The financial sector is having a detrimental impact on the European Union’s efforts to combat nature destruction, according to a report by Greenpeace International. Despite global agreements such as the 2015 Paris Climate Accord and the 2022 Kunming-Montreal Biodiversity Framework (KMGBF), there is a lack of political will to hold financial enablers accountable for their involvement in activities driving nature destruction and climate change.
Greenpeace International’s recent research, conducted in collaboration with several non-governmental organisations, has revealed that European banks have provided almost €256 billion to major corporations involved in sectors such as soy, palm oil, and cattle since 2015. These activities pose a risk to rainforests, savannahs, and other critical natural ecosystems.
Companies that have received this funding are reported to have links to recent nature destruction, including the Brazilian livestock giant JBS, US-based food commodities company Cargill, and Indonesian conglomerate Sinar Mas. The EU finance sector’s provision of 22.1% of total global credit to these sectors highlights the significant influence of European banks in driving nature destruction.
Although the EU has enacted the EU Deforestation Regulation (EUDR) to ban products associated with deforestation from its market, the regulation does not currently cover the finance sector. An upcoming review of the EUDR presents the European Commission with an opportunity to propose a legislative framework to address the EU finance sector’s impact on nature worldwide.
One of the key concerns highlighted by Greenpeace International is the exclusion of the finance sector from environmental regulations, such as the EUDR. As extreme weather events continue to affect the globe, it is crucial to include the finance sector in these regulations and prevent business as usual for banks.
To achieve the targets set out in the Paris Climate Agreement and the KMGBF, it is imperative to halt the expansion of industrial activities into forests and natural ecosystems. Additionally, financial services that contribute to ecosystem destruction, such as credit and investment to corporations linked to nature destruction, must be discontinued.
Greenpeace International emphasizes the need for a shift in the consciousness of those profiting from nature destruction and urges action to protect and restore nature. The organisation also calls on the EU to effectively regulate money flows to companies linked to the destruction of forests and other ecosystems and to fund the protection and restoration of nature.
Furthermore, Sigrid Deters, a biodiversity campaigner at Greenpeace Netherlands, emphasizes the critical nature of taking concrete and meaningful action to stop the flow of money towards nature destruction, an essential step in addressing the climate crisis and biodiversity collapse.
In conclusion, addressing the influence of the financial sector on nature destruction is paramount in achieving global environmental goals. It is essential for governments and international bodies to take decisive action in regulating and redirecting financial flows to protect and restore nature. By doing so, the EU and its member states can truly live up to their commitments and lead by example in the global fight against climate change and biodiversity loss.