23 December 2021

Dutch banks lead the European credit to deforestation

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From 2016 to 2020, lenders in the Netherlands financed global deforestation with more than €3 billion. Palm oil and soybeans the main beneficiaries

by Matteo Cavallito

 

The Dutch banks are the continental leaders in supporting forest destruction according to a survey released in recent weeks by the NGO Friends of the Earth and the independent research company Profundo. The study, in particular, focuses on the activities of the three banking giants of the Netherlands – ING, Rabobank and ABN AMRO – which, between 2016 and 2021, have financed with 3.1 billion euros the commodity sectors most linked to deforestation and the violation of human rights.

“In the midst of a climate and biodiversity crisis, we’re putting our money into exacerbating it and adding fuel to the fire! It’s the world upside down,” notes Wouter Kolk of Friends of the Earth Netherlands. “A legal obligation must be introduced that will require financial institutions to have climate-proof, deforestation-free portfolios.”

More than 2 billion from banks for soy and palm oil

The study analyzed the financial flows that for five years have connected the banks of the northern European country with the industries. Many segments were observed, including meat, paper, rubber, cocoa and coffee. Palm oil (1.7 billion) and soy (458 million for the latter) alone have been able to attract as much as 2/3 of the credits granted by the banks.

And it’s not just a matter of lending, of course. At the end of 2020, the Dutch financial sector, including pension funds and insurance companies investing in companies’ share, had total holdings of 362 million in deforestation-driven comodity sector. Three quarters of which in the livestock and palm oil industries.

From European banks 7.6 billion of loans to deforestation

The 3.1 billion loans granted by Dutch banks – in detail 1.4 billion for Rabobank, 895 million for ABN Amro and 850 for ING – represent a unique situation. In Europe, in fact, French institutions have granted loans for 1.9 billion euro. In third place, according to the study, are Spanish banks (1.3 billion) which come ahead of German institutions (644 million).

Banks in other countries, including Italy (276 million), Sweden, Belgium, Austria, Cyprus and Portugal, are farther behind. Total loans taken out by the ten countries surveyed amount to almost 7.6 billion. The main recipient of Dutch loans is Indonesia, which has lost 10% of its primary forests since the beginning of the century, with 63% of the total (around 2 billion euros). The country is followed by Brazil, another big deforestation contributor, which has received 430 billion, or 17% of the credits, and Malaysia (541 million, 14%). Finally, the remaining 7% has been shared almost equally by Peru, Cambodia and Laos.

EU takes first step against global deforestation

In November, the European Commission presented its proposals to block the import of raw materials linked to deforestation. In particular, Brussels wants to require continental companies to track the exact origin of imported products in detail. Member States will be responsible for carrying out controls on the most critical commodities (wood, soy, meat, coffee, cocoa and palm oil together with some derivative products). The regulation approved by the Commission will now have to be examined by the Council and Parliament.