Anne Vigna

According to one study, bank investment has increased by 40% in tropical forests since the Paris Agreement. But not to save them, rather to exploit them...

Anne Vigna

Correspondent in Rio de Janeiro

It is an embarrassing study for the financial sector which is published on September 1st. While tropical forests are burning all over the planet, a coalition of NGOs and research institutes (1) points to the responsibility of banks in deforestation. The Forests and Finance study ranked banks according to their activity in sectors linked to deforestation in the world's three main tropical forest basins: the Brazilian Amazon, Southeast Asia, and Africa ( West and Central).

“We started our investigation in 2016 just after the signing of the Paris Agreement and the promise of a global commitment to the preservation of forests. However, we note that the amount of loans in these three basins has actually increased by 40% since the Paris Agreement”, explains Merel van der Mark, coordinator of the “Forests and Finance” coalition.

Between 2016 and April 2020, banks granted a total of 154 billion dollars in loans and invested 37 billion dollars in companies whose activities harm the forest: exploitation of wood and rubber, grazing for cattle, plantations of soybeans, pulp and palm oil.

The most affected Amazon

It is in the Amazon that the money flows the most. An essentially Brazilian capital, partly subsidized by the government, and which finances first and foremost the raising of beef. This sector is precisely responsible for 80% of deforestation in the Amazon and is becoming increasingly profitable, according to Paulo Barreto, researcher at the Imazon Scientific Institute: "Right now, we have a very unfavorable combination, which explains the explosion deforestation and bank credit. The price of beef has increased by 58% over the past two years due to the increasingly greedy Chinese market. And we have a president who wants to exploit the Amazon and has increased the availability of rural credit for farmers. »

Thus, at the top of the ranking, we find the semi-public Brazilian bank Banco do Brasil with 30 billion dollars in loans granted. In second position, another Brazilian bank, private this time, the Bradesco bank, with 7.5 billion dollars. Finally, the Brazilian economic development bank, BNDES, has invested $3.8 billion in the Amazon.

Also note the significant participation of European banks: 6.3 billion dollars for the Dutch bank Rabobank , 4.5 billion for Santander (Spain) and 4.2 billion for BNP Paribas (France).

Palm oil and rubber

In Southeast Asia, the palm oil sector concentrated 82% of all investments in the region and received 29 billion dollars in loans, in less than four years. These credits come mainly from banks in the region (in particular from Malaysia and Indonesia) and have been in the vast majority attributed to the Indonesian giants of the sector, “without any ecological and social criteria” according to the coalition.

It is also Asian banks and companies that exploit the forests of West and Central Africa to extract rubber. The rubber plantations, which also belong to Chinese groups, have received 90% of the loans granted by banks, mainly Chinese.