The Anthropocene Fixed Income Institute (AFII) has announced the release of its latest guide for investors, “Deforestation and fixed income markets: A primer”.
The book addresses the intersection of global deforestation risks and fixed income investing, providing a toolkit for market participants to assess and manage the evolving impact of nature loss across corporate and sovereign debt markets.
As deforestation threatens both biodiversity and climate stability, it has become a material risk for investors, the institute writes. Co-authored by Josephine Richardson and Claire Meier, the book draws on AFII research to show how deforestation exposure can impact fixed income investment returns, through regulatory costs, investor flows, and credit ratings, and features case studies on major issuers including JBS, Mars and Cargill.
Josephine Richardson, Managing Director, Head of Research, Anthropocene Fixed Income Institute, comments: “Deforestation increases risks for investors by destabilising supply chains, exacerbating climate change, and exposing both companies and countries to regulatory, reputational, and credit risks.
“With an area about the size of England lost in 2024 alone, our goal with this primer is to highlight how fixed income investors can use their influence to reverse this trend. AFII’s aim is to provide practical, actionable insights; we look forward to hearing the market’s feedback on the solutions we propose to address this urgent and critical issue.”
“Deforestation and fixed income markets: A primer” presents AFII’s comprehensive ‘Deforestation Debt Universe’, helping market participants identify and monitor entities with substantial exposure to deforestation, the institute writes. The book explores how portfolio managers can assess and integrate these risks within sovereign and corporate debt, and how engagement and innovative structures like sustainability-linked bonds and debt-for-nature swaps can promote better market outcomes.
Ulf Erlandsson, Founder and CEO, AFII adds: “Deforestation risk is still too rarely considered in investment analysis but it is essential for futureproofing portfolios and supporting resilience worldwide. As the world’s attention turns to Brazil for COP, we hope that asset owners and managers seeking solutions will find this book empowering.”
