Banks still fund companies linked to deforestation that threaten global climate goals
Banks in China, the United States, Indonesia and Brazil have invested billions of dollars in companies implementing or dealing with deforestation since the Paris Agreement on climate change was passed in 2015, researchers said Thursday.
An annual report from Forests & Finance, a coalition of research and community groups, analyzes financial institutions’ policies and investments in the companies most exposed to deforestation after the Paris Agreement. She focused on the financial flows of the 300 largest companies involved in the production and trade of goods that threaten forests when land is cleared for farms or ranches — including palm oil, pulp and paper, beef and soybeans in Southeast Asia, Central and West Africa, and the Amazon in South America.
“The real global economy continues to sow the seeds of climate chaos,” said Tom Pekin, director of forestry campaigns and finance at Alliance member Rainforest Action Network (RAN). He added, “The solution is actually quite simple: stop funding forest destruction now. The world simply can’t afford the corporate greening any longer and the delay.”
Deforestation has major implications for global goals to reduce global warming, as trees absorb about a third of the carbon dioxide emissions from global warming, but release carbon they store when they rot or burn. Forests also provide food and livelihoods, help purify air and water, support human health, are an essential habitat for wildlife, help with tropical rains and provide protection from floods.
But last year, the losses of tropical forests around the world were as large as those of the Netherlands, according to the Global Forest Watch Service. The new report found that between January 2016 and June 2021, banks and other financial institutions provided nearly $238 billion in credit to companies most at risk of deforestation.
The report indicated that the banking sectors most responsible for investments in tropical deforestation risks are Brazil, Indonesia, China, the United States and Japan. She added that most of these institutions’ investments do not have appropriate policies or controls to protect against deforestation, wildlife destruction or human rights violations.
Picken of the RAN called for coordinated international financial regulation to address investments related to forest loss. “We need to see a profound change in how the financial sector continues to fuel deforestation and climate change,” he told the Thomson Reuters Foundation by phone.
In the past decade, pressure from consumers and green groups has pushed major brands that grow, trade or buy goods to end deforestation in their supply chains. But prominent members of the Consumer Goods Forum (CGF) – many of whom are household names – are struggling to meet the 2020 goal of buying only sustainably produced goods.
Britain, the host country, at the COP26 climate summit in November, wants to strike a deal to end deforestation by 2030 and asked major producers and consumers of agricultural commodities to stop cutting trees to plant them, British media reported. Banks are making the Paris Agreement out of reach by pumping billions into global deforestation, says Jan Willem van Gelder, director of Profundo, the Netherlands-based nonprofit co-authoring the report.
“If governments continue to leave these financial flows unaddressed, there is little hope that we will achieve even our most conservative collective climate goals,” he added in a statement.
(This story has not been edited by the Devdiscourse staff and is automatically generated from a shared feed.)
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