Banks helping fund destruction of Amazon rainforest, environmental group claims
Institutions ‘complacent’ and not making best use of risk management policies, Stand.earth says. By Jon Sharman
Major banks’ investments in fossil fuel extraction are putting at risk the Amazon rainforest and the wider global climate, with the ecologically vital region now at a “tipping point”, according to a new report by activists.
Stand.earth accused the institutions of being complacent and failing to do all they could to protect the rainforest, despite having policies in place that purported to screen out risky ventures.
The Canadian pressure group analysed 14 top US and European banks for its report, released on Thursday.
In broad terms, Stand.earth said: “We found that banks are being complacent – putting the burden on stakeholders with less power and means to raise issues, without clear policy on how their voices will be heard or how recourse will be just.”
The group added: “By waiting for stakeholders to sound the alarm, banks are not addressing shortcomings in their policy implementation until frontline communities have already borne the brunt of negative impacts in the Amazon.
“In addition, the research found that the banks analysed in this scorecard have a major blind spot in their lending practices. They create syndicated renewable loans [known as] revolving credit facilities worth billions of dollars for their oil trading clients, but don’t have adequate oversight on how the money will be spent.
“Oil traders could feasibly spend it on whatever they decide ‘general corporate purpose’ entails, without enough scrutiny by banks to detect environmental and social risks or corrupt business practices.”
Stand.earth said that the Amazon was now at a “tipping point”. It added: “Further oil and gas extraction, a major driver of deforestation, will push the biome – essential for climate change mitigation and home to 400-plus indigenous nationalities ... to the brink of irreversible collapse.”
Fossil fuel extraction drives deforestation, Stand.earth said, through road-building in previously untouched areas, which then opens those locations to exploitation.
Banks should refuse to finance oil and gas extraction in the Amazon as many have already done for the Arctic, the group added. It called for this step to be taken by the end of 2021.
In awarding its grades to each bank, campaigners balanced the institutions’ use of positive risk management policies against their exposure to those risks. Rabobank, of the Netherlands, was rated highest with a “B” grade and a “moderate” risk rating, followed closely by ABN AMRO and ING.
Five institutions – Citigroup, Goldman Sachs, Deutsche Bank, HSBC and JP Morgan Chase – received “F” grades and “very high” risk ratings.
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