Banks Direct $154 Billion to Firms Responsible for Deforestation

(Bloomberg) --  

Global banks have directed $154 billion through loans and underwriting to the commodity trade that causes deforestation and degradation of land since 2015, according to a report.

Banks have increased credit to commodity companies by 40% since the December 2015 Paris Agreement, affecting tropical forests in Southeast Asia, Brazil, and central and west Africa, non-profit Amazon Watch said in a statement yesterday.

Banco do Brasil was the largest creditor, providing $30 billion since 2016 to companies that put forests at risk, the group said. Those companies, which operate mainly in Brazil, are involved in beef, soy and paper production, Amazon Watch said. Other banks include Brazil’s Bradesco, Dutch bank Rabobank and JPMorgan Chase & Co. in the U.S.

“Despite various multilateral and industry commitments to zero deforestation, tropical deforestation has nearly doubled over the past 10 years,” Amazon Watch said in the statement. It said that tropical deforestation reached 11.9 million hectares in 2019 alone.

Fifteen banks accounted for about 60% of the $154 billion, of which eight signed the United Nation’s Principles for Responsible Banking. The pledge means the banks are committing to align their operations with the Paris Agreement and Sustainable Development Goals. One of the goals is to halt deforestation and restore degraded forests by 2020, Amazon Watch said.

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