RDCP: Deforestation exposure in liquid credit portfolios

21 minute read

This paper introduces a universe of credits, the Representative Deforestation Credit Portfolio (RDCP), deemed relevant for liquid credit portfolios seeking to manage deforestation exposure.

In the area of the fixed income markets, one particular task can be overwhelming: that of analysing nature loss in general, and deforestation in particular. Using the RDCP, alongside other AFII tools seeks to comprehensively address this issue.

Investors’ focus on deforestation and nature-loss is growing, and so is regulatory focus: the purpose of the RDCP is to allow investors to be ahead of that curve rather than being reactive to new developments.

Rather than pursuing a benchmark of ‘good’ or ‘bad’ exposures, the RDCP has been created as a basis for extended analysis and evaluation of the companies and securities that – based on the AFII Deforestation Score – are most relevant to global investors, in terms of deforestation exposure.