brief INSIGHT by Nadine Cavusgoulu, COO and Managing Director, and Andrew Howell, Director

| The Alliance has published a research brief on Deforestation Risk in the Brazilian SoySupply Chain, in collaboration with its policy partner, ProForest. This brief was prepared to help investors understand, identify, and address Brazilian soy-related deforestation risks in their portfolios. Decades of growth in the livestock industry – where 75% of soy produced globally is used as feedstock – has driven a big expansion in soy production, much of it in South America, where parts of the land cultivation has expanded into forests, savannahs and grasslands. Soybean farming is considered by the World Wildlife Fund to be the second largest driver of deforestation globally, after beef production.

Companies in the soy supply chain are exposed to reputational, market, regulatory and operational risks stemming from the adverse environmental and social impacts of deforestation-linked soy. Furthermore, many downstream companies have zero-deforestation and conversion-free supply chain commitments that go beyond the minimum legal requirements set by the Brazil forest code. This exposes upstream companies to further market risk.

Given the ubiquitous nature of soy as an ingredient in the food supply chain, investors can be exposed to these risks not only through their holdings of grain producers and traders, but also through animal protein producers, food manufacturers, supermarkets and restaurant chains. Therefore, they should ensure best practices to manage these risks are being adopted across their portfolio companies.

In addition to mapping out the various issues related to soy production, the report offers a primer on Brazil’s complex forest code and an overview of various agreements and initiatives related to the soy sector. We also put forward several questions that investors should be asking companies exposed to soy, with respect to exposure, policy commitments, sourcing procedures, and disclosure.  

For more information on how the Emerging Markets Investors Alliance is working with emerging market asset managers and asset owners to increase sustainability in publicly listed emerging market companies and countries, please email ClaireMeier Underhill at

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