Sustainable Views | 9 June 2025Pension funds and agribusinesses are driving destruction of the Brazilian Cerrado
By Florence Jones
As the Brazilian government gears up to host the annual UN COP climate conference in November, the presidency is keen to emphasise the role of the Amazon in the climate fight.
Brazilian President Luiz Inácio Lula da Silva selected the city of Belèm to host the conference to allow attendees to experience the globally significant biome for themselves, even as many will travel there via a controversial highway, being built independently of the conference, which has involved felling tens of thousands of acres of protected rainforest.
But while the Amazon may be the centre of attention for now, other parts of the country are being deforested at an alarming rate, releasing carbon emissions and destroying biodiversity.
Deforestation in the Cerrado, a wooded savannah surrounding the Amazon, reached record levels in 2023, up 43 per cent from 2022 levels. This has largely been driven by industrial agriculture: growing animal feed, rearing cattle and for building developments. The biome has already lost over 50 per cent of its natural vegetation since 1990.
Data collected by the Brazilian satellite monitoring system shows deforestation in the Cerrado has fallen from its 2024 peak, but nonetheless remains higher than in the Amazon.
Further, the Amazon is more than twice the size of the Cerrado at 419mn hectares, compared with 203mn hectares, meaning the share of the region deforested is much higher.
“Ending deforestation in the Amazon is essential, but it cannot be a licence to shift destruction to other climate-critical ecosystems like the Cerrado,” Alexandria Reid, campaign lead at non-profit Global Witness, tells Sustainable Views.
President Lula has committed to ending Brazilian deforestation across all biomes by 2030 and has positioned himself as a climate leader, in contrast to his predecessor, Jair Bolsonaro, who weakened environmental protections.
Yet, as COP30 approaches, Lula’s climate credentials are under scrutiny. On May 20, the Brazilian Institute of Environment and Renewable Natural Resources greenlit oil and gas expansion in the Amazon basin despite the COP30 goal to implement the transition away from fossil fuels.
Private ownership of the Cerrado
The Amazon rainforest is largely publicly owned, with around 32 per cent of the biome in private hands, shows data published in an academic journal in 2023. Meanwhile, around 70 per cent of the Cerrado is privately owned.
In addition to ownership, there are also regulatory differences between deforestation in the Amazon and the Cerrado, Brazil-based João Gonçalves, director of non-profit Mighty Earth’s protein transition campaign, tells Sustainable Views.
A number of investigations in recent months have linked European meat producers to soya farmed on potentially deforested land grown in the Cerrado that is used to feed livestock.
Companies that use Cerrado-based soya producers as direct or indirect suppliers risk missing their Scope 3 emissions targets, says Gonçalves. Land use change, principally deforestation, is responsible for 12-20 per cent of global greenhouse gas emissions, both due to the emissions associated with felling trees and the removal of carbon sinks.
“Private ownership is no excuse for destruction. It’s governments, not corporations, that should be setting the rules and they have a duty to act,” says Reid.
Pension funds buying up Brazilian land
Urban developments in the Cerrado region are growing as its cities become more significant due to their links with the soya trade, says Gonçalves. The Matopiba region in the east of Brazil is a prime example of this expansion, he adds.
Land for potential developments is valuable for pension funds and other financial institutions.
A report published in June by non-profits Fian International and Focus on the Global South highlights corporate ownership of the Cerrado, including pension funds buying up land in the region.
Globally, since 2000, corporations and financial investors have acquired an estimated 65mn hectares of land, twice the size of Germany, says the report. Furthermore, just 1 per cent of agricultural companies control 70 per cent of global farmland, it adds.
US-based pension fund TIAA has acquired large tracts of land in Matopiba, largely through its Brazilian subsidiary, Radar Propriedades Agrícolas, a joint venture with Brazilian agribusiness Cosan and investment company Nuveen, says the report. TIAA has acquired roughly 61,000 hectares in the region and has links to deforestation, it alleges.
A Radar spokesperson shared a statement with Sustainable Views saying it is “committed to the responsible management of agricultural land” and acts in accordance with Brazilian law.
Gonçalves also highlights Harvard Management Company, the university’s endowment fund, which he says acquired more than 40 rural properties in the Cerrado between 2000 and 2008. HMC did not reply to a request for comment.
But these US pension funds are far from alone, says Gonçalves, with other international funds active in the region.
Carbon market land grabs
Agribusinesses in Brazil, including Cosan, are also looking to benefit from carbon finance, says the Fian report. Companies can profit from the land they do not develop through the carbon markets.
However, given their previous links to deforestation, the companies’ “environmental commitments” should be treated with scepticism, the report argues.
In the Cerrado, private landowners can deforest up to 80 per cent of their land legally and must reserve 20 per cent. In the Amazon, the reverse is the case, with anything under 20 per cent deforestation in an area considered legal, he explains. These rules are set under the Brazilian Forest Code, first implemented in 1965.
Lula’s zero deforestation commitment does not change the limits of the Forest Code. Instead, it introduces a mechanism to offset legally deforested land with reforestation projects elsewhere before 2030, Gonçalves explains.
The Cerrado is also not covered by the EU’s Deforestation Regulation — the frontrunner in international deforestation laws — as it is classed as other wooded land, not a forest, under the law.
In addition to smallholder farmers, the Cerrado remains home to Indigenous groups and the descendants of escaped enslaved communities, known as quilombolas, who have land rights. Deforestation on the lands of Indigenous peoples is a crime in Brazil.
The high level of private ownership of the Cerrado means the private sector has a much greater role in protecting the land than in the Amazon, suggests Gonçalves. The government can push owners to follow limits of the Forest Code, but this often does not happen in practice, he argues.
Brazil’s carbon market has grown significantly in recent years, although principally in the Amazon, where companies want to invest due to its prestige, says Gonçalves. Controversies have arisen over the development of carbon projects on the lands of Indigenous communities.
Forests at COP30
The Brazilian government is set to launch a Tropical Forest Forever Facility and its investment arm, the Tropical Forest Investment Fund, at COP30. The financing structure, which was first announced at COP28, seeks to reward developing countries for keeping existing forests standing.
Reid hopes that forests will be a focus for COP30 and that leaders will attend the conference with “concrete, credible plans for how they’ll deliver on the global pledge to halt and reverse forest loss by 2030”.
The time for corporate-led voluntary commitments is over, and “proper regulation of commodity supply chains driving deforestation coupled with real enforcement and traceability” is needed, she suggests.
Gonçalves agrees that corporate-led commitments present a conflict of interests.
He suggests that negotiators should view the issue holistically. Focusing on food system change at COP30, and pushing policymakers to adopt measures to incentivise a higher proportion of plant-based protein consumption, can help reduce demand for the meat products driving the destruction of the Cerrado, he says.
