Huge swathes of tropical forest and grasslands across Brazil are ablaze, and recent satellite data suggests this year will see record fires in the Amazon, the world's largest tropical rainforest. This is a disaster for the climate, with vast quantities of carbon being released into the atmosphere, and it has severe implications for wildlife and precious ecosystems. It also has health impacts for communities, with smoke spreading over wide areas - adding to air pollution and exacerbating health conditions at a time when COVID-19 is already causing devastation across Brazil.
Why is this happening again?
Burning season in the Amazon occurs from July to September every year. Fires are deliberately lit to clear vegetation on farmland or after loggers have deforested an area, often illegally. Once deforested land has been cleared, it can be used for cattle ranching, or sold for mining or to speculators. The equivalent of 172,000 football pitches were burned in August 2019.
Is this year as bad as last year?
Figures published recently by Brazil’s National Institute for Space Research suggest that this year’s fires will be bigger still. The agency said it had recorded a total of 6,803 fires in the Amazon in July 2020, compared to 5,318 in the same month last year.
It is no coincidence that this year has also seen the highest level of deforestation in the Brazilian Amazon in the last decade. In the 12 months to the end of July 2020, 9,200 km2 of forest were destroyed, up from 6,800km2 the previous year.
And it is not only the Amazon. Fires are also burning in the Cerrado, Brazil’s unique savannah and forest biome, and the Pantanal wetlands where an area of grassland nine times the size of Rio de Janeiro has already been destroyed by fire.
The Brazilian government announced a 120-day moratorium on burning in the Amazon in July, but aerial footage suggests that this has had little impact on the ground.
What are the main drivers of this deforestation?
The biggest driver of deforestation in the Amazon is cattle ranching, with Brazil’s cattle sector estimated to account 81% of deforestation in the Brazilian Amazon and 54% in the Cerrado.
Trase estimates that 1.1 million hectares of land were cleared in the Amazon and the Cerrado to make way for cattle ranching for beef and leather in 2018.
But conversion for pasture is often only the first stage, as land is often later converted for more profitable soy crops. Brazil is the world’s largest producer and exporter of soy - with global exports doubling in the last decade. Trase estimates that soy is the biggest indirect driver of deforestation in Brazil.
Some 20% of Brazilian beef is exported to global markets, and around 80% of Brazilian leather is exported. The Brazilian leather trade was valued at US$1.44 billion in 2018.
Which consumer markets are most exposed?
China is the biggest global market for Brazilian soy, beef and leather, while the European Union (including the UK), Russia, Iran and Egypt are also significant importers.
More than two thirds of the Brazilian beef exported to China is sourced from the Amazon and Cerrado regions, where the fires are burning following deforestation. According to Trase data, imports of beef to China were linked to over 40,000 hectares of deforestation in 2017.
The European Union is the second biggest market for Brazilian soy, with some of this soy sourced from the Matopiba region in Brazil where some of the highest rates of direct deforestation for soy are found.
What action should companies and financial institutions be taking?
Companies buying Brazilian beef, soy and leather from areas where the fires are burning - whether directly, or indirectly from manufacturers and processors - risk their supplies being linked to the devastation that has taken place. To address this risk, they should engage with their suppliers and push for deforestation-free supplies. Tools such as Trase can help identify areas where there is a risk of deforestation - research shows that this risk is largely concentrated in just a few areas.
Financial institutions are also exposed. But they can mitigate the risks from companies in their portfolios by setting out expectations that companies should be taking steps to reduce their deforestation risk. Financial institutions should set clear policies to engage with companies to ensure this is the case.
What does this have to do with me?
We are all unwittingly contributing to the demand that drives the deforestation that results in the fires - with beef, soy and leather used in the food we eat, and the bags and shoes we buy. Even our pensions and investments may be helping to fund the companies involved.
In both the UK and in the European Union, politicians are considering new legislation to require companies to carry out due diligence to ensure their supply chains are deforestation-free.
Individuals can tell companies, their pension fund and their political representatives that they want their products to be deforestation-free. Global Canopy’s Forest 500 assessment provides a guide to the most influential companies in forest-risk supply chains - and shows which companies are implementing policies to avoid deforestation in their supply chains.
Image: Amazon forest fires, ©WWF Brazil