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European investment funds marketed as “sustainable” continue to hold large positions in companies whose activities drive deforestation and fossil-fuel expansion, revealing a significant gap between their branding and actual financial flows. €9 billion in so-called green funds are effectively bankrolling activities linked to Amazon degradation, despite commitments under the EU’s Sustainable Finance Disclosure Regulation. Major asset managers have included fossil fuel and agriculture-linked firms in portfolios labeled as sustainable, raising concerns about widespread greenwashing in the financial sector. Critics argue that current ESG criteria are too weak or too loosely applied, allowing capital to flow to companies with business models at odds with stated climate and biodiversity goals. The investigation also highlights the lack of transparency in how funds define and screen for sustainability, which can mislead investors and the public. Calls for regulatory tightening and clearer standards are growing, as policymakers and civil society push for sustainable finance to align more closely with environmental outcomes.
FSC and Assurance Services International (ASI) announce the launch of the Teak Corridor transaction verification (TV) loop. FSC and ASI have conducted TV loops on FSC-certified high-value timber species like teak (Tectona grandis) in the past. The previous teak TV loop, along with other available information, indicate the possibility of integrity risks in the segregation of FSC-certified and non-certified teak in the supply chains.
Therefore, FSC recommends certificate holders with teak in their certification scope to apply additional due diligence in selecting their teak suppliers and following FSC rules to ensure that the teak products they purchase are legitimate and within the FSC certificate scope of the seller.
New research using Trase data shows that supply chain divergence to meet different consumer requirements already is a reality. Brazil’s exporters, for example, sell soy to Denmark and Norway that is four-times less exposed to deforestation than soy sent to China or used domestically.
The researchers interviewed companies from the Brazilian soy sector and confirmed such segmentation is both predictable and standard practice. While physical segregation of soy grains can be challenging, it has not been difficult for certain traders and regions exposed to very different levels of deforestation to specialise in markets that demand higher or lower levels of sustainability.
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