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World’s largest financial firms continue to fuel deforestation, report warns

By on October 18, 2022 0

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Forestry and land use accounts for 23% of global emissions

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Funding for high-risk companies up more than 60% between 2020 and 2021

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Pulp in Indonesia, beef in Brazil among issues of concern

By Juliette Portala

Oct 18 (Reuters) – The world’s biggest financial institutions have stepped up support for companies in the agriculture, forestry and land use sectors most responsible for deforestation in 2021, according to a new study released tuesday.

Published by the NGO Coalition of Forests and Finance, which seeks to improve transparency, policies, systems and regulations in the financial sector, the report found that financing for these companies increased by more than 60% to reach 47 billion dollars between 2020 and 2021.

The analysis comes ahead of the next round of global climate talks in November, where protecting rainforests and other climate-critical biodiversity is expected to be a central theme.

Banks have pumped $267 billion into forest-risk commodity companies since the signing of the Paris Climate Accord in 2015, the study found, while investors held $40 billion in bonds and shares in September of this year.

“The world’s financial institutions are actually increasing their lending to the very industries that are pushing humanity to the brink,” Tom Picken, Rainforest Action Network’s Forest and Finance campaign director, said in a statement, citing policies ” dangerously inadequate”.

The Forests & Finance Policy Assessment of 200 financial institutions exposed to companies working in areas at risk of deforestation in Latin America, Southeast Asia and West & Central Africa noted 59% between them under one in 10, a sign of “a lamentable failure” to mitigate environmental, social and governance (ESG) risks.

In Indonesia, for example, Southeast Asian pulp and paper producers continue to increase production, putting pressure on the country’s remaining forests; while in Brazil, the beef industry has contributed to 80% of Amazon deforestation since 1985, according to the report.

Finance companies’ policies for extending credit or investing in the two sectors were “very weak”, the study also noted, and did little to prevent environmental degradation, support the rights of indigenous peoples and local communities or ensure that companies do not exploit people by coercive means. work.

“This latest assessment shows how blind big banks and institutional investors are to the urgency of the moment,” Picken said. (Reporting by Juliette Portala, editing by Simon Jessop, William Maclean)