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Deforestation and
fixed income markets:
A primer

 

A new resource for fixed income practitioners is here, exploring how deforestation is changing the investment landscape.


This essential primer offers a practical perspective on what deforestation means for fixed income strategies and portfolio management. Packed with insights from the Anthropocene Fixed Income Institute’s research, the book offers readers a toolkit for addressing nature-related risks and themes in investment decisions.

Whether you are structuring portfolios, making allocation choices or engaging issuers, this primer will help you move forward as regulation, data and market preferences rapidly evolve. 
 

Who should read this primer?

This book is for portfolio managers, credit analysts, traders and investment strategists who want to understand how deforestation exposure impacts sovereign and corporate debt. It will benefit asset owners, policymakers and anyone seeking to understand the development of nature-linked finance.

Download the primer

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In this primer you will find:

Chapter 1: Introduction

  • Deforestation at the nexus of climate and nature
  • Financial materiality
  • Risks for fixed income investors
     

Chapter 2: Identifying deforestation exposure in fixed income

  • AFII's Deforestation Debt Universe
  • Applying the universe across a range of tools
  • Case studies: JBS, Mars/Kellanova, Marubeni


Chapter 3: Deforestation exposure and portfolio integration

  • ESG ETFs
  • ESG ratings
  • Index construction rules
  • Case studies: General Mills, Boparan


Chapter 4: Pricing of deforestation risk

  • European Union Deforestation Regulation
  • Deforestation exposure and risk of exclusions
  • Deforestation-free investment funds
  • Sustainability-Linked Bonds: a tool for transparency and accountability
  • Case studies: Soy producers, Cargill, Ahold, supermarkets

Chapter 5: The role of sovereigns and sovereign investors in deforestation

  • Financial materiality for government bond investors
  • Measuring funds’ alignment with the 30x30 target
  • Sustainability-linked debt for sovereigns
  • Transition linkers
  • Climate performance and the cost of capital 


Chapter 6: New structures in fixed income

  • Debt-for-nature swaps
  • World Bank Amazon reforestation outcome bond
  • Contingent resilience-linked (CORL) bonds


Chapter 7: Conclusions - from exposure to opportunity

  • Investor options
  • If you just do one thing…

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