Trillions in bank loans linked to reduction in biodiversity
The world's 50 biggest banks are providing loans and underwriting services to industries that are contributing the most to biodiversity loss.
In 2019, the total was $2.6 trillion, or an average of $52 billion per bank, according to Portfolio.Earth, a collaboration of experts who are focusing on the financial world's effect on biodiversity. They have engaged with groups including non-profit Amazon Watch and Carbon Tracker. The leading financiers were the three biggest U.S. banks, Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co., the report says.
"None of the banks have chosen to put comprehensive policies or sufficient systems in place to monitor or measure the impact of their loans on biodiversity," Portfolio.Earth said Wednesday.
The earth's biodiversity, which encompasses everything from microbes to endangered species, is declining faster than it has at any other time in human history, according to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, which is working with Portfolio.Earth.
Biodiversity loss, which is a result of human activity from pollution to extractive mining, is fast-becoming an economic issue: It ranks as one of the top five threats facing humanity in the next decade, according to the World Economic Forum.
Portfolio.Earth said banks have largely avoided scrutiny related to biodiversity and regulation has protected them from the consequences. The group called for banks to disclose and "radically reduce" their impact on nature and end their financing of fossil fuels, deforestation and overfishing. They also said policymakers need to rewrite the rules of finance to hold banks liable for the damage caused by their lending.
Portfolio.Earth worked with Profundo, a Dutch non-profit that analyzes business and financial impacts on sustainability, and U.K. consulting company Vivid Economics for help on calculating the totals for bank financing. Profundo used data from Refinitiv, while Vivid Economics worked on methodology and auditing.