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Check out recent news releases from Deforestation Free funds.

Overview

Deforestation Free Funds is a search platform that enables people to find out if their money, in the form of individual investments or an employer-provided 401(k), may be causing tropical deforestation through investment in companies that produce, consume, or finance palm oil - the fastest growing cause of rainforest destruction today.

Palm oil is far from the only commodity that drives tropical deforestation, and over time we hope to expand the tool to cover other industries that cause rainforest destruction. Deforestation Free Funds begins with palm oil because the unsustainable expansion of this industry is particularly noted for causing social conflict and human rights abuses in tropical countries, driving endangered species to the edge of extinction, and driving Indigenous Peoples off their land. We also begin with palm oil because the last few years have seen significant recognition by the palm oil sector that it needs to scale back its destructive impacts on forests and forest-dwelling people. Similar efforts are desperately needed to rein in the impacts of other forest-destroying commodities like cattle, soy, sugar, timber, and paper and pulp.

If it were up to you, your money wouldn’t be used to finance rainforest destruction. But owning investments in palm oil and other destructive commodities isn’t just a moral question. As more of us recognize that the global climate cannot afford more rainforest destruction, investments in destructive palm oil companies will carry real financial risks. Already, many consumer brands are making efforts to drop palm oil producers that destroy forests and violate human rights, and the market is demanding better practices. By bringing more transparency to the palm oil producers, consumer brands and lenders within the chain of destruction, we hope to keep pushing this trend forward.

Deforestation Free Funds empowers investors to know exactly what they own, to see if their savings are invested in dirty palm oil, to pressure fund managers to implement sustainable investment policies, and to find investment options that support a forest-friendly future.

It is important to note that not all palm oil producers are guilty of the same abuses, and not all consumer brands that use palm oil are directly linked to the worst tropical deforestation. Some companies are making real efforts to reduce the harm that this industry causes – and the goal of Deforestation Free Funds is to help make this happen. But industrial palm oil production generally relies on destructive practices and the risk of forest-destruction is ever-present. By driving transparency in the industry’s financing, we hope to encourage policies and practices that bring about real change.

401(k) retirement plans

For many of us, the majority of our investments are in 401(k) plans offered by our employers. These 401(k)s invest entirely mostly through mutual funds and exchange-traded funds (ETFs). But those funds can invest in a wide array of securities, and it’s not always easy for investors to investigate what’s inside the funds they own. You can spend hours poring over mutual fund prospectuses, and still not fully grasp everything your 401(k) is invested in. Your retirement money may be invested in economically and morally risky palm oil producer companies.

To see what Friends of the Earth recommends you do to ensure your 401(k) is not destroying tropical forests, see Friends of the Earth’s Deforestation Free 401(k) How to Guide.

Because large asset managers and institutional investors are the ultimate decision-makers about how the money they manage is invested, Friends of the Earth is asking institutional investors and asset managers to take responsibility by disclosing their investments in palm oil, committing to Deforestation Free policies, excluding companies that do not meet these policies’ criteria, and repairing the damage by investing only in companies that have strong human rights grievance mechanisms and that practice ecological restoration. To learn more about Friends of the Earth’s campaign to urge institutional investors and asset managers to go Deforestation Free, see Friends of the Earth’s Are You Invested in Exploitation?: Why US investment firms should quit financing conflict palm oil and commit to human rights.

Friends of the Earth

Friends of the Earth-United States is one of 75 national member groups of Friends of the Earth International, a global network representing more than two million activists in 73 different countries. In our efforts to address the challenges facing our planet, we push for the transformations that are needed, not merely the ones that are politically easy. In our efforts to halt tropical deforestation, we believe we need changes in national policies and practices in both producer and consumer countries – but we also believe that both institutional and individual investors have a role to play in reducing harm and driving positive change.

As You Sow

As You Sow promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, innovative legal strategies, and online financial transparency tools. We are the nation’s leading non-profit organization practicing direct shareholder engagement on environmental, social, and governance issues. Founded in 1992, As You Sow believes that corporations must be willing participants in solutions to most of today’s pressing issues; and we believe that shareholders are the single most powerful force for motivating that participation. We use that power to protect health and the environment and to create positive, lasting change in corporate behavior for the long term benefit of humanity.

In September 2015, we launched Fossil Free Funds, a search platform that enables people to find out if their money, in the form of individual investments or an employer-provided 401(k), is being used to extract and consume fossil fuels. Fossil Free Funds empowers investors to know exactly what they own, to see if their savings are invested in dirty energy sources, and to find investment options that support a cleaner, greener future.

Earth HQ

Earth H.Q. is an online action center created by Friends of the Earth, where you can learn about some of the biggest challenges facing our planet and discover practical, meaningful ways that all of us can work together to fix them. Right now, we’re helping everyday people tackle the problem of deforestation due to palm oil cultivation by giving them the tools they need–like the Deforestation Free Funds app–to invest responsibly and demand change.

How It Works
Step One
Search for mutual funds by name, ticker symbol or fund manager - or browse the database
Step Two
See how much money your funds have invested in the palm oil industry - whether in palm oil producers, the banks who finance them, or the brands who use palm oil in their products.
Step Three
Use our action tool to demand responsible, deforestation-free investment options and policies from your retirement plan manager at work or from the major fund families like Vanguard, TIAA-CREF and Dimensional Fund Advisors.
Step Four
Search for similar funds that steer clear of dirty palm oil, and consider investing in those.

Deforestation Free Funds sources financial data on equities and mutual funds from Morningstar. Our database contains data on 3,000 open-end and exchange traded mutual funds from the United States. We cover many of the most common funds held in 401(k)s, 403(b)s, and other retirement plans.

Finding a fund

Search for mutual funds using name or ticker symbol. Use the search page to filter funds by investing style, fund family, and more. Looking for your favorite fund and can't find it? We don't have everything in our database - we only screen mutual funds that own stocks.

Screening a fund

For each mutual fund in our database, we examine every holding and determine if it is a stock issued by a palm oil producer, a bank or financial institution that lends to palm oil producers, or a major consumer goods company that sources palm oil for its products.

Holdings that are not stocks, like currencies, bonds, or other mutual funds, are not rated. A fund’s Percent Rated value is equivalent to the percent of the fund that is invested in stocks. The higher a fund’s Percent Rated value, the more holdings we were able to examine. A fund with a lower Percent Rated value may have hidden palm oil-related holdings that our tool cannot account for.

If a fund holds stock in a flagged company

Three screens are applied to each fund – a list of palm oil producers, a list of banks and lenders that finance those producers, and a list of major consumer brands that use palm oil in their products. Click here to see which specific companies get flagged.

We calculate the total amount of exposure

Mutual funds can have a varying number of holdings, from less than one hundred to several thousand. We calculate the total number of flagged holdings in the fund, and the total amount and percentage of the fund’s assets that are invested in those companies.

Frequently Asked Questions
1. What is Deforestation Free Funds?

Deforestation Free Funds is a search platform that enables people to find out if their money, in the form of individual investments or an employer-provided 401(k), may be causing tropical deforestation through investment in companies that produce, consume, or finance palm oil – the fastest growing cause of rainforest destruction today.

Palm oil is not the only cause of deforestation. Over time we will expand the tool to cover other industries that cause rainforest destruction; for now, Deforestation Free Funds begins with palm oil because the unsustainable expansion of this industry is causing social conflict and human rights abuses in tropical countries, driving endangered species to the edge of extinction, and driving Indigenous Peoples off their land.

If it were up to you, your money wouldn’t be used to finance rainforest destruction. But owning investments in palm oil and other destructive commodities isn’t just a moral question. As more of us recognize that the global climate cannot afford more rainforest destruction, investments in destructive palm oil companies will carry increasing financial risks. Already, many consumer brands are making efforts to drop palm oil producers that destroy forests and violate human rights, and the market is demanding better practices.

Deforestation Free Funds empowers investors to know exactly what they own, to see if their savings are invested in key aspects of the palm oil value chain, to pressure fund managers to implement sustainable investment policies, and to find investment options that support a forest-friendly future.


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2. Why "deforestation free" funds?

Because trees capture and store CO2, global deforestation is a leading cause of global warming – second only to burning fossil fuels. And, in the words of the fossil-fuel divestment movement, "If it’s wrong to destroy the planet, it’s wrong to profit from the destruction."

About 48 football fields’ worth of tropical rainforest are destroyed every minute. Tens of billions of dollars in public and private equity is invested in the production and trade of commodities that directly cause this destruction. These billions of equity dollars are invested with the primary goal of building wealth for those of us who, in global terms, are already wealthy – leading US financial firms and their institutional clients – as well as for these firms’ individual clients – average Americans with their retirement savings invested through commercial outlets like Vanguard, JP Morgan Chase, and BlackRock, or through public and private pension fund managers like TIAA-CREF and CalPERS.

By providing a window into these investments, Deforestation Free Funds hopes to build on the gains of the fossil-fuel divestment movement and catalyze the power of individual investors to bring an end to tropical rainforest destruction - starting with the palm oil value chain.


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3. Why palm oil?

Consider this tool “Deforestation Free Funds 1.0”. Over time we will expand Deforestation Free Funds to cover other industries that cause rainforest destruction such as soy, sugar, beef, timber, and pulp and paper; for now, we begin with palm oil because the rapid expansion of industrial palm oil plantations is the fastest growing cause of tropical deforestation today. Unsustainable expansion of industrial-scale palm plantations is causing social conflict and human rights abuses in tropical countries, driving endangered species to the edge of extinction, and driving Indigenous Peoples off their land.


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4. Are all palm oil companies, or companies that use palm oil in their products, bad?

Industrial palm oil production generally relies on destructive and exploitative practices–but not all palm oil producers are guilty of the same level of abuses, not all consumer brands that use palm oil are directly linked to the worst tropical deforestation, and not all banks that lend to the palm oil industry are equally guilty. But all of them are at risk of driving rainforest destruction unless they are pressured to implement better practices - through shareholder engagement, through public campaigning, through government action, and, broadly speaking, by being held to a higher public standard. Many of the companies screened on Deforestation Free Funds are members of the Roundtable on Sustainable Palm Oil (RSPO) and other industry bodies that propose to drive sustainable business practices - but these bodies have proven insufficient to address the scale and nature of the problems. There are some good small companies out there, and there are some very large companies that are authentically trying to drive positive change - and our belief is that, by shining a light on the financing of the palm oil industry broadly, we will further enable the changes that need to happen.

Thus, Deforestation Free Funds enables people to find out if their money, in the form of individual investments or an employer-provided 401(k), is invested in companies that produce, consume, or finance palm oil: the top palm oil producers, the top consumer brands that use palm oil, and the top banks that finance the big producers in order to encourage policies and practices that bring about real change throughout the value chain.

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5. Is all palm oil production unsustainable?

The vast majority of palm oil produced today is produced unsustainably. Palm oil dominates the market because it’s cheap to produce. Its cheap to produce in part because its a very productive crop - but its low cost is in large part subsidized by environmental destruction, illegal land grabs, corruption and human rights abuses.

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6. Aren’t some palm oil companies making improvements? What about consumer brands? What are they doing?

Thanks to increasing pressure from shareholder activists, environmental human rights groups, and the general public, dozens of the world’s largest palm oil producers and consumer brands have adopted commitments to “Zero deforestation and zero exploitation.” Some of these commitments are better than others; some are being implemented while others are little more than words on paper - and none are backed up by robust government enforcement of legal standards. (To learn the latest on these commitments, see this report by SupplyChange.org.) Because things are in constant flux, Deforestation Free Funds is unable to provide a succinct and up-to-date summary of which companies are doing what; and because it’s a complex landscape, no one organization or website can offer the definitive truth on what companies are doing. But, to help you do your homework, here are some links to the relevant campaigns and clearinghouses:

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7. Where does the A-F "Palm Oil Score" come from that I see when I search a fund?

Palm oil-based deforestation is primarily undertaken by palm oil producers and the large trading companies that buy from them, who are engaged in irresponsible and unethical practices. Large financial institutions extend lines of credit to the producers that allow them to expand. The palm oil that producers ship to market is purchased by international consumer goods companies.

Our website screens for these three types of companies - producers, banks and lenders, and major consumer brands - offering visibility into the portfolio’s exposure to each category. See the list below for the specific companies we screen for.

Based on how much money a fund has invested in these companies, we assign one of six palm oil scores. Funds are always scored against funds from the same market - E.G., funds from the U.S. are scored against other U.S. funds. Only funds that own stocks are scored - E.G., bond funds and other portfolio types are excluded.

A
Owns no producers, no banks and lenders, and no major consumer brands

If the fund doesn’t own any of the companies we screen for, it earns a score of A.

B
C
B - C: Owns no producers, but owns banks and lenders or major consumer brands

If a fund owns no producers, but owns banks and lenders or major consumer brands, it earns either a B or a C.

These funds are then sorted by the total assets they have invested in banks financing palm oil or major consumer brands.

If a fund is below the median, they earn a B. If they’re above the median, they earn a C.

In other words, funds with a C have more money invested in banks financing palm oil and major consumer brands than funds with a B.

D
F
D - F: Owns producers, and may own banks and lenders or major consumer brands

If a fund owns any producers, it earns either a D or a F.

These funds are ranked by the total assets they have invested in producers, banks and lenders, and major consumer brands.

If a fund is below the median, they earn a D. If they’re above the median, they earn an F.

In other words, funds with an F have more money invested in all three lists - palm oil producers, banks and lenders, and major consumer brands - than funds with a D.

Special engagement score: Offered by fund family that frequently engages companies it invests in to push for better behavior

If a fund owns some of the companies we screen for, but has a proven track record of engaging the companies it owns by taking actions such as filing shareholder resolutions on palm oil, deforestation, or similar environmental issues, it earns a special engagement score.

Read more about funds that engage companies on palm oil and deforestation.

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8. What are socially responsible funds? What about funds that engage the companies they own to push for better behavior?
socially responsible

Socially responsible funds make investment decisions based on issues like environmental responsibility, human rights, or religious views. A socially responsible fund may take a proactive stance by selectively investing in, for example, environmentally-friendly companies, or firms with good employee relations. They may also avoid investing in companies involved in promoting alcohol, tobacco, or gambling, or in the defense industry.

Some socially responsible funds go further, actively engaging the companies they own. Indeed, efforts by socially responsible investors whose funds are found on this site have been crucial to driving positive change in the palm oil sector. A number of fund families are known palm oil engagers, and have taken actions such as filing shareholder resolutions asking for policy changes. Those families deserve special acknowledgement - often, they’re using their investments to make sure they have a voice at the table to call for real improvements in company behavior. We used data collected by Ceres to identify fund families that have filed shareholder resolutions on palm oil, deforestation, or similar environmental issues. If a fund owns companies we screen for but the family is a known filer of palm oil or environmental-related shareholder resolutions, it earns a special engagement score. Read more about our palm oil scores.

Are you a fund manager that has filed a deforestation-related shareholder resolution, or otherwise engage the companies you own on palm oil?

Get in touch - we’d love to hear from you.

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9. What companies do you look for when funds are screened?

Three screens are applied to each fund – a list of palm oil producers, a list of banks and lenders that finance those producers, and a list of major consumer brands that use palm oil in their products.

Producers

Identified by Friends of the Earth’s palm oil research, the companies we currently list in this category are companies that own or control large areas of land where they produce palm oil on industrial monoculture plantations, and are often directly responsible for clear cutting rainforest to make way for palm oil plantations. Some companies in this category are both producers and traders (they own plantations and also purchase from plantation-owners and other producers). Some companies may claim that the rainforest had already been destroyed by the time they established their plantations; some companies have policies that commit them to more sustainable practices; some companies belong to industry-led sustainability platforms and certification schemes like the Roundtable on Sustainable Palm Oil. But, regardless of claims, commitments, and certification schemes, all of them use a model of expansive monoculture production and have a history of direct and indirect forest destruction; they should therefore be considered to be “at-risk” for driving deforestation, and need to be held to a higher standard.

View Producers
Banks and lenders

These companies were identified using research provided by Rainforest Action Network and Profundo, who will soon be releasing a full ranking of what these banks are and are not doing to address deforestation-risk in their lending. All banks and lenders on the list are directly involved in financing palm oil producers, and are most likely involved in financing other forest-risk commodities as well.

View Banks and Lenders
Major consumer brands

This list consists of public companies from Rainforest Action Network’s Snack Food 20 Scorecard, or their corporate parent. We then asked the Union of Concerned Scientists for their list of high market cap fast food, personal care, storebrand, and food manufacturing companies that are confirmed buyers of palm oil in the consumer goods sector. As with the palm oil producer, many companies in these sectors are taking steps to reduce their deforestation risk - and we believe that more scrutiny can only help.

View Major Consumer Brands
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10. Why do you emphasize 401(k)’s? Does the tool work for other types of investment vehicles?

For many of us, the majority of our investments are in 401(k) plans offered by our employers. 401(k)s invest mostly through mutual funds and exchange-traded funds (ETFs). But those funds can invest in a wide array of securities, and it’s not always easy for investors to investigate what’s inside the funds they own. You can spend hours poring over mutual fund prospectuses, and still not fully grasp everything your 401(k) is invested in. Your retirement money may be invested in economically and morally risky palm oil producers companies.

But regardless of how your money is invested–whether through a 401(k), a traditional or Roth IRA, a pension fund or other vehicle, if you hold mutual funds, we can help you analyze them for palm oil holdings.

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11. What are you asking for people to do? Divest?

For the time being, the main use of this tool is to encourage people to look into their investments and pressure their fund managers to develop policies that discourage deforestation. We are not asking for divestment – at least not across the board.

The fossil fuel and private prison divestment movements are right to demand that institutions completely divest from fossil fuels and private prisons: the private prison industry causes only harm for society and should not exist, and the fossil fuel industry is driving us to the brink of planetary destruction and needs to be phased out in favor of clean, renewable energy sources.

However, the palm oil industry’s core function and purpose, to produce palm oil, (arguably) does not inherently harm people and the environment. It is the process by which palm oil is produced that makes it dirty, and the scale to which it has grown that makes it purely destructive.

We DO want to halt the destructive growth of this industry – but at the moment, our power to do that lies in part in our ability to pressure investors to make the companies they invest in improve their practices to protect forests and human rights. When they do not improve practices – and many do not – divestment becomes necessary.

Another important reason is, in contrast to fossil fuels, there are many financial firms that are not invested in palm oil, because palm oil is a much smaller sector. This is why Friends of the Earth’s campaign is not simply asking for investors to take their money out of palm oil, but is asking for all investors to first disclose their palm oil investments, to commit to a Deforestation Free investment policy, and to exclude or divest from, any companies that continue to cause deforestation and land grabbing. (Click here to learn more about what Friends of the Earth is asking.)

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12. Who is Friends of the Earth?

Friends of the Earth-United States is one of 75 national member groups of Friends of the Earth International, a global network representing more than two million activists in 73 different countries. In our efforts to address the challenges facing our planet, we push for the transformations that are needed, not merely the ones that are politically easy. In our efforts to halt tropical deforestation, we believe we need changes in national policies and practices in both producer and consumer countries – but we also believe that both institutional and individual investors have a role to play in reducing harm and driving positive change.

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13. Who is As You Sow?

As You Sow promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, innovative legal strategies, and online financial transparency tools. We are the nation’s leading non-profit organization practicing direct shareholder engagement on environmental, social, and governance issues. Founded in 1992, As You Sow believes that corporations must be willing participants in solutions to most of today’s pressing issues; and we believe that shareholders are the single most powerful force for motivating that participation. We use that power to protect health and the environment and to create positive, lasting change in corporate behavior for the long term benefit of humanity.

In September 2015, we launched Fossil Free Funds, a search platform that enables people to find out if their money, in the form of individual investments or an employer-provided 401(k), is being used to extract and consume fossil fuels. Fossil Free Funds empowers investors to know exactly what they own, to see if their savings are invested in dirty energy sources, and to find investment options that support a cleaner, greener future.

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14. What is EarthHQ and how do I get involved?

Earth H.Q. is an online action center created by Friends of the Earth, where you can learn about some of the biggest challenges facing our planet and discover practical, meaningful ways that all of us can work together to fix them. Right now, we’re helping everyday people tackle the problem of deforestation due to palm oil cultivation by giving them the tools they need–like the Deforestation Free Funds app–to invest responsibly and demand change.

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Get in touch

Media and General Inquiries

Andrew Montes, Director of Digital Strategies, As You Sow

Email

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