Forest IQ:

What is Forest IQ?

Forest IQ is a data platform developed by ZSL, Global Canopy, and the Stockholm Environment Institute (SEI), in consultation with 10 financial institutions. It brings together data from more than 2,000 companies on how they manage risks associated with deforestation, drawing on seven datasets including SPOTT, Forest 500, Trase, and the Roundtable on Sustainable Palm Oil (RSPO). Three core metrics covering exposure, materiality, and performance provide a high-level benchmark on deforestation for each company.

The platform's key strength is consolidation. Having standardised metrics from multiple trusted sources in one central location significantly reduces the time and complexity of assessing deforestation exposure across a portfolio. Financial institutions interviewed for the study consistently cited this as a primary benefit.

Its key limitation is also structural. The majority of data points rely on self-reported information, company disclosures, and questionnaire responses. This approach is common across the ESG industry, but it leaves room for omission and lacks the specificity that deforestation monitoring requires, particularly given how opaque commodity supply chains remain. The data focuses more on the quality of a company's commitment to end deforestation than on its current performance.

Forest IQ and the TNFD LEAP Approach

A core component of the TNFD is the LEAP approach, an integrated assessment framework for identifying and managing nature-related risks and opportunities. LEAP stands for Locate, Evaluate, Assess, and Prepare. Frontierra's study assessed how Forest IQ can support financial institutions at each stage.

• Locate: Forest IQ enables financial institutions to screen their portfolios for exposure to companies linked to forest-risk commodities, and in some cases identifies the countries where those commodities are sourced.

• Evaluate: Data points on deforestation exposure, commodity volumes, land ownership, and compliance rates allow institutions to begin evaluating the scale and materiality of potential impacts and dependencies.

• Assess: Information on zero-deforestation commitments, target dates, policy adequacy, and human rights standards supports assessment of how companies are managing risks and what mitigation actions may be required.

• Prepare: Forest IQ data can inform engagement strategies, investment policy updates, and TNFD-aligned disclosures.

The study found that all four financial institutions interviewed, Schroders, Robeco, Federated Hermes Limited, and Storebrand, were using Forest IQ data to address various components of the LEAP approach, even where they did not explicitly label their processes as such. Each had committed to being a TNFD Early Adopter.

Where Policy Screening Falls Short

Because Forest IQ relies primarily on self-reported data, Frontierra undertook satellite-based assessments to test whether disclosed commitments aligned with what was observable on the ground. Nine companies from the Forest IQ database, selected by the financial institutions interviewed, were assessed.

Of the nine companies selected, only three provided public traceability of their supply chains. The remaining six could not be assessed via satellite verification due to lack of location data. As the study notes, this absence of traceability is itself a material risk signal, one that financial institutions should treat as equivalent to, or greater than, disclosed deforestation exposure.

Of the three companies that could be assessed, all had zero-gross deforestation commitments. Significant levels of attributable deforestation were identified for each of them. The combination of high deforestation exposure, past or imminent commitment dates, and limited reporting on actual hectares of deforestation indicates that public commitments are not reliably translating into on-the-ground outcomes.

The study's conclusion is clear: Forest IQ is an excellent starting point for identifying high-risk companies, but further analysis is required to identify material risks with sufficient confidence. Satellite-based verification is not optional for credible deforestation risk management.

What This Means for Financial Institutions

Three practical conclusions follow from the study's findings.

• Non-disclosure is a material risk. Companies that do not publish supply chain traceability information cannot be independently verified. That uncertainty should be treated as a material risk, not a data gap to be set aside.

• Commitments must be verified. Zero-deforestation commitments, however well-structured, do not confirm current performance. Satellite-based assessment is the only way to test whether commitments are being met in practice.

• Traceability requirements should be embedded. Financial institutions are encouraged to incorporate plantation-level traceability requirements into investment and financing agreements, and to use engagement with portfolio companies to push for greater transparency.

Frontierra's deforestation monitoring service delivers the satellite-based evidence needed to verify deforestation exposure across portfolios and supply chains. For organisations working through the TNFD LEAP approach, our nature risk and opportunity assessment service provides the location-specific intelligence needed to move from high-level screening to credible disclosure. For organisations with complex global supply chains, our value chain mapping service traces environmental risks from sourcing regions through to the asset level.

About the authors

Brigette Reid, Co-Founder, Frontierra

Brigette specialises in environmental impact assessment, sustainable finance, and ESG strategy, working with financial institutions, corporates, and governments on integrating nature and climate risks into investment and operational decision-making. Connect with Brigette on LinkedIn.

Lewis Rattray, Co-Founder, Frontierra

Lewis brings expertise in satellite data, Earth observation, and geospatial analysis. He has led the development of Frontierra's deforestation monitoring and nature risk methodology, delivering assessments for global financial institutions across the Americas, Southeast Asia, Australia, and Africa. Connect with Lewis on LinkedIn.