The research, undertaken by Global Witness and shared exclusively with Sky News, reveals the scale of investments made in the controversial and destructive agribusiness and, for the first time, calculates that financial institutions in the UK, Europe, in the United States and China which are likely to have made $ 1.84 billion (£ 1.33 billion) in revenue from such transactions.
All the transactions analyzed were carried out from Paris Weather Agreement in 2016, when many banks and investors are committed to aligning their activities with its stated objectives.
This has led to the claim that many of these companies say one thing and do another when it comes to the climate.
The report analyzed 70,000 stocks, bonds, credit and underwriting contracts between financial institutions based in Europe, the United States and China with 20 of the most incriminated agribusiness companies with well-documented links to deforestation.
He found that the total deals were worth $ 157 billion (£ 120 billion). The largest global investor in these companies was US bank JPMorgan, which struck deals worth $ 9.38 billion (£ 7.18 billion).
UK banks and asset managers, meanwhile, provided around $ 16.6bn, or around $ 192m (£ 147m) from Deforestation– related financing.
HSBC was Britain’s largest financier of destructive agro-industries, closing deals worth $ 6.85 billion (£ 5.25 billion).
“The commodities, the things that lead to the destruction of tropical rainforests are beef, soybeans, palm oil crops. And it’s all incredibly funding-intensive, ”says Kenza Bryan, author of the report and investigator at Global Witness.
“Without the support of the financial system these raw materials would not be produced and they would not be produced on deforested land, so we are showing all the ways the financial sector and the City of London are driving tropical deforestation. “
Deforestation is not only deeply damaging efforts to curb climate change, as large amounts of global carbon dioxide are stored in trees, but it also has dire implications for local and indigenous communities.
Many of the financial institutions cited in the report have also made public commitments to tackle the global climate crisis.
For example, HSBC has reportedly generated nearly £ 30million from these transactions since 2016.
And this despite the fact that the company has committed to no longer finance companies linked to deforestation in 2017.
“The banks we focus on are multi-billion dollar companies,” Bryan said. “They’re really good at telling us how green they are, but what we found was this gaping hole between what they say in public and what they actually do.
“So when you follow the money and look at their sources of income, look at their stocks, you realize that they are not as clean as they say they are. “
An HSBC spokesperson said, “HSBC has exited, is exiting, or has no forestry, palm oil or livestock related banking relationships with the majority of the entities named in the report.
“We proactively engage with our customers and help them ensure they are operating in accordance with international best practice, but end relationships with customers who do not comply with our policies.
“We are committed to fighting deforestation and will continue to develop our policies and practices, in accordance with new guidelines for best practices.
“In some cases, HSBC’s name may appear on a company share register where we act as agent or custodian for our clients. HSBC is not the beneficial owner of these shares and has no influence on the investment decision of its custodian clients or as a shareholder of the entities in which they invest.
There is nothing illegal about these transactions and due to the complexity of the global financial system many can be difficult to unwind.
But it is for this reason that many are calling for a change in the law.
The government’s flagship environmental bill is due next week and many activists say it’s the perfect excuse to regulate.
MP Neil Parish is chairman of the select committee on the environment and tabled an amendment to the bill that would have helped ban some of these agreements, but it was defeated.
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“Legislation is still important because then you can go to these big banks, big companies and actually say that you have acted illegally, you have to stop and we can take direct action,” he said.
“I think the government has come a long way in the environment in the direction we want. What they don’t particularly want is to make direct legislation, but I think they should do it because then companies will have to take that into account. “
JPMorgan declined to comment on the report.
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