Under the spotlight: Banks urged not to cross Red Lines when it comes to Pulp and Paper

June 12, 2025 — The Environmental Paper Network (EPN), BankTrack, the Banks and Biodiversity Initiative, and the Forest & Finance Coalition jointly release Do Not Cross: Red Lines in Pulp and Paper — a new and updated set of minimum environmental and social due diligence criteria for financial institutions engaging with the forest and paper industry.

This product of EPN’s global network of 350 non-governmental organisations, developed in collaboration with the Forests & Finance Coalition, the Banks & Biodiversity Initiative, and BankTrack, provides an extensive list of social and environmental due diligence criteria for financial institutions active in the pulp and paper industry.

“We call on financial institutions to stop funding harmful and destructive practices of the pulp and paper industry,” says Thomas Wenidoppler, EPN’s Pulp & Finance Advocacy Coordinator.
“Our updated safeguard criteria document — Do Not Cross: Red Lines in Pulp and Paper — is an easy-to-use handbook for financial actors to significantly reduce negative impacts of the pulp and paper industry on biodiversity and people, thus also reducing their reputational risks.”

We are currently closing in on ecological and climate-related tipping points. Wenidoppler highlights:

“It’s time for financial institutions to act today and align their investments with the Paris Agreement commitments and the goals of the Global Biodiversity Framework.”

Since the 1960s, global wood harvesting has increased by 65%, reaching nearly 4 billion cubic meters in 2020 — far more than what the world’s forests can sustainably regenerate. If pulp and paper consumption continues to grow at the current rate, production is projected to double again by 2050, reaching 870 million tons annually. In addition, both the construction and operation of pulp and paper mills often cause severe and long-lasting social and environmental impacts.

While governments and industry actors continue to debate, ineffective certification systems — such as FSC, carbon, or biodiversity offset schemes — remain in place. These systems have little to no impact on global warming or species loss. Meanwhile, the world’s natural forests and landscapes are disappearing at an alarming rate.

“Financial institutions must urgently adopt strong policies for the pulp and paper sector to ensure they are not complicit in forest destruction and human rights violations,” states Merel van der Mark from the Forest & Finance Coalition.

In addition to ecological damage, the livelihoods of forest-dependent communities are also under threat. Communities are often driven from their traditionally owned lands to make space for industrial plantations, amid human rights violations and rising social conflict.

“I have just come back from Borneo in Indonesia — what is going on there is disastrous. Humans are under pressure, and the last giant forest of Asia-Pacific is disappearing. At the same time, what remains of Borneo’s rainforests is being sacrificed to a new giant pulp mill aimed at feeding the growing demand for throwaway packaging. Meanwhile, the livelihoods of people are threatened by a voracious and wasteful industry,” stresses Sergio Baffoni, Senior Pulp Campaign Strategist at EPN.

Ola Janus, Banks and Nature Campaign Lead at BankTrack, adds:

“The pulp and paper industry hides serious human rights and environmental risks in plain sight — risks that banks either overlook or willfully ignore in their financing policies. This paper strips away that invisibility.”

“There’s room to write a new chapter for pulp and paper. With this document in hand, banks can finally pick up their pens and start writing it.”

With more than 75% of the world’s land mass significantly altered, financiers must protect and preserve the world’s remaining critical ecosystems — many of which are at risk of disappearing due to the unchecked expansion of the pulp and paper industry.

“If financiers are serious about meeting climate and biodiversity targets, they must adopt No Go areas as a risk management tool and exclude harmful financing in critical ecosystems — and in areas where free, prior, and informed consent from Indigenous communities has not been obtained.”

“Failing to do so will only worsen the interconnected biodiversity and climate crises — and eventually jeopardize financiers’ own portfolios and bottom lines, which inherently depend on nature,” states Katharine Lu, Senior Sustainable Finance Campaigner from the Banks and Biodiversity Initiative.

For more, read here: https://forestsandfinance.org/wp-content/uploads/2025/06/2025-03-The-Red-Lines.pdf