Aidenvironment Research on SLC Agricola Informs Continued Sustainability Debate in the Financial Sector

Despite growing awareness of environmental, social, governance (ESG) and sustainability issues, financiers continue to invest in unsustainable companies responsible for large-scale deforestation. Aidenvironment’s research into the sustainability practices of SLC Agricola, the largest listed soybean producer in Brazil, provides the company’s shareholders and other financial players with the actionable information they need to pressure portfolio companies to halt deforestation.

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SLC Agricola’s land clearing in Q1 2020 (Source: Aidenvironment GIS analysis based on SLC Agricola website data, deforestation alerts, and Sentinel 2 imagery)
SLC Agricola’s land clearing verified by research

Aidenvironment’s study was carried out in our capacity as part of Chain Reaction Research (CRR). Published in a 2017 report , Aidenvironment’s analysis found that SLC Agricola cleared a total of 39,887 ha of land. With ongoing monitoring through satellite imagery analysis and supply chain research, we reported on planned land clearance of 4,775 ha in 2018, continued clearing of 1,355 hectares in the Brazilian Cerrado in 2019, and more deforestation amounting to 5,200 ha in the first quarter of 2020. CRR coverage also reported how this can impact SLC Agricola’s financial bottom line and consequently investor earnings. Over 50% of the company’s revenues depend on a few large customers, including Cargill, Amaggi LD Commodities, and Bunge Alimentos, all of which have zero-deforestation commitments. SLC Agricola’s continued land clearing violates its customers’ sustainable policies and as a result it faces market access risk and potential revenue losses should its customers enforce these policies and cut ties with the company.

Investor divested from SLC Agricola

CRR research has increased investor awareness of SLC Agricola’s sustainability risks and its impact on earnings and fundamentals. In 2017, the Norwegian Government Pension Fund divested from SLC Agricola, possibly over deforestation risk as suggested in its 2017 annual report.

Debates on land clearing continued

The same research also informed NGO campaigns, investigative journalism pieces, and awareness initiatives of civil society actors. In May 2020, Global Witness produced a report calling out Odey Asset Management for its sizable stake in SLC Agricola. The article drew on CRR data, including reports on SLC Agricola’s land clearing and an assessment of Odey’s ESG policies. The article deepened long-standing debates on the legality of land clearing. Both SLC Agricola and Odey maintained that the company’s land clearing abides by existing regulations. Global Witness argues that legal protection for certain areas like the Brazilian Cerrado are weak (with a Forest Code that dictates only 20–35% of forests must be preserved), and any kind of land clearing is indefensible as it releases damaging greenhouse emissions with the loss of carbon stores provided by forests and native vegetation.

Increased investors pressure

Further responses from the media inspired continued debates on sustainability issues and deforestation risk. In the same period, the Financial Times released an article reporting on a Global Witness campaign that puts pressure on Odey Asset Management. Within days, a second article was published with a response from hedge fund manager Crispin Odey defending SLC Agricola, arguing that Ibama fines are small in the context of the company’s operations. These articles circulated in the global financial sector with further follow-on action. Among subsequent responses, a Brazilian journalist interviewed Aidenvironment to gain understanding of CRR data and its analysis of deforestation risk. This led to a Portuguese article on SLC Agricola’s deforestation risk targeting Brazilian investors.

“It is affirming to see the impact of providing credible, actionable information on deforestation risk”, said Tim Steinweg, consultant at Aidenvironment. “With CRR’s coverage, we made contributions to the work of NGOs like Global Witness, sparked debates that challenged European shareholders, and heightened the awareness on sustainability issues in the Brazilian investor space.”

CRR will continue to monitor and report on the deforestation risks of SLC Agricola and engage its shareholders to motivate positive investor action. CRR’s coverage and reporting on SLC Agricola is part of a NICFI-funded project titled “Integrating REDD+ objectives in investment decisions.”


For more information, please contact Tim Steinweg