- A joint investigation by several conservation groups looked at more than 560 financial transactions involving more than 280 banks and 80 oil and gas companies with activities in the Amazon.
- It concluded that what the banks claim to be doing for the environment is far different from the “true impacts of their policies.”
- Some of the biggest bankrollers of oil and gas (Citibank, JPMorgan Chase, Itaú Unibanco, Santander, Bank of America) only apply their policies to about a third of the rainforest, leaving the rest vulnerable to potential environmental destruction.
- The report said banks need to end their relationships with all oil and gas companies in the Amazon if countries in the region are going to protect 80% of the rainforest by 2025.
There are hundreds of oil and gas operations across the Amazon Rainforest. And while critics have gone after them for reckless environmental damage, those companies also don’t work alone. They need support from big banks that provide direct funding through loans and underwriting bonds, which themselves need to be regulated, critics say.
In recent years, increasing pressure on the banks has led to new environmental policies meant to minimize financing for projects tied to deforestation, pollution and human rights violations. The banks tend to celebrate their policies for being ambitious and effective. But many environmental groups say they’re actually far from adequate, and even amount to greenwashing.
A joint investigation by several conservation groups looked at more than 560 financial transactions involving more than 280 banks and 80 oil and gas companies working in the Amazon, concluding that what the banks claim to be doing for the environment is far from the “true impacts of their policies.”
In fact, some of the biggest bankrollers of oil and gas (Citibank, JPMorgan Chase, Itaú Unibanco, Santander and Bank of America) only apply their policies to about a third of the rainforest, leaving the rest vulnerable to potential environmental destruction. The areas where the policies do apply still aren’t completely protected, the report said.
“Through their deceptive policies and empty promises, these banks are attempting to greenwash oil and gas extraction in the Amazon, and obscure the destructive impacts of their ecosystem-devastating investments,” said report co-author Angeline Robertson, senior investigative researcher at Stand.earth. “They claim to care about climate change, biodiversity and Indigenous Peoples, but these commitments mean nothing until banks stop pouring fuel on the fire by funneling billions into brutal oil and gas expansion in the region.”
The report was co-published by Stand.earth and the Peru-based Coordinator of Indigenous Organizations of the Amazon River Basin (COICA), with the support of several other Indigenous advocacy and conservation groups in the region.
Their investigation analyzed banks’ environmental and social risk management policies (ESRMs), which in basic terms are a set of criteria used to decide whether a company should receive financing. In some cases, the criteria could be the location of the operation — is it inside a protected area? Is it near Indigenous territory? — or the track record of the company carrying it out.
Most banks have some version of an “exclusion” policy prohibiting certain parts of the Amazon from financing, such as UNESCO World Heritage Sites, Ramsar sites and official protected areas. But a lot of the rainforest doesn’t fall under those categories. Only HSBC has prohibited financing across the entire Amazon, while JPMorgan Chase and Citibank have prohibited funding in only 2% of the region. Santander has only prohibited 16%, or around 1.33 million square kilometers (513,000 square miles).
In a statement, a JPMorgan Chase spokesperson said it supports the fundamental principles of human rights, including Indigenous people’s rights. Santander said it understands the importance of protecting the Amazon and supporting sustainable development in the region.
“We are also actively involved in several industry initiatives to protect the region and work proactively with clients, as well as other banks, governments, regulators and other institutions to help improve practices, recognizing this is a highly complex challenge that requires a multifaceted, multi-lateral response,” a Santander spokesperson said in an email.
Bank of America declined to comment for this article. Other banks didn’t respond to a request for comment, but told the report authors they were concerned about the climate crisis and the rights of Indigenous people.
Other screening and due diligence measures look at the kind of technology a company would use to extract and process oil and gas, as well as a company’s internal standards for avoiding environmental risk. Yet many of those measures are only triggered in certain parts of the Amazon, and only for certain types of financial transactions.
Only around 40% of the Amazon is “screened” by Citibank and Bank of America, while Santander only screens 24% of it. Itaú Unibanco has no exclusion or screening policies at all.
Only HSBC has exclusion policies that cover 100% of the Amazon for oil and gas.
“Without the constraints offered by well-crafted bank policies, Amazonia will continue to be destroyed by the influx of money to companies whose activities not only violate Indigenous Peoples’ rights and cause deforestation, pollution and biodiversity loss, but also accelerate the climate crisis and contribute to corruption in the governments and institutions of the region,” the report said.
Weak policies have real-world impacts, the report argued. In Ecuador, oil and gas concessions in the Amazon overlap with 45,000 km2 (17,400 mi2) of Indigenous land, affecting well over half of all Indigenous people with thousands of spills and other forms of contamination.
Peru has around 380,000 km2 (146,700 mi2) of oil and gas concessions, of which 104,000 km2 (40,200 mi2) overlap with primary forest.
The report said banks need to end their relationships with all oil and gas companies in the Amazon if countries in the region are going to protect 80% of the rainforest by 2025. That would involve not taking on new oil and gas clients, ending contracts with current ones, and halting trade financing for oil and gas. The report also urged banks to adjust their portfolios to prioritize combating biodiversity loss and the climate crisis.
“The banks try to wash their hands of the blame through vague policies, but must be held accountable for the damage their money is causing to Amazonian Indigenous Peoples and the biodiversity of the rainforest,” said Fany Kuiru, general coordinator of COICA. “Not a single drop of Amazon oil has been extracted with the consent of Indigenous Peoples. We demand Citibank, JPMorgan Chase, Itaú Unibanco, Santander and Bank of America to end oil and gas financing.”
Banner image: An oil pumpjack. Photo by CRI.
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Ten years since anti-deforestation pledge, corporate world still not doing enough
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