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forests & finance

The banks and investors exposed to deforestation risks in Southeast Asia

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See the impacts
Photo: Ulet Ifansasti / Wildlife Asia / RAN /
Racing Extinction

news updates

Financiers of IOI and APP face material risks from failure to respect land rights

March 22, 2017

Major palm oil producer IOI Group and pulp and paper producer APP are currently involved in separate community land rights conflicts, exposing their financiers to the risk of complicity in human rights violations and material ESG risks.

read the briefing

IndoAgri’s new Sustainable Palm Oil Policy Fails to Address Key Environmental, Social and Governance (ESG) Risks

February 23, 2017

IndoAgri’s policy falls short on addressing key ESG risks such as protecting valuable forests, preventing the exploitation of workers or committing to independent verification of its palm oil suppliers to No Deforestation, No Peatland and No Exploitation principles.

read the briefing

Greenpeace report finds HSBC is still banking on exploitation of workers & forests

January 17, 2017

HSBC is one of the largest providers of financial services to the palm oil industry. A Greenpeace report finds that, despite lending policies on forestry and agricultural commodities, HSBC has begun or maintained financial relationships with companies destroying forests.

read the briefing

Sime Darby urged to resolve long-standing land rights conflict before stock exchange listing of its plantation division

January 16, 2017

Before any listing proceeds, affected communities and civil society are urging Sime Darby’s banks and investors to require Sime Darby to resolve all outstanding community conflicts and ensure the communities’ land rights are fully respected.

read the briefing

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explore the data

Search our database to discover the link between big banks, investors and forest-risk companies

Run searches using different filter options including finance type, bank or investor, bank or investor region, forest-risk client or group, year and forest-risk sector. The total value of loans, underwriting and bond - and shareholding is displayed below

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finance type bank/investor Bank/Investor Region Bank/Investor Country Forest-risk group Forest-risk client Forest Risk Client Country amount (USD million) year Forest-risk sector

Search total (USD million)

Corporate loans & underwriting by country and sector, 2010-2015 (USD billion)

Banks from Malaysia, China, Japan, Indonesia, Singapore and Europe are the biggest financiers of 50 selected forest-risk sector companies in Southeast Asia

Corporate loans & underwriting by sector, 2010-2015 (USD billion)

The majority of corporate loans & underwriting were provided to the palm oil sector between 2010 and 2015, followed by the pulp & paper, rubber and timber sectors

Bond & shareholdings by sector,
April 2016

The majority of bonds & shares in the 50 selected forest-risk sector companies in Southeast Asia were attributable to the palm oil sector in 2016

 

Bond & shareholdings by investor country in April 2016 (USD billion)

The highest level of bonds and shares in the 50 selected forest-risk sector companies in Southeast Asia were made by Malaysian investors, with the majority of investments attributable to palm oil

Top 15 bond & shareholders by sector in April 2016 (USD billion)

Investors from Malaysia, the United States, the United Kingdom and Singapore are the biggest bond and shareholders in the 50 selected forest-risk companies in Southeast Asia – Malaysian pension funds are among the biggest investors

 

Top 15 loan & underwriting providers by sector, 2010-2015 (USD billion)

Malayan Banking, CIMB, Mizuho Financial, HSBC & DBS were the biggest financiers of the 50 selected forest-risk sector companies between 2010 and 2015

view the bank profiles

See which banks are most involved and how their environmental and social policies stack up - click on a bank to find out more

Bank Bank/Investor Country Total value of loans,
credit & underwriting
2010-2015 (USD million)
Policy Assessment Policy Score
(out of 30)

    See the impacts

    Explore the stories to uncover the deforestation and human rights abuses linked to some bank and investor finance

    Indofood (Salim Group)

    Rainforest clearance and violations of community and worker rights

     

    IOI Group

    Community land conflicts, rainforest destruction and RSPO suspensions

     

    PT Korintiga Hutani

    Displacement of villagers, community conflicts and use of fire to clear land

     

    resources

    Read the briefing to find out more about the role banks and investors play in deforestation

    Forests & Finance Brochure Bank Policy Matrix Banks Haze Crisis Letter

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    About this project

    This website aims to highlight the role that finance plays in enabling tropical deforestation. It is the result of extensive research and investigations by a coalition of campaign and research organisations including Rainforest Action Network, TuK INDONESIA, and Profundo. Collectively, these organisations and their allies seek to achieve improved financial sector policies and systems that prevent financial institutions from supporting the kind of environmental and social abuses that are all too common in the operations of their forest-risk sector clients. For more information on this project please contact forestsandfinance@ran.org.

    methodology FAQ

    methodology

    This project assessed the financial services received by a selection of 50 major companies directly involved in the production or primary processing of palm oil, pulp & paper, rubber and tropical timber, whose operations impact natural tropical forests in the Asia-Pacific region.

    Financial databases Thomson EIKON and Bloomberg, as well as publicly available company reports, were used to identify corporate loans, credit and underwriting facilities provided to the 50 selected companies in the period 2010-2015. Investments in bonds and shares of the selected companies were identified through Thomson EIKON and Bloomberg at the most recently available filing date in April 2016. This data provides a deal-level dataset of specific relationships between selected companies and any linked financial institution.

    Companies with business activities outside of the forest sector had recorded amounts reduced to more accurately present the proportion of financing that can be reasonably attributed to the forest-risk sector production or primary processing operations of the selected company. Where available financial information did not specify the purpose of investment or receiving division within the parent company group, reduction factors were individually calculated by comparing a company’s forest-risk sector activities relative to its parent group total activities.

    The commercial banks identified in this study were evaluated to determine the strength of any publicly-available policies relevant to tropical forest-sector investment decision-making, and subsequently scored against a range of criteria incorporating environmental, social and governance standards. Each of the major banks was allocated a score on the scope of its policies and its environmental and social standards.

    The data and assessments presented in this website have not been provided by or authorized by any of the financial institutions or clients concerned. While every attempt has been made to research and present data and assessments accurately and objectively, it is difficult to guarantee complete accuracy. This is not least because of the lack of consistency and transparency in how financial institutions and forest-risk sector clients record key financial and company information. Where there has been ambiguity in source information of financial services, the authors of this website have acted cautiously, resulting in a likely underestimation of the true amounts of finance involved. The authors are committed to correcting any identified errors at the earliest opportunity.

    faq

    What was the rationale for selecting the 50 company groups?

    The 50 company groups selected for this study are involved in the production or primary processing of pulp and paper, palm oil, rubber or timber in Southeast Asia – collectively referred to as ‘tropical forest-risk sectors’. This list is intended to be a representative sample of companies impacting tropical forests, but is not an exclusive list of all companies impacting tropical forests. Other factors that led to their selection include the size of the company and land area of operation, access to information on their financing, and known negative impacts of their operations on tropical forests. Please see the Methodology section for further information.

    Are all of these companies engaged in harmful operations?

    Not all of the 50 companies selected for the website are engaged in harmful operations. However, all are engaged in large scale operations in tropical forests that have a high risk of causing deforestation and associated social impacts. Banks that do business with these companies are therefore highly exposed to deforestation risks.

    Which countries are included under Southeast Asia?

    Cambodia, Indonesia, Laos, Malaysia, Papua New Guinea, Singapore, Thailand, Vietnam.

    What is the basis of the finanancial information included in the website?

    The website draws from financial databases Thomson EIKON and Bloomberg , as well as publicly available company reports. Both provide a set of software products for financial professionals to monitor and analyse financial information. It provides access to real time market data, news, fundamental data, analytics, trading and messaging tools. Please see the Methodology section for further information.

    What can I do if my bank is financing companies included on the website?

    As a first step, we recommend you check whether the bank has any policies governing their financing of tropical forest-risk sectors. Our evaluation of major bank’s policies are available here (provide link to matrix). If your bank is not included in this evaluation, you could check your bank’s website or ask them directly what policies they have in place to protect forests and people through forest-sector lending. Depending on their response, you might want to ask them to implement a policy, or you might want to find an alternative bank. Our research finds that banks with policies are still financing companies linked to deforestation. Therefore, having a policy is not a guarantee of responsible financing, but may indicate the bank is engaging their clients to improve their performance, or, they may be failing to make sure their policies are being implemented by clients. You are welcome to contact us at forestsandfinance@ran.org if you require further assistance.

    What can investors do to stop deforestation?

    Investors can take a two pronged approach by addressing 1) the companies directly engaged in tropical forest-risk sectors and 2) the banks financing those companies. For both types of companies, investors should demand full disclosure of risks and application of robust ESG standards and due diligence processes. See page 4 of the Forests & Finance Brochure for more recommendations for investors.

    Who are the organizations that are hosting this website?

    Forestsandfinance.org is a joint project of Rainforest Action Network, Tuk Indonesia, and Produndo. Click on the organization name for more information on what we do individually.

    Headquarters
    Top 5 Forest-risk clients
    Client Amount (USD Million)
    Shareholders
    Assets (USD Billion)
    CEO

    Policy Assessment

    Policy Overview


    Scope of commitments

    Environmental standards

    Social standards


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