Banks and Pandemics
Johan Frijns, Campaign Lead Banks and Pandemics
Johan Frijns, Campaign Lead Banks and Pandemics
A global emergency…
The sudden outbreak of COVID-19 in early 2020 awoke the world to how much disruption and suffering a pandemic can bring to people worldwide. Beyond the full death toll, now confirmed at close to 7 million, with many million people more estimated to have died from causes indirectly linked to COVID, billions of people have seen their lives severely disrupted, having to deal with sick relatives, suffering loss of livelihoods and unemployment, facing food shortages, social isolation and loneliness, and being confronted with a severe curtailing of their rights and freedoms due to extensive lockdowns, travel bans and school closures.
While for most people the pandemic came as a sudden shock, scientists had predicted the arrival of such a global catastrophe for a long time. Over the last decades, there has been a rapid increase in the number of zoonotic diseases (those that pass from animals to humans), and the probability of a pandemic with similar impact to COVID-19 is now estimated to be about 2% in any given year, and growing. At worst, the world could be on the brink of entering ‘an era of pandemics’, with raging pandemics disrupting life everywhere being the norm rather than the exception.
…linked to other emergencies
In a world increasingly out of balance, the occurrence of outbreaks, epidemics and pandemics is only expected to worsen, due to a variety of factors that all increase the risk of zoonotic spill overs: climate change leading to forest fires and other habitat loss; wilful habitat destruction and the encroachment of people and human activities (such as mining, poaching and logging) into previously undisturbed nature areas; the massive expansion of global meat production and the associated trade and transport of live animals. All these factors lead to ever-increasing interaction between humans and animals. This, exacerbated by dramatically increased travel and human connectivity, facilitating the rapid spread of diseases once they occur, drastically increases the risk of future pandemics.
It must also not be forgotten that, once pandemics rage, it is the poor, and marginalised communities that are disproportionately affected by its impact, whether globally or in affluent societies. Death toll amongst poor segments of society have consistently been much higher than in more affluent parts, partly because of overall poor health levels amongst the poor, but also limited possibilities to shield themselves from the virus, because of cramped housing in poor neighbourhoods, being forced to earn a living despite lockdowns, working shifts in high risk sectors such as factories with large assembly lines and slaughter houses and so on. Pandemics therefore directly impact on human rights, most importantly the right to good health and life itself.
Role of banks
Banks may not seem the most obvious starting point for trying to prevent future pandemics. Yet, while banks cannot directly stop a deadly virus or other pathogen from jumping from animals to humans, they can certainly help reduce the risk of this occurring, by raising ‘pandemic risk awareness’ amongst their clients, so they operate in a manner that reduces such risk, and especially by not financing any business activities that, because of their nature or geographical location, disturb high risk animal populations in the wild, create breeding grounds for new diseases, or lead to massive further interaction between animals and humans.
The most important way for banks to reduce pandemic risk is to stop financing all business activities that lead to further destruction of, especially, tropical forests. These forests act as huge reservoirs of pathogens: while there are around 250 known zoonotic viruses, it is estimated that a staggering 1.67 million unknown viral species exist in animal reservoirs globally. As tropical forests contain by far the highest level of biodiversity and bio-abundance, this is also where the majority of viral species reside. Banks must therefore cease financing any business clients in sectors such as timber, palm oil, rubber, soy, sugar, pulp & paper, mining, and oil and gas exploration, where these activities lead to further encroachment of, or cause further destruction of remaining tropical forests.
The risk of outbreaks leading to future pandemics is especially acute in cattle farming in tropical areas, where cattle are held in close proximity to wild animals, and in every segment of the meat industry globally. Similar risk occur in other sectors where animals are kept for their fur, harvesting of bile or feathers, or for trade as pets. Each year, billions of animals fall prey to pandemics ravaging through livestock, from swine flu to bird flu to camel flu. Many such ‘animal diseases’ already impact humans and it is only a matter of time before an industrial meat farm somewhere in the world produces a new deadly variety. To reduce such risk, it is crucial that the further expansion of the global meat industry is brought to a halt, including bank finance for expanding this industry, followed by a rapid phase out of industrial meat production in favour of plant based food production systems.
The accelerating climate crisis is also expected to increase the risk of future pandemics. Forest fires and other climate-related habitat destruction will set ever more animals on the move, leading to increased interaction between animals and humans but also between animals that never interacted with one another before, physically bringing together viruses and potential new hosts. The thawing of vast areas of permafrost is also thought to carry an increased risk of unknown pathogens being released, with unpredictable consequences. The prospect of a warming planet also becoming a sicklier planet is therefore one more pressing reason for banks to immediately stop financing the fossil fuel industry.
What banks must do
At the moment, ‘pandemic risk prevention’ is not part of any bank’s vocabulary. For banks to act on pandemic risk they must:
- Publicly acknowledge their specific responsibility as a bank in helping to prevent future pandemics;
- Integrate ‘pandemic risk’ into their overall due diligence procedures for individual transactions, and require from all clients that they operate so as to minimise the risk of triggering and spreading new pandemics.
- Conduct an assessment of their portfolio to identify business activities that carry the greatest risk of triggering pandemics, be it through the nature of the activity, impact on ecosystems, geography etc;
- Based on this assessment, exclude high-impact sectors from finance altogether. This includes sectors leading to deforestation, industrial meat production, business activities that are situated in hitherto untouched natural areas, and the fossil fuel industry fueling the climate crisis;
- Adopt a general no-go policy safeguarding specific categories of ecosystems and Indigenous areas, as proposed by the banks and biodiversity coalition;
What BankTrack does
BankTrack has embarked on this new campaign in early 2022, and a lot remains to be done. So far, we have investigated whether the investment policies of the world’s largest banks and those banks financing sectors with a high impact on tropical forests already contain elements of ‘pandemic risk awareness’ (answer: no). We have also engaged with selected individual banks and bank initiatives, seeking acknowledgement of their responsibility for pandemic risk prevention, and promoting the development of pandemic risk assessments and due diligence procedures, though so far with limited result.
Meanwhile, as part of our nature campaign we are targeting bank finance for projects and companies with a high impact on forests and nature, such as bank finance for the meat industry, for biomass plants and wood chip providers and finance for pulp and paper and palm oil companies. Our climate campaign targets the global heating which exacerbates the risk of future pandemics. It demands from all banks that they immediately end finance for expansion of the fossil fuel industry and ensure that remaining finance is phased out on a timescale aligned with the 1.5°C target of the Paris Agreement.