Banks must use their power to halt a biodiversity crisis caused by mass deforestation in the production of commodities such as soy, beef and timber, experts at the University of Cambridge have said.
A new report from the Cambridge Institute for Sustainability Leadership (CISL) sets out five ways in which lenders can boost financial incentives for agriculture that reverses deforestation and restores natural habitats.
The researchers say banks should align anti-deforestation policies to a new standard of best practice, set measurable targets towards reversing the clearing of trees while ensuring that senior executives regularly review progress against these targets.
The group is also calling on financial firms to advocate for policies that make deforestation commercially unattractive or illegal.
It encourages larger banks to partner with smaller local lenders to halt deforestation all along the supply chains for commodities that can be found in a huge range of goods on retailers’ shelves.
Scientists have warned that a collapse in biodiversity and the encroachment of humans into animal habitats risks causing more pandemics like Covid-19
Nick Villiers, director, of the CISL said: “More collaboration is needed between local and global banks and their clients if we are to halt and reverse deforestation.
“Our action plan maps out the unique part banks can play in tackling deforestation and aims to catalyse further action by the banking industry and beyond. By acting together, banks can help rewire the economy, mobilising and structuring finance so that it supports deforestation-free and forest restorative soft commodity production.”
Simon Connell, head of sustainability strategy at Standard Chartered bank said: “By sharing both the successes and lessons from the ‘Soft Commodities’ Compact, CISL shows what role the banking industry as a whole could play, working with business and government, to tackle the ongoing challenge of deforestation.
“As protecting and restoring nature rightfully moves up the agenda, the CISL Action Plan provides the wider banking industry, including local banks, with a way to engage with tangible methods for collective action on deforestation.”
