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Top global banks and investors made an estimated $1.74 billion in income since Paris Climate Agreement from deals with agribusinesses linked to destruction of climate-critical forests and human rights abuses
New Global Witness investigation reveals for the first time how much financial institutions in UK, EU, US, and China could have made from deals with agribusiness firms linked to deforestation and associated abuses. HSBC, Deutsche Bank, JP Morgan, BNP Paribas, Rabobank, and Bank of China are among the worst offenders.
Banks and investors headquartered in the UK, EU, US, and China made an estimated $1.74 billion in income from huge investments in agribusiness firms linked to the destruction of climate-critical forests in the five years following the Paris Climate Agreement. A ground-breaking investigation shows major banks, including HSBC, JPMorgan, Deutsche Bank, BNP Paribas, Rabobank, and Bank of China are profiting from rainforest destruction, contrary to many of their own public commitments.
We analysed over 70,000 share, bond, credit, and underwriting deals struck between financiers headquartered in the UK, EU, US, and China and twenty of the worst agribusiness companies between 2016 and 2020. These companies all have reported links to the destruction of tropical forests and associated human rights abuses in Southeast Asia, Central and West Africa, and Brazil.
The report, Deforestation Dividends, reveals the true scale of banks' financing of some of the world's most destructive companies and for the first time provides an estimate of how much income financiers could have made in interest, fees, and dividends from backing the parts of their business that carry the highest deforestation risk - primarily soy, beef, palm oil, pulp, and paper.
Many of the banks featured in the report have committed to align their investments with the goals of the Paris Climate Agreement and put in place voluntary environmental, no-deforestation and human rights policies. The findings published today suggest that banks' actual financing decisions contradict their own public pledges and policies as they continue to profit from deforestation and associated abuses.
This highlights that relying on banks' own voluntary commitments to rein in deforestation financing has clearly failed. In the absence of any external accountability mechanisms or government legislation, banks face no consequences for striking problematic deals over and over again.
Our in-depth analysis of financial data from 2016 to 2020 suggests that:
- Financial institutions in the UK, EU, US, and China ploughed $157 billion into agribusiness firms linked to tropical deforestation and associated human rights abuses.
- US financial institutions made $538 million through deals with some of the world's the most destructive agribusinesses.
- JPMorgan is the biggest deforestation financier in the US, EU, UK, and China, making $56.9 million from deals worth $9.38 billion with firms that have fuelled rainforest destruction over the past five years.
- British financial institutions made deals worth $16.6 billion (PS12.7 billion), raking in $192 million (PS147 million) in deforestation-linked revenue along the way.
- HSBC is the UK's biggest financier of destructive agribusiness and the second largest privately owned bank in our global dataset after JPMorgan. It provided $6.85 billion (PS5.25 billion) of financing to some of the world's worst deforesters - and likely pocketed more than $36.4 million (PS27.8 million) in revenues along the way. HSBC received $20.2 million (PS15.5 million) of that total income in the reyears following its 'no deforestation' commitment in 2017.
- Lenders based in the EU have raked in $455 million (EUR401 million) in deforestation-adjusted proceeds on $34.7 (EUR30.6 billion) billion worth of deals with top deforesters. Deal-making was dominated by big banks from the Netherlands, France, Spain, Germany, and Italy.
- France's largest bank, BNP Paribas, could have generated over $37.3 million (EUR32.9 million) in income from deforestation-risk agribusiness, while Dutch bank Rabobank could have pocketed an estimated $76.2 million (EUR67.2 million) and Deutsche Bank could have made $14.1 million (EUR12.4 million).
Among the destructive agribusinesses which proved particularly lucrative for these global banks are: soy giant SLC Agricola, which stands accused of clearing 30,000 hectares of forest in Brazil's Cerrado between 2011 and 2017; Brazilian beef giants JBS, Marfrig and Minerva, which we have previously linked to tens of thousands of hectares of deforestation in the Brazilian Amazon; Salim Group, which has been accused of rainforest destruction, child labour and other abuses tied to its palm oil operations in Indonesia; and Olam International, which stands accused of razing 40,000 hectares of rainforest in Gabon between 2012 and 2017 to create rubber and palm oil plantations. These companies' problematic track records should have raised major red flags for bank compliance teams.
The report adds to growing pressure for banks to be regulated under new rules on deforestation and supply chains and reinforces affected communities' calls for remedy and redress under international and national laws. As governments, shareholders and the public increasingly see money made on the back of environmental and human rights abuses as illegitimate, banks' deforestation-linked profits could become major liabilities.
Governments in major financial centres, including the EU, UK, US, and China must urgently pass strong laws that stop the finance industry profiting from deforestation and associated human rights abuses and penalise those who continue to do so.
Financial institutions must also immediately cut off ties with destructive agribusinesses and provide redress and remedy for affected communities.
Our findings come as world leaders prepare to gather for the crucial COP26 climate conference, against the backdrop of record global temperatures, increased extreme weather events and alarming rates of forest fires and deforestation around the globe, including in the Amazon.
Deforestation is one of the key drivers of global warming and protecting the world's forests is crucial to prevent further climate catastrophe, biodiversity loss and help stop the spread of zoonotic diseases like COVID-19.
Shona Hawkes, Senior Global Policy Advisor on Forests at Global Witness said:
"Our investigation followed the money to reveal, for the first time, how much top global banks are making from the destruction of climate-critical forests and associated human rights abuses.
"There is no more striking example of climate injustice than big financial institutions headquartered in banking centres like London, Paris and New York raking in eye-watering sums while they bankroll the destruction of the land, homes and livelihoods of communities who have safeguarded their forests for generations and are among the lowest greenhouse gas emitters in the world.
"Financiers' deforestation-linked profits are toxic - for the planet, for the affected communities and ultimately, for the banks themselves as their investments in destructive agribusinesses increasingly risk becoming legal and financial liabilities.
"Banks are touting their green credentials with glossy voluntary policies and commitments, but our findings highlight that these amount to little more than pure greenwashing. Talk is cheap and money speaks louder than words - if we judge banks on their financing decisions since the Paris Climate Agreement, we see they are continuing to amass millions in illegitimate gains from deforestation and leaving affected communities high and dry.
"While we know that preserving forests is high on the agenda at COP26, there is a real risk that governments and the financial sector will continue peddling false and meaningless solutions that fail to effectively address global forest destruction. Global leaders must step up and commit to bringing in government regulation that prevents companies and financial institutions profiting from deforestation."
Many of the world's worst environmental and human rights abuses are driven by the exploitation of natural resources and corruption in the global political and economic system. Global Witness is campaigning to end this. We carry out hard-hitting investigations, expose these abuses, and campaign for change. We are independent, not-for-profit, and work with partners around the world in our fight for justice.
Climate Movement Sounds Alarm on Trump Picking 'Big Oil Sellout' JD Vance for VP
"JD Vance will sell out to the highest bidder, whether that's Trump or the fossil fuel industry," said one Sunrise Movement campaigner. "That makes him dangerous."
Climate campaigners reacted to former U.S. President Donald Trump's selection of Sen. JD Vance as his running mate Monday by highlighting the Ohio Republican's climate denial and strong support for the fossil fuel industry—one of his top campaign contributors.
"Like Donald Trump, JD Vance has proven that he will make it a top priority to roll back climate protections while answering to the demands of oil and gas CEOs," Sunrise Movement communications director Stevie O'Hanlon said in a statement. "Vance is one of Congress' biggest recipients of donations from oil companies."
"JD Vance not only flip-flopped on supporting Trump, he flip-flopped on climate," she continued. "He went from expressing concern about climate change before running for the Senate, to voting to gut [Environmentl Protection Agency] protections and denying that there even is a climate change crisis."
O'Hanlon added: "JD Vance will sell out to the highest bidder, whether that's Trump or the fossil fuel industry. That makes him dangerous. Donald Trump was the worst president for climate in U.S. history. JD Vance will empower Donald Trump to enact even worse damage on our planet in a second Trump administration."
Some of Trump's key first-term Cabinet appointees—including Rex Tillerson, his first secretary of state, and Ryan Zinke, who headed the Interior Department—were former fossil fuel executives or had track records of supporting the oil, gas, and coal industries.
Trump's White House tenure was also marked by an
aggressive rollback of climate and environmental regulations and protections.
Food & Water Watch Action deputy director Mitch Jones said that "just like Trump himself, JD Vance is a fossil fuel backer and climate change denier that poses a serious risk to public health and our environment."
"Among the countless reasons that Trump and Vance shouldn't be elected to lead our country, the duo represents an existential threat to a livable climate future for all Americans and people around the globe," Jones added.
JL Andrepont of 350 Action asserted that "we are facing a dire need to ward off further climate catastrophe and injustice, so let's be clear: JD Vance is another climate-denying authoritarian who poses massive danger to this country."
"He has praised the horrific Project 2025 plan and said there are 'good ideas in there,'" they continued. "He says he would be totally fine with a federal ban on abortion. And as the effects of climate change accelerate at an alarming pace right in front of our eyes, Vance is a strong supporter of the oil and gas industry who claims that climate change is not a threat."
"We must reject him and all climate deniers at the polls," Andrepont stressed.
Targeting Corporate Landlords, Biden to Unveil National Rent Control Plan
"The rent is too damn high—and rent control is a real fix," one group said, praising the proposal.
As former U.S. President Donald Trump secured the Republican nomination and announced his running mate on Monday, Democratic President Joe Biden prepared to unveil a proposal that would cap annual rent increases at 5% for tenants of major landlords.
After Biden briefly previewed the proposal during a press conference last week, The Washington Postreported on the planned announcement Monday, citing three people familiar with the matter. The Associated Press separately confirmed the plan.
Biden is set to formally introduce the proposal on Tuesday in Nevada, which "has seen among the biggest explosions of housing costs in the country," the Post noted. "Democrats have grown increasingly concerned that Trump could win the state in November."
The president, who is seeking reelection, will propose taking a tax benefit away from landlords who hike rents by more than 5% annually, according to the reporting. The plan would only apply to the existing housing stock of landlords who own more than 50 units and would require congressional approval—so it is not expected to go anywhere unless Biden wins in November and Democrats secure majorities in both chambers of Congress.
As the newspaper detailed:
The Biden administration is also pushing numerous policies to increase housing construction, through incentives to local governments to change their zoning codes and new federal financial incentives for builders.If implemented, they could bring 2 million new units to the market in addition to the 1.6 million already in the pipeline.
"It would make little sense to make this move by itself. But you have to look at it in the context of the moves they propose to make to expand supply," said Jim Parrott, nonresident fellow at the Urban Institute and co-owner of Parrott Ryan Advisors. "The question is: Even if we get all these new units built, what do we do about rising rents in the meantime? Coming up with a relatively targeted bridge to help renters while new supply is coming online makes a fair amount of sense."
While housing industry representatives criticized the reported proposal, Diane Yentel, president and CEO of the National Low Income Housing Coalition, told The Associated Press that having it in effect in recent years could have helped renters.
"The recent unprecedented increases in homelessness in communities across the country are the result of those equally unprecedented—and unjustified—rent hikes of a couple years ago," she said. "Had such protections against rent gouging been in place then, many families could have avoided homelessness and stayed stably housed."
Other rent control advocates and progressive officials also welcomed the plan, with Kendra Brooks—the first Working Families Party member ever elected to Philadelphia City Council—declaring that "this is exactly the kind of leadership that working families need!"
Jacobin's Branko Marcetic said that "this is huge," particularly considering that "housing has rapidly climbed as a cost-of-living concern (and is also under 30s' most important issue)."
Multiple campaigners and organizations credited housing advocates for pushing rent control at the national level.
"It's amazing how rapidly the conversation around rent caps has changed," noted Shamus Roller, executive director of the National Housing Law Project. "Tenant organizing has created this change. It's a proposal for Congress which will face serious headwinds but the president just called for rent caps (even if only temporarily)."
The Debt Collective said, "We will say it over and over again: The rent is too damn high—and rent control is a real fix."
"Rent caps wouldn't be a national policy proposal without tenants unions across the country making it possible through organizing," the group added. "On our way to land without landlords, remember that rent control works. The 99%'s need for a roof over our head should not be 1% profits."
Campaigners Demand Global Ban on Deep-Sea Mining
As talks resume, supporters of a moratorium are also calling for the ouster of the International Seabed Authority's leader, who faces an election on July 29.
As talks to establish global policies on deep-sea mining resumed in Jamaica on Monday, Greenpeace International renewed its demand for a moratorium on the practice, the path also backed other civil society and Indigenous groups, at least hundreds of science and policy experts, and 27 countries.
"The science is clear—there can't be deep-sea mining without environmental cost and the only solution is a moratorium. The more we know about deep-sea mining, the harder it is to justify it," said Greenpeace campaigner Louisa Casson, who is attending the United Nations-affiliated International Seabed Authority's (ISA) 29th session in Kingston.
"Governments at the ISA must not dance to the tune of the industry and approve rushed regulations for the benefit of a few over the interests of Pacific communities and the opinion of scientists," Casson argued, as companies and countries see chances to cash in on the clean energy transition by extracting metals including cobalt, copper, and nickel.
"The deep ocean sustains crucial processes that make the entire planet habitable, from driving ocean currents that regulate our weather to storing carbon and buffering our planet against the impacts of climate change."
The Associated Pressreported Monday that although the ISA has not allowed any extraction during debates, it "has granted 31 mining exploration contracts," and "much of the ongoing exploration is centered in the Clarion-Clipperton Fracture Zone, which covers 1.7 million square miles (4.5 million square kilometers) between Hawaii and Mexico."
The Mexican government last year endorsed a moratorium and Democratic Hawaii Gov. Josh Green last week signed a bill banning seabed mining in state waters, citing "environmental risks and constitutional rights to have a clean and healthy environment."
Ahead of the meeting in Jamaica, Deep Sea Conservation Coalition campaign lead Sofia Tsenikli highlighted that "gouging minerals from the seafloor poses an existential threat that goes far beyond the immediate destruction of deep-sea wildlife and habitats."
"The deep ocean sustains crucial processes that make the entire planet habitable, from driving ocean currents that regulate our weather to storing carbon and buffering our planet against the impacts of climate change," Tsenikli said. "States must now protect the ocean and not allow any more damage."
The ISA was established under the 1982 U.N. Convention on the Law of the Sea and a related 1994 agreement, and is responsible for waters not under the control of specific nations. As Common Dreamsreported earlier this month, some diplomats have accused British lawyer Michael Lodge, its current secretary-general, of trying to speed up the start of mining.
"The rush to complete the mining code was triggered by the Pacific island state of Nauru, which is expected to submit a mining license application on behalf of Canada's the Metals Company (TMC) later this year, regardless of whether or not regulations are complete," Reutersnoted Monday.
After ISA's 36-member Council negotiates the "Mining Code" over the next two weeks, its full Assembly is scheduled to meet on July 29 to vote on the next secretary-general, with Lodge facing a challenge from Brazil's Leticia Carvalho for the top post.
"It is time for change at the ISA," Casson of Greenpeace declared Monday. "A third term for Michael Lodge would not only put the oceans under threat but also risk further damaging public trust in the regulator. Mining companies are impatient to get started and mounting evidence indicates that Lodge is overstepping his supposedly-neutral role to align with commercial interests."
"The ISA must listen to millions of people and the growing number of governments calling for a halt to deep-sea mining," she added. "It is time to put conservation at the heart of the ISA's work."
In preparation for the talks in Kingston, Environment Oregon Research & Policy Center, U.S. Public Interest Research Group (PIRG) Education Fund, and Frontier Group last month released a report showing that not only would deep-sea mining destroy "a vibrant, biodiverse place, teeming with complex ecosystems and thousands, possibly millions of species," but also it isn't necessary.
"Disposable electronic devices are creating a toxic e-waste mess. Now, some mining companies are trying to convince policymakers that we need to wreak havoc on the ocean to source the materials to make more," said Charlie Fisher of the Oregon State PIRG Foundation. "This report shows that we don't need to ruin the deep sea to make the products we need. There is a more sustainable path: Make long-lasting, fixable electronics and recycle them when they no longer work."