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Bank loans under scrutiny for harm to wildlife and climate

Bank loans under scrutiny for harm to wildlife and climate


LONDON (Reuters) – Activists on Wednesday called on global banks to stop financing industrial activity that is driving the extinction of plant and animal species, after a report ranked 50 banks involved in industries that pose the greatest threat to wildlife.

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While banks in Europe and the US have faced pressure for years from regulators or environmental groups to act on climate change, they have also come under increased scrutiny for their role in financing economic activity that destroys biodiversity .

Portfolio.earth, a network of researchers who published its “Funding Extinction” report here, says no lender has an adequate system in place to limit the impact of its lending on the web of plant and animal life that supports human well-being.

“Banks are starting to realize that if they invest in industries that contribute to climate change, it’s hurting their returns,” portfolio.earth director Liz Gallagher told Reuters. “Banks need to understand that the same is true of biodiversity destruction.”

In 2019, the 50 banks lent and underwrote more than $2.6 trillion to industries including industrial agriculture and fishing, fossil fuels and infrastructure, which scientists say are the leading causes of biodiversity loss, the report found.

Kai Chan, an environmental scientist at the University of British Columbia and lead author of a global study published last year that found a million species are at imminent risk of extinction, agrees with the finding.

“Imagine a world where projects are funded only when they prove they can make a meaningful and positive contribution to restoring a bountiful planet and a safe climate for all? This is the future envisioned and built in this report,” he said.

Bank of America BAC network and Citigroup ChinaThe company, which is listed as one of the top 10 lenders, declined to comment and briefed Reuters on existing sustainability commitments.BNP Paribas national oil companyRanked highly, too, but said the authors hadn’t contacted the company or shared their methods, so they couldn’t comment.

HSBC HSBA.LThe firm, also in the top 10, noted that it partnered with climate change consultancy Pollination Group in August to create an asset management business focused on “natural capital,” which aims to value resources such as water and soil. and air help protect the environment.

Daniel Klier, Global Head of Sustainable Finance at HSBC, said: “Climate and nature are inextricably linked, and the financial services industry can help clients shift their business to low carbon and make sound investments to preserve and protect nature and biodiversity .”

Banks also point out that they support various biodiversity initiatives such as the new Task Force on Nature-related Financial Disclosures tnfd.info which aims to increase transparency in companies and the financial sector, but some investors want more.

The report highlights the risks associated with lending to industrialized agriculture, a major cause of biodiversity loss, especially when tropical forests in the Amazon or Asia are cleared to grow cash crops.

“This report from portfolio.earth confirms our findings that global banks still need to do more to develop ways to protect biodiversity,” said Peter van der Werf, senior engagement specialist at Dutch asset manager Robeco. Reuters .

Reporting by Matthew Green; Editing by David Gregorio



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