Environmental advocacy groups Stand Earth and Amazon Watch are calling on major banks to stop providing letters of credit (L/Cs) to finance traders dealing in oil from the vulnerable Amazon rainforest.

In a new scorecard and report released by the environmental groups, they suggest that despite sustainability commitments and risk management screening processes, banks remain highly exposed to the risk of funding corruption, human rights violations and environmental harm due to their ongoing relationships with companies and traders operating in the region.

Demands on banks

The advocacy groups are calling for a commitment from banks to exit all L/Cs, loans, and revolving credit facilities for all oil traders, and especially those implicated in corruption controversies active in the Amazon as soon as possible, or at the latest by the end of 2024.

They also want to see banks commit to ending all existing oil and gas financing and investment in the region as soon as possible, or at the latest by the end of 2025.

Banks should also commit immediately to no new oil and gas financing and investment in the Amazon by the end of 2021.

Banks at risk.

Natixis, Citigroup, JP Morgan Chase, Goldman Sachs, Deutsche Bank and HSBC are considered banks at a very high risk of funding corruption, human rights violations and environmental harm according to the scorecard published by the groups. It puts BNP Paribas, Credit Suisse, UBS, Société Générale and Crédit Agricole at high risk.

Credit Suisse and UBS last year defended their roles in the financing of oil pipelines that sustained damage that caused millions of litres of oil to spill into the Amazon river and triggered calls for banks to stop financing traders in oil from the region (DC World News, 7 December 2020).

Rabobank, ABN Amro, and ING are considered at moderate risk of funding corruption, human rights violations and environmental harm according to the scorecard.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.