Six years of the Soft Commodities Compact failed to slow bank finance for deforestation
The Soft Commodities Compact (SCC), an initiative signed by 12 banks which concludes at the end of 2020, has been unable to show any progress towards its target of supporting ‘zero net deforestation’ in the palm oil, soy, cattle, and pulp & paper and timber sectors. (1) This failure shows the urgent need for the banking sector to develop a fresh approach to the urgent crisis facing the world’s forests, concludes a BankTrack report titled “Soft commitments, Hard lessons” released today.
The 12 banks committed under the SCC to support their clients in soft commodity supply chains to reduce deforestation through an approach largely focused on requiring clients to sign up to certification schemes. (2) However, a month from the end of the Compact, none of the banks succeeded in ensuring all their clients were certified by 2020.
Six banks have not even reported on the proportion of their clients that have achieved certification, one month before the Compact ends. These banks are BNP Paribas, Lloyds Banking Group, Rabobank, Société Générale, UBS and Westpac.
Figures extracted from the Forests and Finance website (forestsandfinance.org) show that banks that adopted the Compact have considerably increased their financial exposure to forest-risk companies since 2014. The global rate of forest loss has continued to increase throughout the Compact’s lifetime. (3)