The Deforestation-free Transition (DEFT) Pathway is a framework designed to standardise how the finance sector assesses corporate progress towards eliminating deforestation and the conversion of natural ecosystems. It serves as a methodology to categorise companies based on their performance, providing a scalable solution for sustainable finance networks. For finance professionals, it offers a consistent baseline to evaluate environmental risks within portfolios and align investments with global nature-positive goals.

Organisation behind the tool

The tool is a collaborative initiative developed by Global Canopy and Profundo. It is supported by the Accountability Accelerator and intended for use by major sustainable finance networks to improve engagement on deforestation issues.

What the tool does

The DEFT Pathway provides a structured approach to monitoring corporate action on deforestation. Its key functions include:

• Categorising companies into specific tiers based on their level of progress in addressing deforestation and ecosystem conversion.
• Identifying gaps in corporate policies and implementation strategies.
• Standardising metrics for the finance sector to ensure comparability across different industries and regions.
• Facilitating data-driven engagement between financial institutions and their investee companies.

Target audience

The primary audience includes financial institutions, asset managers, and sustainable finance networks. It is also relevant for ESG analysts and policymakers focused on environmental due diligence and supply chain transparency.

Relevance to finance professionals

Finance professionals can utilise the DEFT Pathway for:

• Risk assessment – identifying financial and reputational exposure to companies linked to deforestation and conversion.
• ESG analysis – providing standardised metrics to support climate and nature-related reporting and disclosures.
• Investment context – aligning portfolios with zero-deforestation mandates and international climate commitments.
• Engagement – establishing clear benchmarks for transition discussions with companies in high-risk sectors such as agriculture and forestry.