European banks are injecting hundreds of billions into sectors that destroy nature

Since the Paris agreement, European banks have lent around 256 billion euros to companies active in sectors that threaten forests and other natural spaces fundamental to the fight against climate change. Some of these financial institutions also operate in Belgium. This is what reveals a new report from the design office Deepcommissioned by Greenpeace International.

The report analyzed the relationships between European financial institutions and 135 large companies whose activities threaten nature. The study focuses on a period extending from 2016, just after the Paris Agreement, until 2023. (1) It appears that the European financial sector supported these problematic companies to the tune of 256 billion euros of credit and 60 billion euros of direct investments. The European financial sector is therefore the second largest provider of funds to these companies globally, behind the financial sector of the United States.

The report also looks at the activities of six international companies: commodities traders Bunge and Cargill, meat producers JBS and Marfrig, and palm oil and pulp giants RGE and Sinar Mas. These companies have repeatedly been linked to deforestation and human rights violations in recent years.

“Europe likes to profile itself as a great defender of nature, at the forefront of the fight against the climate crisis… But it paradoxically turns a blind eye when its banks finance the massive destruction of nature and violations of human rights. It is unacceptable. We cannot fight the climate crisis and the collapse of biodiversity while financing the destruction of nature”declared Philippe Verbelen, biodiversity campaign manager at Greenpeace Belgium.

Belgian banks

The report highlights the role of Belgian financial institutions. During the period studied, the KBC group, BNP Paribas, the ING group and Deutsche Bank granted 100 billion euros of credit to sectors that destroy nature. Together with smaller players like Argenta, Belfius Bank, Ackermans & van Haaren and Bank Degroof Petercam, these same banks have also invested 8.8 billion euros in sectors at risk for climate and nature.

This represents 39% of total credits and 15% of total investments within the European Union.

100% state-owned Belfius Bank offers investment products to its clients through Candriam Belgium, which has invested €261.1 million in the climate and natural risk sectors.

Banks escape European law against deforestation

In May 2023, a European regulation combating deforestation (EUDR) was adopted. This was an essential first step in ending European involvement in the destruction of nature on a global scale. This law should make it possible to remove from the European Union market, from 2025, products that contribute to deforestation.

But this regulation does not apply to financial institutions. This leads to a paradoxical situation where European banks are authorized to finance companies involved in deforestation, while the products of these same companies will be banned from the European market.

Greenpeace and the other organizations that commissioned this report are calling for European regulation to prevent financial flows to companies that destroy nature. The financial sector must urgently be forced to meet global climate and biodiversity targets.

“Our report clearly demonstrates that banks and investors continue to pump billions of euros into companies that destroy nature, and will only stop doing so if they are forced to do so. Jewels of our biodiversity, also essential to the stability of our climate, such as the tropical forests of the Amazon, Southeast Asia and the Congo Basin, or the boreal forests of the North, are disappearing at an alarming rate. The EU must urgently regulate its financial sector and end its destructive flow,” concludes Philippe Verbelen.

Note

(1) The report 'Bankrolling ecosystem destruction' is based on data collected and analyzed by the independent research organization Profundo. It is published by Greenpeace International, Milieudefensie (Friends of the Earth Netherlands) and Harvest. In Belgium, the NGOs FairFin and BOS+ also support the report.

ContactGreenpeace Belgium press service: 0496 26 31 91 – (email protected)

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