ESG data provider Iceberg Data Lab has unveiled a tool which lets investors measure the annual contribution of portfolio companies to deforestation. At launch, the new service will be able to provide data on the forest area destroyed per year by 3,500 listed firms, producing seven key commodities – beef, cocoa, timber, coffee, soy, palm oil and rubber – in 22 countries vulnerable to deforestation. By early January 2025, the tool will cover 8,000 companies. Iceberg Data Lab said its new tool studies the production of raw materials by country, aggregating country-specific data to calculate the contribution of companies to deforestation. This individual contribution is then weighted according to the certifications used by the company, with Iceberg independently judging the reliability, traceability, completeness and relevance of these. If a certification only partially considers the prevention of deforestation, a ‘mark-down’ is applied to account for residual deforestation risk, while any certifications found to be insufficiently transparent or reliable are excluded. The tool factors in production-related differences, noting that arabica and robusta coffee both consume a significant amount of water, but their effects on forests and local biodiversity differ depending on ecosystem. Because Iceberg measures the average deforestation rates by commodity and by country for a specific sector, the tool can compare a company with the sector average, and assess its performance compared to peers. At COP16 in Colombia, the International Union for Conservation of Nature reported that 38% of the world’s trees are at risk of extinction.
