Banks flow billions to companies involved in damaging rainforests

Bloomberg

Banks are often criticised for the financing they provide to fossil-fuel companies. But it doesn’t stop there. There’s also the funding they offer to companies that are damaging the world’s rainforests and indigenous communities.
Since the Paris climate agreement was announced at the end of 2015, seven banks arranged at least $22.5 billion via loans and debt and equity underwriting services for companies operating in the largest tropical regions of Indonesia, the Congo Basin and the Amazon, the latest data from Rainforest Action Network show.
The banks most guilty of failing to address the destruction of forests are state-owned PT Bank Negara Indonesia, Malaysia’s CIMB Group Holdings Bhd. and Industrial & Commercial Bank of China Ltd., while JPMorgan Chase & Co. and Mitsubishi UFJ Financial Group Inc. have provided the most financing to the main producers of pulp, paper and palm oil, according to the report.
Unless financial institutions implement robust policies, deforestation is going to continue, disrupting interim and long-term climate targets, said Daniel Carrillo, RAN’s forest campaign director.
“Rainforest destruction poses a literal existential threat to people and our planet,” he said. “It greatly exacerbates our climate crisis and pushes countless species to the brink of extinction.”
Like banks, corporations also must be held to account, Carrillo said, pointing to companies such as Procter & Gamble Co., Mondelez International Inc. and Nissin Foods Holdings Co. for “falling behind on the adoption and implementation of policies and actions to end deforestation and human-rights violations.”
Procter & Gamble disagreed with RAN’s findings. “Our forestry sourcing policies directly prohibit deforestation, require our suppliers to respect the rights of communities and indigenous peoples (including requirement to Free, Prior and Informed Consent) and to protect biodiversity,” the company said in a statement. Officials at Tokyo-based Nissin referred to past statements the company has made on the topic.
Indonesia’s Bank Negara said it follows directions from the Financial Services Authority (FSA) to increase financing for environmentally focused businesses, including reforestation. Japan’s MUFG said it regularly updates its environmental and social-policy framework and recently tightened its policies. Officials at JPMorgan,
Mondelez, ICBC and CIMB didn’t respond to requests for comment.
While there are signs corporations including JPMorgan and MUFG are making progress in adopting “No Deforestation, No Peatland and No Exploitation” policies, the shift is occurring at nowhere near the pace that’s necessary, Carrillo said. For example, some banks have issued partial NDPE policies where they’ve included parts of the palm-oil production process and failed to address their lending to other forest-risk sectors such as the pulp, paper and beef industries, he said.
On the brand side, only Unilever Plc gets full marks for “the adoption of an adequate cross-commodity NDPE policy,” according to RAN’s report.