Johan Frijns, Campaign Lead Banks and Pandemics
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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 associated directly or indirectly with the COVID-19 pandemic, estimated at 15 million, billions of people have had 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 lockdowns and travel bans.
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, we could be on the brink of entering ‘an era of pandemics’, with raging pandemics 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 spillovers: climate change leading to forest fires and other habitat loss; willful 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.
Role of banks
Banks may not be the most obvious starting point for preventing future pandemics. Yet, while they cannot directly stop a deadly virus or other pathogen from jumping from animals to humans, they can help reduce the risk of this occurring, by not financing business activities and sectors that, because of their nature or their location, increase such risk, and by raising ‘pandemic risk awareness’ amongst their clients.
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 cause further deforestation of tropical rainforests.
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. 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 expansion of the global meat industry is brought to a rapid halt, including bank finance for this industry.
Finally, the accelerating climate crisis is 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 more sickly planet is therefore one more pressing reason for banks to 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;
- 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, the industrial-scale expansion of global 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;
- 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.
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). Going forward, we will engage with banks on our findings, seeking acknowledgement of their responsibility and the development of pandemic risk assessments and due diligence procedures.
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 global heating, which exacerbates the risk of future pandemics. It aims to stop all bank finance for the expansion of the fossil fuel industry and ensure remaining finance is phased out on a timescale aligned with the 1.5°C target of the Paris Agreement.