Civil Society Letter to Financial Institutions: Urgent Action Needed to Stop Fires

As countries in South America and Southeast Asia are bracing for yet another year of serious fires, exacerbated by the El Niño climatic cycle, over 100 Civil Society Organisations and academics urge financial institutions to take action. Banks and investors in commodity sectors which drive deforestation and peatland degradation in tropical forest regions are contributing to the risk and impact of fires and haze through their financing.

Over the last decade (2016-2025), banks have provided 429 billion dollars in credit to timber, soy, rubber, pulp and paper, palm oil and beef sectors in South America, Southeast Asia and West and Central Africa. The Forests & Finance Policy Assessment in 2023 found that bank and investor policies for forest-risk commodity sectors were very weak and provided inadequate safeguards to prevent deforestation or human rights abuses linked to their clients’ operations.

The letter recommends financial institutions take immediate action to address the risk of forest fires by:

• Strengthening No Deforestation or Conversion, No Peat and No Exploitation policies to reduce deforestation and degradation in tropical ecosystems. This includes the prohibition of the use of fire in any activities.
• Engage clients in forest-risk sectors to confirm they do not use fire in their activities, or allow it within their supply chain.
• In cases where clients do not comply, restrict financial services or terminate the relationship.
• Advise its clients and companies linked to agricultural economic activities to increase care, adding support to fire brigades in their regions;
• Encourage credit and financing for sustainable activities such as agroecological production and agroforestry systems intended for food;
• Refrain from providing new finance, from refinancing or underwriting services to companies or corporate groups that have been held legally responsible for forest and peatland fires, until all court-ordered obligations, restoration commitments, and compensation measures have been fully implemented.

Download the CSO Letter to Financial Institutions.