A coalition of 112 civil society organizations from 38 countries has sent a letter to the banking sector, calling on banks to take decisive action to halt and reverse nature loss and biodiversity collapse. The joint letter, addressed to the CEOs of over 100 major global banks, highlights the urgent need for the financial sector to align with the goals and targets of the  Kunming-Montreal Global Biodiversity Framework (GBF) and take concrete steps to mitigate the environmental, social and climate impacts of their financed activities.

Letter:

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Today, the continued expansion of agribusiness, logging and other industries which significantly rely on and impact on the natural environment are one of the major threats to the world’s remaining forests and local communities. Despite the serious social and environmental damage caused by the expansion of these industries, they continue to receive private financing, allowing them to expand and continue wreaking havoc on local ecosystems. The recent United Nations Environment Programme (UNEP)  report reveals that financial flows from commercial banks towards environmentally damaging activities far outstrip those directed towards conservation efforts by a factor of 140. The ”Banking on Biodiversity Collapse” (BOBC) report published last year by the Forest and Finance Coalition found that, from January 2016 to September 2023, banks provided at least US$ 307 billion in credit to business sectors with a high-impact on tropical ecosystems such as beef, palm oil, pulp and paper, rubber, soy, and timber. Furthermore, many of these banks have inadequate internal policies to ensure that operations within these high-impact and risky sectors adhere to environmental best practices.

The upcoming Convention on Biological Diversity COP16 in Cali, Colombia, serves as a critical moment to prioritize nature. To address the biodiversity crisis effectively, banks must align with the Global Biodiversity Framework (GBF) and the Paris Agreement. With just six years to “halt and reverse biodiversity loss” the 112 signatories urge major global banks to promptly develop and publish a transition plan that supports these critical goals.

In the letter the organizations demand that banks meet the crisis with resolute action, reflecting the urgency and scale of the situation.

Most importantly, banks must publicly support financial sector regulation, which will establish a level playing field with mandatory rules on social and environmental impacts, ensuring transparency and accountability. Such regulation is essential for protecting ecosystems but also reduces uncertainty, prevents market failures, and ensures fair competition.

In addition, banks must take up responsibility to align their own business with the goals and targets of the GBF. Concretely, banks must:

1. Publicly acknowledge, if not already, the scale and depth of the biodiversity crisis and the distinct responsibility of banks to stop the money flow to activities that destroy biodiversity.

2. Explicitly and publicly commit, if not already, to aligning all business activities with the 2030 goals and targets of the GBF.

3. Publish transition plans aimed at progressively reducing the negative impacts of finance on biodiversity and ecosystems and increasing positive impacts, including robust, time-bound goals and targets for aligning all policies and financing activities with the GBF targets.

4. Strengthen exclusions by phasing out finance, and excluding future finance for activities in the eight no-go areas identified by the Banks and Biodiversity Initiative.

5. Exclude finance for high-risk business sectors that have no potential or credible transition pathway towards alignment with the GBF goals.

6. Break ties with rogue client companies that fail to end and provide remedy for environmental and human rights abuses.

7. Acknowledge the role of Indigenous Peoples as primary custodians of their biodiverse lands and territories and establish or strengthen policies and procedures that respect and uphold Indigenous rights, including their right to free, prior, and informed consent (FPIC).

8. Maintain zero tolerance towards violence and the criminalisation of land, environmental, and human rights defenders in connection to their own operations or their business relationships.

9. Comprehensively monitor, assess, and disclose biodiversity risks, impacts, and dependencies, along with policy planning and target setting to reduce those impacts and dependencies, with clear goals and timelines; report on performance against those targets and on any actions taken towards clients negatively impacting nature.

10. Install robust accountability frameworks and develop or participate in grievance mechanisms to provide remedy for adverse environmental and human rights impacts, aligned with United Nations Guiding Principles (UNGP) effectiveness criteria.

11. Reject false solutions to the biodiversity crisis, including market mechanisms based on the financialisation of nature, land, and land grabbing, ecosystem services, biodiversity markets, and corporate-led initiatives like the Taskforce on Nature-Related Financial Disclosures (TNFD).

Ola Janus, The Banks and Nature Campaign Lead at BankTrack speaking on behalf of the coalition, stated: "This call to action from 112 civil society organizations on five continents highlights the role emphasizes the urgent need for commercial banks to align their investment policies with the health of our planet. The coalition eagerly awaits the banks' responses and remains dedicated to advocating that finance works towards preserving life on Earth, not against it."

Banks are urged to outline concrete actions, including policy steps, targets, and timelines, to address the biodiversity crisis. The coalition requests that this plan be made publicly available on the banks' websites by October 21, 2024. The letter also calls for a direct response to the coalition's concerns and recommendations by October 1, 2024, and expresses a willingness to engage directly with bank representatives to discuss policies, due diligence procedures, and transition plans in more detail.

Signatories of the letter:
 

Further supported by: