16 December 2022, London - As a senior figure in the leadership of Brookfield Asset Management, the UN’s Special Envoy for Climate Action and Finance, Mark Carney, oversaw the offloading of land deforested by the company that is also linked to human rights abuses, and "slave-labour like" working conditions, despite his own assertions that companies should rectify environmental damage before selling off.
Between 2012 and 2021, 9,000 hectares of forest, across eight Brazilian farms - equivalent to the size of 11,000 football pitches - was deforested by Brookfield to make way for soybean production. In addition to this deforestation - responsible for an estimated release of as much carbon dioxide as 1.2 million flights between London and New York - Brookfield’s farming operations were linked to the attempted eviction of an indigenous community, and breaches of laws against slave labour in the Cerrado.
Carney joined the company in 2020, following his tenure as Governor of the Bank of England, and oversaw the sale of these lands as Vice Chair and Head of Transition Investing. Carney has since been promoted to Chair of Brookfield’s asset management division. Brookfield has not publicly stated how much it received for the sale of these lands.
Selling off of these controversial farms stands in stark contrast with recent comments made by Mark Carney to British MPs in which he called on companies with environmentally damaging assets to be obliged to mitigate that damage before selling them.
Speaking to the UK Parliament’s Environmental Audit Committee, he said, “In many respects the easiest thing for an institution to do if they have exposure in an emerging economy to coal or something like that… is to sell it, is to walk away. What we’re looking to do, and we would like to be backed on this as opposed to attacked, is to have responsibility for the institution to have a managed phase out.” Carney reiterated this view at COP27 when discussing deforestation, saying, “You have to have ownership of the problem. Don’t divest your way out of the problem.”
Veronica Oakeshott, Forests Campaign Leader at Global Witness, said:
“We couldn’t have put it any better than Carney has done himself. Brookfield should have restored the forest it destroyed and compensated the community that lived under the threat of eviction for years. Simply walking away from a trail of destructive environmental and social impact, having profited from it, is not responsible, not ethical, and not the positive climate action required.”
“Despite the company’s great wealth and Carney’s championing of climate causes, Brookfield has fundamentally failed to avoid contributing to climate destruction. Companies’ green credentials, and those of climate champions, will rightly be judged on the action they take rather than just the words they say.”
Slash and Sell, the new report from Global Witness, used satellite imagery from Brazil’s space institute to identify the scale of forest clearance from 2012-21 on land owned by Brookfield. It found:
- Across eight farms owned by Brookfield in the Cerrado region, an area of forest the size of 11,000 football pitches was cleared for soybean production. This helped to destroy a crucial carbon sink and biodiversity hotspot, releasing an estimated 600,000 tonnes of CO2 into the atmosphere - equivalent to 1.2 million flights from London to New York.
- Brazilian state authorities produced documentary evidence that Brookfield had the legally required permit to carry out deforestation activity for only one of the eight farms.
- A Brookfield-controlled firm was fined $800,000 for slave labour offences at one of these farms, in a ruling upheld by a regional labour court in December 2021.
- Besides this environmental damage, Brookfield’s farming operations have been linked to the attempted eviction of indigenous people from their lands in the Amazon.
In addition to his role with Brookfield, Carney is the UN’s Special Envoy on Climate Action and Finance and was the UK Government’s lead advisor during COP26 last year in Glasgow. Carney is also the founder and co-Chair of the Glasgow Financial Alliance for Net Zero (GFANZ), which has urged its members to stop financing deforestation. Recent analysis by Global Witness found GFANZ asset managers and owners still hold investments worth $8.5 billion in companies exposed to deforestation despite their net zero pledges.
Carney’s employer, Brookfield, and its biggest banking backers HSBC, Deutsche Bank and Bank of America, all signed up to the Glasgow Financial Alliance for Net Zero (GFANZ) in April 2021.
”Protecting forests is an essential part of protecting the climate. If a company led by green finance champion, Mark Carney, is getting this wrong, it shows the current system of trusting companies to do the right thing on climate, including deforestation – a system which Carney himself leads through the Glasgow Financial Alliance for Net Zero - has well and truly failed.
“The experiences of Brookfield and the troubled alliance, GFANZ, is evidence that governments must act if we want to have any forests left standing at all. This requires legislation that outright stops investors contributing to the demolition of rainforests.”
Global Witness is calling for new laws to ensure international investors conduct due diligence to prevent them from knowingly bankrolling companies responsible for forest destruction, including through an amendment to the Financial Services and Markets Bill moving through the UK Parliament now. Last week, the EU agreed to landmark legislation to prevent the import of commodities grown on deforested land, and committed to evaluate the role of European financial institutions in driving global deforestation.