— This is the script of CNBC's news report for China's CCTV on September 6, 2019, Friday.
H&M's action is another clear real impact that amazon wildfire caused to Brazil economy. Before that, VF, a leading American multinational clothing company, which owns some well-known outdoor and sports brands, such as Timberland, Vans and North Face, made a similar decision.
Stopping importing leather stuff is just a temporary decision, but this ban will remain in place till there is a credible assurance system can ensure that leather doesn't deteriorate amazon environment, according to H&M. VF also said it doesn't want to see the commercial activities worsen amazon crisis.
Why did the fire in Brazil's amazon trigger the garment makers' decision to stop importing leather? Because some environmentalists believe that amazon wildfire was caused by Brazil developing rainforest and lumbering for animal husbandry and farming. Brazil local press made an investigation report in July, saying JBS, the biggest meat processor and leather producer globally, has been buying cattle from farmers who herding on land where the Brazilian government explicitly bans, according to source.
JBS declined this report, but it admitted it is hard to trace the origins of some cattle. CICB's data shows Brazil exported $1.44b cow leather last year; its major exporting partners include America, China and Italy, these 3 countries account for 60% of its total exports. Data from the U.S. department of agriculture shows, Brazil is the world's biggest beef exporter, with $6.572b.
However, booming exports of beef and leather is at the cost of environment. Research from the Yale School of Forestry and Environmental Studies shows that cattlefarming is the biggest driver for any amazon rainforest country, including Brazil, to deforest, which account for 80%. Currently, companies who made the ban decision did not buy much leather from Brazil.
H&M's spokesman said most of their leather comes from Europe; Brazil's just a small part.
But once a domino effect makes more leather and beef importers follow that step, then Brazil's economy pillar would be affected, all these need to be handled carefully by the Brazilian government.