Major Banks Accused of Failing to Protect the Amazon Rainforest

A recent report highlights a troubling gap in the environmental commitments of the world’s largest banks, revealing their significant role in the degradation of the Amazon rainforest. The investigative study, conducted by Stand.earth in collaboration with the Coordinating Body of Indigenous Organizations of the Amazon Basin (COICA), critiques five major banks—Citibank, JPMorgan Chase, Itaú Unibanco, Santander, and Bank of America—for their financial involvement in oil and gas projects that threaten the Amazon.

Source: Financial Times/YouTube

Despite public statements promoting ethical policies aimed at safeguarding forests, biodiversity, and indigenous territories, the report finds that these institutions’ guidelines do not effectively protect over 70% of the Amazon region. On average, the banks’ risk management strategies fail to cover critical aspects such as Climate change, forest conservation, and the rights of Indigenous and local communities, with 71% of the Amazon left vulnerable.

JPMorgan Chase, for example, has been identified as having one of the weakest biodiversity protections, with guidelines applying only to UNESCO World Heritage sites, which constitute a mere 2% of the Amazon. Meanwhile, Santander, recognized as Europe’s largest financier of oil and gas in the Amazon, has an exclusion policy that covers 16% of the area, yet the majority of its transactions lack transparency due to the prevalent use of syndicated bonds.

The investigation utilized the Stand’s Amazon Banks Database to examine 560 transactions involving 280 banks over the past two decades, revealing a common trend of deal structures that bypass stringent environmental and social governance (ESG) exclusions.

In a positive light, the report commends HSBC for its proactive measures. Having once been a significant player in funding destructive projects in the Amazon, HSBC has not provided any financing since it adopted a 100% Amazon exclusion policy in December 2022. This shift demonstrates a potential path forward for other financial institutions.

The report’s findings underscore the need for comprehensive geographical exclusions in bank policies to prevent further damage to the Amazon, vital not only for its biodiversity but also as a crucial carbon sink in the fight against climate change. As banks continue to finance activities contributing to the destruction of the Amazon, they face increasing scrutiny and calls for accountability to strengthen their ESG commitments and to cease financing harmful oil and gas extraction in the region.

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