Mercoledì, 17 Aprile 2024

European banks invest tens of billions in companies that destroy the planet

22.1% of global credit and 9.4% of global investments that end up in sectors damaging the environment come from EU financial institutions, Greenpeace denounces

Hundreds of billions are invested in activities that destroy ecosystems and therefore jeopardize the planet's future, contributing to climate change. Some of the major European financial institutions are accused of unsustainable investments. Greenpeace points the finger at institutions such as Bnp Paribas, Santander, Deutsche Bank, Ing Group, and Rabobank. In its latest report the environmental organization states that some of the largest European banks have invested €256 billion in activities involving deforestation and biodiversity loss since 2015.
According to the environmental NGO, these institutions have financed soy, palm oil producers, cattle farmers, and other environmentally damaging industries with 22.1% of global credit from 2016 to 2023. Funds have gone to companies like Jbs, Cargill, Sinar Mas, and others that are claimed to have direct or indirect ties to recent cases of deforestation in South America and Southeast Asia.

Most of these institutions (86.6%) providing credit are based in France, the Netherlands, Germany, and Spain. As for investments, 9.4% of the total global investment in these sectors comes from the EU, which is the second-largest financier of global raw materials extraction, processing, and trade. "There is a clear pattern, the EU financial sector’s links to ecosystem destruction are widespread," denounced Sigrid Deters, biodiversity campaigner at Greenpeace Netherlands. "We can’t fight the climate crisis and ecological collapse while at the same time bankrolling extinction," she added.

Deforestation is one of the main issues leading to climate change, and European states do not seem determined to adequately combat this phenomenon. Seven states, including Italy, are seeking to delay the implementation of the EU anti-deforestation regulation (European Deforestation Regulation, EUDR), adopted in May 2023, and aim to intervene in a review scheduled for June 2025. This law aims to reduce the impact that the cultivation and production of certain products, such as soy or timber, have on the environment and indigenous populations.

Companies wishing to put their products in the European market must demonstrate that these products do not come from lands that have been deforested or degraded after December 2020. The group of states led by Austria would like to reduce the effectiveness of this law proposing not to apply these rules to small farmers, for whom the measure will become mandatory from June 2025. "The implementation of the EUDR will negatively affect sustainable and small-scale agricultural and forestry practices in the European Union, while third countries are only banned from importing into the EU," reads the text of the seven as reported by Euractiv.

Even if the legislation were to be applied as it is now, without exemptions for small farmers, another problem stays - the financial sector is not regulated, and therefore banks, as Greenpeace alleges, can continue to invest in unsustainable sectors. "Current legislation does not address financial flows linked to ecosystem destruction," said Martina Borghi, Forest campaigner at Greenpeace Italy. "The revision planned by June 2025 represents a crucial opportunity to fill this gap," the activist adds, who, unlike the group of seven states, would like the occasion to be used to make rules even stricter.

"If this opportunity is ignored, the EU will find itself in a paradoxical situation where its financial sector continues to facilitate and profit from the destructive activities of companies that produce, work, and supply the global market with products contributing to ecosystem destruction," Greenpeace concluded. The NGO is asking the EU to improve the EUDR extending the Regulation's obligations to financial institutions and ensuring that banks and insurance companies do not fund businesses and activities that destroy forests and other vital ecosystems.

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European banks invest tens of billions in companies that destroy the planet

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