According to a new study released on Tuesday, the world's largest financial institutions increased their support for companies in the agriculture, forestry, and land use sectors most responsible for deforestation in 2021.
The report, released by the Forests & Finance Coalition of NGOs to improve transparency, policies, systems, and regulations in the financial sector, discovered that finance to those companies increased by more than 60% to $47 billion between 2020 and 2021.
The analysis comes ahead of the next round of global climate talks in November, where rainforests and other climate-critical biodiversity are expected to be a major focus.
According to the study, banks have pumped $267 billion into forest-risk commodity firms since the signing of the Paris Climate Agreement in 2015, while investors held $40 billion in bonds and shares as of September this year.
"The world's financial institutions are actually increasing their lending to the very industries driving humanity to the brink," Tom Picken, director of Rainforest Action Network's Forest and Finance Campaign, said in a statement, citing "dangerously inadequate" policies.
The Forests & Finance policy assessment of 200 financial institutions exposed to companies working in deforestation-risk areas in Latin America, Southeast Asia, and West and Central Africa rated 59 per cent of them as "absurdly failing" to mitigate environmental, social, and governance (ESG) risks.
Southeast Asian pulp and paper producers, for example, are continuing to expand production, putting the country's remaining forests under pressure; and in Brazil, the beef industry has contributed to 80 per cent of Amazon deforestation since 1985, according to the report.
The study also noted that finance firms' policies on providing credit or investment to both sectors were "very weak," with little done to prevent environmental degradation, support indigenous peoples' and local communities' rights, or ensure companies are not exploiting people through forced labor.
"This latest assessment shows how big banks and institutional investors are blind to the urgency of the moment," Picken stated.
(Source:www.usnews.com)
The report, released by the Forests & Finance Coalition of NGOs to improve transparency, policies, systems, and regulations in the financial sector, discovered that finance to those companies increased by more than 60% to $47 billion between 2020 and 2021.
The analysis comes ahead of the next round of global climate talks in November, where rainforests and other climate-critical biodiversity are expected to be a major focus.
According to the study, banks have pumped $267 billion into forest-risk commodity firms since the signing of the Paris Climate Agreement in 2015, while investors held $40 billion in bonds and shares as of September this year.
"The world's financial institutions are actually increasing their lending to the very industries driving humanity to the brink," Tom Picken, director of Rainforest Action Network's Forest and Finance Campaign, said in a statement, citing "dangerously inadequate" policies.
The Forests & Finance policy assessment of 200 financial institutions exposed to companies working in deforestation-risk areas in Latin America, Southeast Asia, and West and Central Africa rated 59 per cent of them as "absurdly failing" to mitigate environmental, social, and governance (ESG) risks.
Southeast Asian pulp and paper producers, for example, are continuing to expand production, putting the country's remaining forests under pressure; and in Brazil, the beef industry has contributed to 80 per cent of Amazon deforestation since 1985, according to the report.
The study also noted that finance firms' policies on providing credit or investment to both sectors were "very weak," with little done to prevent environmental degradation, support indigenous peoples' and local communities' rights, or ensure companies are not exploiting people through forced labor.
"This latest assessment shows how big banks and institutional investors are blind to the urgency of the moment," Picken stated.
(Source:www.usnews.com)
