestation risks

Eight U.S. senators are pressing asset managers and owners to ensure their portfolio companies are doing enough to address global deforestation.

The letters were sent Monday to the top executives of California Public Employees' Retirement System, Sacramento, as well as BlackRock (BLK), Vanguard Group, TIAA-CREF, J.P. Morgan Chase, Prudential Financial, Fidelity Investments, Northern Trust and several others.

Addressing risks from deforestation "is in line with your fiduciary responsibility. As such, we are interested in learning what due diligence and risk management procedures your firm has put in place to address and mitigate these risks for both active investments and passively managed funds," the senators wrote, asking for written responses by March 1.

The inquiry is being led by Sen. Brian Schatz, D-Hawaii, who co-chairs the Senate Climate Action Task Force. Other Democratic senators signing the letter were Sheldon Whitehouse of Rhode Island, Tom Udall of New Mexico, Elizabeth Warren and Ed Markey of Massachusetts, Jeff Merkley of Oregon and Richard Blumenthal of Connecticut, as well as Bernie Sanders,independent from Vermont.

"The fact that leading members of the Senate Climate Action Task Force and the Senate Banking Committee are now pressing the nation's top investment firms on their approach to managing deforestation risks should be seen as a very big deal," said Jeff Conant, international forests program manager for advocacy group Friends of the Earth. "It shows that awareness of the financial sector's ties to forest destruction has hit the political mainstream."