Since 2015, EU banks have funded sectors that threaten nature and climate with €256bn.

A report by Greenpeace International, Milieudefensie and Harvest supported by 18 organisations, including BankTrack, is now calling for EU regulation to stop financial flows to these nature-destructive businesses.

The study is based on data compiled by the independent research organisation Profundo. The study focuses on JBS, Cargill, Sinar Mas and other major global producers, processors and traders of soy, cattle, palm oil, rubber, timber and other commodities that carry a high risk of ecosystem destruction, and the financial institutions that finance them. The EU is the second-largest global financial hub bankrolling these commodities sectors.

The report shows that some of the largest banks based in the EU, such as BNP Paribas, Santander, Deutsche Bank, ING Group and Rabobank, provided 22.1 per cent of total global credit between 2016 and early 2023 to the major players in sectors that put nature at risk. The vast majority (86.6 per cent) of this European credit came from banks based in France, the Netherlands, Germany and Spain. Banks, pension funds, and asset managers based in the EU also provide 9.4 per cent of current global investments to nature risk sectors.

“Europe [the EU] thinks highly of itself for climate and nature protection but looks the other way as its banks pour money into companies linked to massive nature destruction and related human rights abuses. There is a clear pattern, the EU financial sector’s links to ecosystem destruction are widespread. We can’t fight the climate crisis and ecological collapse while at the same time bankrolling extinction,” Said Sigrid Deters, biodiversity campaigner at Greenpeace Netherlands.

The EU deforestation regulation, adopted in May 2023, is a first step towards meeting the EU’s global climate and biodiversity commitments, yet whilst current EU rules address physical products placed on the EU market that put forests at risk, they do not cover the money flowing to ecosystem destruction. The European Commission is on a timetable to review the role of finance in deforestation and forest degradation and, if necessary, make a legislative proposal by June 2025.

Environmental and human rights organisations are urging the EU to close this loophole in the law and stop financial flows to nature destruction.

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