Last summer’s devastating Amazon fires and the more recent Australian fires are a stark reminder of the immediate threats facing the world’s forests. These forests are crucial for the global climate and biodiversity. Current voluntary commitments from companies, and banks, to tackle deforestation have failed to deliver the change in behaviour needed to halt this disastrous environmental destruction. The EU is a key player in global deforestation through its consumption and investments.
The EU imported and
consumed 10% of the global production of crops and livestock products
associated with deforestation over the period 1990-2008.Our latest analysis
of the financing of six agribusiness companies linked to forest destruction
in the climate critical forests of the Amazon, Congo Basin and Papua New
Guinea found that EU-based financial institutions were one of the main
sources of funds and had backed these companies to the tune of €7 billion
between 2013 and 2019.
A broad agreement across the EU institutions is emerging that action, including regulatory measures, are now required to ensure that the EU’s supply chains do not contribute to deforestation.
Key corporate actors, NGOs, including Global Witness, and a growing number of MEPs believe that legislation should include mandatory due diligence. This would require companies to undertake checks to identify, mitigate and prevent risks of deforestation and associated human rights abuses. It is crucial that this does not let finance off the hook.
The 2019 European Commission Communication on deforestation highlighted the importance of redirecting private finance towards activities that are deforestation free. We believe that this will only occur through a coherent approach that places the same due diligence obligations on supply chains and banks.
In our latest briefing we set out the reasons why it is crucial that finance is not exempt from any forthcoming legislation addressing the EU’s global deforestation footprint.
EU action to require companies, including banks, to take responsibility for their impacts on the environment and human rights is essential if the EU is to tackle its own role in the climate and deforestation crisis.
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