The firm of UN climate chief and former Bank of England chief Mark Carney sold farms in Brazil in connection with deforestation claims.
The move comes despite urging owners to fix climate-damaging assets rather than sell them.
Canadian giant Brookfield has cleared 9,000 hectares of the important Cerrado savannah region, according to analysis by campaign group Global Witness.
Brookfield said it made the decision to sell it several years ago and is working on ways to withdraw harmful investments.
Before the end of his tenure as Governor of the Bank of England, Canadian banker Mark Carney began to carve out a new role as one of the world’s leading advocates for action to combat climate change.
He was appointed UN special envoy on climate and finance in 2019 and in 2021 he helped launch the Glasgow Financial Alliance for Net Zero (GFANZ), a massive coalition of more than 500 financial institutions working on ways to decarbonise the economy.
He also has a lesser-known job. In 2020 he joined Brookfield, one of Canada’s largest companies with over $700bn (£5.8bn) in assets under management.
These range from energy and infrastructure to real estate and even music — the company recently bought the rights to a number of Whitney Houston’s songs.
Mr. Carney started out as vice chairman and leader of environmental change and this month was appointed chairman of the firm’s wealth management arm.
Brookfield’s collection of assets included 267,000 hectares in Brazil that produced soybeans, sugar, corn and cattle – and the management and divestment of that land appears to be at odds with the policies he advocates in his role as climate leader.
A report by campaign group Global Witness linked deforestation warnings from Brazil’s National Institute for Space Research to companies owned or controlled by Brookfield.
It is estimated that between 2012 and 2021 Brookfield’s subsidiaries cleared around 9,000 hectares on eight large farms in Brazil’s Cerrado region, a vast area bordering the Amazon rainforest.
The World Wide Fund for Nature describes the Cerrado as “the most biodiverse savannah in the world” whose conservation is essential to keep global warming below 1.5%.
According to Global Witness, the deforested areas were converted into soybean farms, which Brookfield sold in 2021.
The report estimates that deforestation in these areas has emitted 600,000 tonnes of CO2, the equivalent of 1.2 million flights from London to New York.
A Brookfield spokesman said: “Brookfield has made limited investments in the Brazilian agricultural sector over the past decade. The decision to sell these companies was made a few years ago because the fund they were held in was coming to the end of its life and we therefore had an obligation to return capital to investors.”
Global Witness alleges that this decision to sell clashes with public statements later made by Mr Carney, a world leader on climate action, urging companies not to sell climate-damaging assets, but to hold onto them and either rehabilitate them or shut them down close it down.
On October 24, Mr Carney told the House of Commons Environment Review Committee that “in many ways the easiest thing for an institution, when it’s exposed to coal or anything like that in an emerging market, is to sell it, walk away. What we want to do … is take responsibility for making sure the institution has a managed exit.”
Carney reiterated this view at the COP27 environmental conference in Egypt, saying at a panel on Forest and Climate Leadership: “You have to take the issue into your own hands.
Veronica Oakeshott, director of forest campaigns at Global Witness, said: “We believe Brookfield should have reforested this land rather than simply selling the logged farms.
“In order to achieve the climate goals and limit global warming to a maximum of 1.5 degrees, we absolutely have to stop deforestation. But we also need to turn them around.”
However, Brookfield argues that there was no way the vegetation could be restored without losses as the financial mechanisms to compensate were not in place – although they are part of the coalition at GFANZ working to develop them for the future.
“The debate on phasing out high-carbon assets is very new and most participants recognize that innovative forms of financing are needed to support the early retirement of such assets. Brookfield works with policymakers and financial institutions around the world to help develop this thinking. ‘ said the spokesman.
Mr. Carney’s role at Brookfield is to raise a $15 billion “transition fund” to invest in decarbonization projects such as renewable and nuclear energy and battery storage. Brookfield says it no longer holds any investments in mining, forestry or agriculture in Brazil.
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