Money to burn
As fires rage and consume some of the biggest forests in the world, Marianne Brooker draws attention to the role of financial institutions in this inferno.
A veritable A to Z of world finance institutions are enabling the destruction of three of the world’s biggest rainforests, research carried out by environmental and anti-corruption NGO Global Witness has revealed.
Among those identified are some of the largest names in global finance – Deutsche Bank, HSBC, Santander and Standard Chartered among them – providing tens of billions of dollars in financing between 2013-19 to companies either directly or indirectly deforesting the largest rainforest regions of the world.
Five of the world’s leading investment banks, JPMorgan Chase, Goldman Sachs, Bank of America, Barclays and Morgan Stanley, are also implicated.
Global Witness wrote to each bank and received responses, which are referenced in the full report, ‘Money to Burn’.
Six major agribusinesses causing this damage – which these well-known global financial players invest in – produce agricultural commodities like palm oil, beef and rubber.
Global Witness investigated these giant companies over six years (2013-19) operating across the three largest single rainforests on earth – Amazon, Congo Basin and New Guinea – and found that they were backed to the tune of $44 billion by over 300 investment firms, banks and pension funds headquartered across the globe.
The revelations in the report, which was released in September, came after a summer of international outcry over the burning of the Brazilian Amazon, and fresh from a week of strikes and climate action across the globe.
Studies have shown that forests and other ecosystems could make up more than a third of the total carbon mitigation by 2030 needed to limit global heating to a 2-degree Celsius rise.
In 2018 alone an area of primary tropical rainforest the size of Belgium was destroyed. About a quarter of forest loss, or as high as 78% in South-East Asia and 56% in Latin America, was to make way for agricultural commodities, including beef and oil palm.
Ed Davey, head of forest investigations at Global Witness, said: ‘The rapid breakdown of our climate is a concern to many – including bank customers – so it’s unsurprising that banks and investors proudly trumpet policies on ethical investment and lending, giving the impression they are not pumping money into companies that would fell and burn precious rainforests.
‘But their hypocrisy is clear: the same financial institutions are breaking their own policies at will and in search of profit, make many of their promises barely worth the paper they are printed on.
‘Members of the public will be shocked to know that the bank they have a current account with, that manages their pension fund or invests their retirement nest egg [is] enabling the destruction of the world’s most precious ecosystems.
‘$44 billion is a terrifying sum of money to be ploughing into companies that destroy forests – at a time when we need trees more than ever. These household name banks and iconic investment funds our exposé highlights will be familiar to anyone who has looked at the skyline of Wall Street or Canary Wharf, read a newspaper or opened a current account. But the activity in this report is just the tip of the iceberg.’
Global Witness is calling on the financial sector to take responsibility for the impact of their financing and investments on forests and the climate.
It is also urging policymakers to address the systemic failure of the financial system, and the companies it finances or invests in, to tackle deforestation by introducing regulatory measures, strengthening their existing commitments, and taking meaningful measures to ensure they are implemented effectively.
Marianne Brooker is content editor of The Ecologist, from whose website (theecologist.org) this article is reproduced. It is based on a press release from Global Witness.
*Third World Resurgence No. 341/342, 2019, p 4