Starving damaging projects of funds
27 março 2015
Starve a project of its money and it will be unlikely to continue. This approach is effective, but tackling them project by project is too slow; making changes in finance policy to prevent the investment in the first place would undoubtedly be more efficient. EU financial institutions provide funding to large-scale agriculture corporations that export to the EU. According to Fern’s recent analysis, 20 EU-based institutions have underwritten some USD18 billion of investment in agricultural companies, including to deforestation hotspots of Indonesia, Brazil and Malaysia.
Clear Cut: The case for making EU financial institutions work for people and forests examines the activities of different financial institutions and their involvement in forest-risk agriculture. It investigates specific voluntary policies intended to address environmental, social and governance issues and the problems that arise with such measures (e.g. lack of public oversight and inability to enforce). The report examines the financial context in which investment takes place, and the factors that have contributed to an ‘agricultural gold rush.’ Finally, Clear Cut explores options for EU-based financial institutions to limit their role in funding and facilitating agricultural projects that destroy forests, often illegally, and that violate local peoples’ tenure rights. It suggests undertaking in-depth research focused on banks and private equity to better understand that role, strengthening existing EU financial rules and introducing new regulation that targets investment in destructive commercial agriculture.