New Report: Banking on Biodiversity Collapse – Tracking the banks and investors driving tropical deforestation.

We are excited to present our latest report, Banking on Biodiversity, which delivers an updated overview of global finance’s role in driving tropical deforestation and environmental degradation. This edition includes the most recent financial data, with credit flows updated to June 2024 and investment holdings through July 2024. The report offers new insights into the banks and investors backing 300 companies operating across six high-risk commodity sectors – beef, palm oil, pulp and paper, rubber, soy and timber – in Southeast Asia, South America and Central and West Africa. 

Key Findings

The report uncovers troubling patterns of biodiversity loss, greenwashing and human rights abuses. It also spotlights the failures of voluntary banking initiatives such as the Principles for Responsible Banking  (PRB), the Net-Zero Banking Alliance (NZBA), and the Taskforce on Nature-related Financial Disclosures (TNFD). While these initiatives claim to promote sustainable practices, more than half of the top 30 banks financing sectors linked to deforestation are members of such groups. We also found no evidence to suggest these initiatives have curbed harmful financial flows. This reveals a growing gap between commitments and actions, perpetuating a false sustainability narrative.

Key highlights from the report include: 

• Over $395 Billion USD has been directed to forest-risk sectors since the Paris Agreement, with $77 billion USD flowing in just the last year and a half (January 2023 – June 2024). 
• Investments in these sectors have risen 7% since September 2023, while credit surged to US $53 billion in 2023, up from US $48 billion the previous year. 
• Reliance on flawed certification schemes like the Forest Stewardship Council (FSC) and the Roundtable on Sustainable Palm Oil (RSPO). Financial institutions rely on these certifications to conceal their greenwashing, which further perpetuates environmental damage.

A Path Forward

The report outlines actionable steps governments and financial institutions can take to address the climate and biodiversity crisis. This includes tighter regulations on finance activities that are driving environmental degradation, respecting and prioritizing the rights of Indigenous People and fostering a just transition that focuses on workers’ rights. 

We invite you to explore the full report and the executive summary below by clicking the links below.