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| - Investment funds managing close to $4 trillion in assets called on Brazil Tuesday to halt deforestation of the Amazon in an open letter warning that biodiversity loss and carbon emissions from the practice posed a "systemic risk" to their portfolios. The managers from countries across Europe, Asia and South America expressed their fears that the government in Brasilia was using the COVID-19 crisis to push through environmental deregulation that could "jeopardise the survival of the Amazon". "We are concerned about the financial impact that deforestation and the violation of the rights of indigenous peoples may have on our clients and investee companies, by potentially increasing reputational, operational and regulatory risks," the letter said. While lockdowns linked to the coronavirus pandemic are likely to see the world's carbon emissions fall several percentage points, increased deforestation in the Amazon could actually increase Brazil's annual contribution to global warming. Environmentalists warn 2020 is on track to be the most destructive year ever for the world's biggest rainforest, with even more losses than in devastating fires that triggered a global outcry last year. A total of 829 square kilometres (320 square miles) in the Brazilian Amazon, 14 times the area of Manhattan, was lost to deforestation in May alone, according to satellite data from Brazil's National Space Research Institute (INPE). That was a 12-percent increase from last year, and the worst May since record keeping began in August 2015. Activists accuse Brazil's President Jair Bolsonaro, a far-right climate change sceptic, of emboldening those responsible for deforestation with calls to legalise farming and mining on protected lands. The fund managers, who collectively control more than $3.75 trillion worth of assets, urged Bolsonaro's administration to show "clear commitment" to reducing deforestation and to protect indigenous rights. Seiji Kawazoe, from Japan's Sumitomo Mitsui Trust Asset Management -- one of more than two dozen firms to sign Tuesday's open letter -- said avoiding negative impacts from climate change had become a prime concern of the holding. "The Amazon is one of primary areas of rainforest which impacts the global climate and we joined the letter to call for urgent action from the government to avoid taking actions that have a negative impact on climate change," he told AFP. Most of the signatories are members of the Investor Initiative for Sustainable Forests, which engages firms that are exposed to deforestation by their investments in soy and cattle production. Funds represented in the letter include Britain's LGPS Central, France's Comgest, and KLP, Norway's largest pension fund. "As financial institutions, we see deforestation and the associated impacts on biodiversity and climate change as systemic risks to our portfolios," they wrote. pg/rl
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