A report of the coalition of Ong Forest & Finance calculates that only in the last year the financing towards the companies that treat goods considered at risk of deforestation have grown by 60%
The 200 biggest financial players have “dangerously inadequate” policies on tropical forest protection
(sustainabilityenvironment.com) – Between 2016 and 2022, the Indonesian groups Sinar Mas and Royal Golden Eagle (RGE) received investments of almost 23 billion dollars. That is 95% of all the money guaranteed by the banks to the semi-finished sector from which the paper is obtained, of which Indonesia is one of the largest producers in the world with 16% of global exports. Funding has continued to arrive despite the two groups having completely insufficient policies on the protection of ecosystems and their relationship with local communities. And they are systematically destroying tropical forests. Sinar Mas, for example, expands its plantations on drained peatlands and is accused of using violence and intimidation against the people of the region.
The Indonesian one is not an isolated case. The largest financial institutions in the world are continuing to guarantee investments to those companies that are at high risk of damaging the tropical forests, without binding them to improvements in environmental policies, transparency, governance, in social policies for the territory in which they operate. Indeed, the trend is increasing. Between 2020 and 2021, the flow of capital increased by 60%, reaching 47 billion just last year. From 2015 to today, the total amount of money mobilized is 267 billion.
Read also Deforestation: how central banks destroy the Amazon
The data are part of the report of Forest & Finance, a coalition of NGOs such as Rainforest Action Network, Amazon Watch, Reporter Brasil, Friends of the Earth US active in tropical forest monitoring. From this emerges a net judgment: banks and large investors have policies “dangerously inadequate” for goods at risk of deforestation. The assessment of the ESG standards of the 200 biggest financial players is clear, the average score is 1.6 out of 10 and 59% of the surveyed entities are below 1. Only three of them manage to pass the threshold of 7 points.
“It is now established that the two crises of climate change and biodiversity loss represent a generational and global threat, Yet global financial institutions are increasing loans to industries that are bringing humanity to the brink,” says Tom Picken, founding member of the Forests & Finance Coalition. “This latest assessment shows that large banks and institutional investors are blind to the urgency of the moment and financial sector policies remain dangerously inadequate“.
