Wall Street banks fuel NYC-scale deforestation in Paraguay

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This appears to be part of a wider trend of financial institutions failing to act on deforestation.

Last year, fewer than half (45%) of global financial institutions with the greatest exposure to deforestation-risk had published a single policy on this topic, according to Forest500’s annual report.

“These findings clearly show how US banks benefit while the Totobiegosode are forced to deal with the consequences,” points out Global Witness’s US Senior Policy Advisor, Ashley Thomson.

“The destruction is embedded in the routine operations across the finance sector, and the only way to weed it out is through strong regulations."

British bank HSBC was the third largest financier to these companies between 2021-2023, providing $209 million in credit to Minerva Foods, according to Global Witness’s analysis.

HSBC is among the four banks in this analysis who have set an overarching deforestation policy, which includes a commitment to not provide services to customers either directly or indirectly involved in deforestation.

The policy applies specifically to "high-risk" cattle processors with a slaughter-house capacity of 500 cattle per day or more, like Minerva Foods and Frigorífico Concepción.

Forest500 ranks HSBC 11th globally among financial institutions for its approach to deforestation, which is based primarily on their public policies.

However, as Emma Thomson, who leads the Forest500 project, recently told Global Witness, even where banks have set policies on deforestation, they often contain “significant gaps.”

For example, among the banks Forest500 assesses, evidence of adequate implementation “is often non-existent, while awareness of the human rights abuses that are intrinsically linked to deforestation and ecosystem conversion is staggeringly low,” Thomson said.

According to Forest 500’s report, one of the “key ways” that financial institutions can implement their policies in line with best practice is to require that clients set an “organisation-wide cut-off date” for eliminating deforestation from their supply chains.

However, none of the banks assessed by Global Witness have such a policy in place.

In addition, neither Minerva Foods nor Frigorífico Concepción has a comprehensive “zero deforestation” policy applicable for their Paraguayan operations – although Minerva Foods has committed to ending "illegal" deforestation from its direct and indirect supply chains by 2030.

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