Some banks are moving away from financing the development of the vulnerable Amazon rainforest, but most financial sector actors continue to play some role, critics say, by fueling corruption, human rights abuses and damage. environmental despite the commitments that are increasingly part of popular environmental and social policy. and governance (ESG) investment movement.
That’s the position of environmental groups Stand.earth and Amazon Watch in a new dashboard and report released early Thursday.
âTo put it simply, the current ESR of banks [environmental and social risk] policies fail them. These policies do not properly manage risks, are not strong enough to prevent the destruction of the Amazon, and do not address the urgent need to stop the expansion of fossil fuels globally, âsaid Angeline Robertson, principal investigator at the Stand.earth Research Group and one of the main authors of the report.
Banks provide billions of dollars in revolving credit facilities to their oil trading customers, but don’t always ask how the money will be spent, meaning customers can fund projects, transactions and transactions. companies that would not otherwise pass ESR screening of banks. process, according to the report.
Lily: The inclusion of these U.S. fund managers means that nearly half of all managed asset funds globally are linked to the climate change commitment.
The authors said the change in stance by the influential International Energy Agency earlier this year is expected to put further pressure on the banks. The IEA has said the world must stop investing in new oil and gas wells in order to meet ambitious climate targets by 2050.
Rabobank, ABN Amro and ING are at âmoderateâ risk; BNP Paribas, Credit Suisse, UBS, SociÃ©tÃ© GÃ©nÃ©rale and CrÃ©dit Agricole are exposed to a âhighâ risk; and Natixis, Citigroup, JP Morgan Chase, Goldman Sachs, Deutsche Bank and HSBC are at âvery highâ risk. All banks received a summary of their rating and were given an opportunity to respond before the report was released.
In a separate report released earlier this year, findings from a handful of climate organizations, including the Rainforest Action Network, showed that some 60 of the world’s largest commercial and investment banks have invested a total of $ 3.8 trillion. dollars in fossil fuels from 2016 to 2020, five years after the voluntary signing of the Paris Agreement. The goal of the multinational pact is to limit global warming to well below 2 degrees Celsius, and preferably 1.5 degrees, from pre-industrial levels. Beyond the financing of oil fields, global coal projects also continue to be financed.
Among the main findings of the Stand.earth and Amazon Watch report:
BNP Paribas BNP,
Credit Suisse CS,
SG Goldman Sachs,
JPMorgan Chase JPM,
Credit Agricole ACA,
Deutsche Bank DB,
and UBS UBS,
hold hundreds of millions of dollars in bonds issued to PetroAmazonas, the oil exploration unit of Ecuador’s national oil company, PetroEcuador. PetroAmazonas is leading oil expansion in YasunÃ National Park, a UNESCO biosphere reserve, where the process of building roads to access new oil drilling sites often triggers deforestation and brings drilling to peoples’ doorstep indigenous people living in voluntary isolation. The company is responsible for thousands of oil spills over the past decade.
Funding from Credit Suisse funds the oil trade from the Putumayo region of the Colombian Amazon, which faces strong indigenous resistance and brutal police repression, despite existing biodiversity and human rights policies that make it clear that ‘it shouldn’t fund in the region, advocacy groups say. in their report.
Lily: Here are the oil and gas companies whose methane emissions intensity is 6 times higher than the national average (hint: these are not the majors)
Societe Generale, ABN AMRO ABN,
CrÃ©dit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, ING ING,
Rabobank and UBS all provide financing through revolving credit facilities to problematic oil traders, including Gunvor and Vitol, who have been implicated in recent corruption scandals.
“This is happening although all banks have corruption policies, but only view it as a business risk and do not include it in their ESR frameworks,” say the report’s authors.
JPMorgan Chase is the world’s largest fossil fuel industry banker and continues to fund Brazil’s national oil company, Petrobras, which is ranked among the world’s largest fossil fuel expansion companies.
The new report, titled âBanking on Amazon Destruction,â follows an August 2020 investigation that revealed European banks were financing the Amazon oil trade from the source region of Ecuador and Peru. This led the big banks to pledge to abide by their policies and end trade finance in this region, but the 2020 survey also revealed additional relationships between banks, oil companies and oil traders. at odds with banks’ ESR policies and risk management selection processes in the wider Amazon rainforest.
The groups demand that lenders commit to end all revolving loans, letters of credit and credit facilities for all oil traders (especially those involved in corruption controversies) active in the Amazon biome as soon as possible , or by the end of 2024 at the latest.
And they want a commitment to end all existing oil and gas funding and investment in the Amazon biome as soon as possible, or at the latest by the end of 2025.
For its rating, advocacy groups said they were not considering positive actions such as commitments to sustainable investments and funding because, they said, âthese are not measures of Significant mitigation for the Amazon oil and gas field impacts. The groups gave positive ratings to all material risk management strategies for key issues relevant to the Amazon (oil expansion, deforestation, biodiversity loss, indigenous rights, pollution and corruption), as well as strategies for stakeholder and customer engagement.
Banks were informed of the results ahead of publication.