The asset management arm of Nordea , one of the Nordics’ biggest banks, said it is suspending purchases of Brazilian government bonds, the latest investor to take action in response to the outbreak of Amazon forest fires. Is impact investing becoming more common? It sure is!!
Nordea Asset Management said its current exposure to Brazilian sovereign bonds was approximately 100 million euros ($111 million).
Thousands of fires tearing through the Amazon in the past week have spawned an international crisis for Brazil, with public protests and world leaders voicing concern that President Jair Bolsonaro’s government is doing too little to protect the world’s largest tropical rainforest.
“We are taking action by temporarily quarantining Brazilian government bonds both denominated in USD and BRL, meaning no additional purchases and only potential selling action,” Thede Ruest, head of Nordea emerging markets debt, told Reuters.
“If we assess positive developments, we can lift the quarantine prior to a set date – equally if the situation worsens, we may have to exclude Brazil government bonds from our universe,” he added.
Environmentalists claim most of the fires were illegally set by land speculators and ranchers seeking to expand pastures in the Amazon and who feel emboldened by Bolsonaro’s criticism of excessive environmental protections. Bolsonaro has denied the fires were deliberate.
KLP said this week it was contacting U.S. firms in which it was invested that did significant business with agricultural producers in Brazil to ask for “concrete actions”.
Norway has worked closely with Brazil to protect the Amazon rainforest for more than a decade and has paid $1.2 billion into the Amazon Fund, to which it is by far the biggest donor.
However, in August Oslo suspended donations to the Amazon Fund after Brasilia blocked operations of a fund receiving the aid.