Raising the bar: A baseline review of finance sector action on deforestation

Global Canopy’s Deforestation Action Tracker monitors financial institutions with significant climate commitments including those in Race to Zero and Glasgow Financial Alliance for Net Zero (GFANZ), to track their action on deforestation and associated human rights abuses.

Financial institutions can only achieve their net-zero climate commitments with rapid action on deforestation. Following COP26 there has been encouraging momentum and recognition of the need for financial institutions to use their leverage to eliminate deforestation from their portfolios as part of their climate action, including the statement from GFANZ chairs and vice-chairs.

Global Canopy has conducted a baseline review of action on deforestation of 557 financial institutions that have made significant climate commitments, including the financial institutions in Race to Zero and GFANZ.

Do the financial institutions recognise the importance of deforestation?

20%

have set a single commodity-specific deforestation policy.

Summary

• The baseline is low: very few financial institutions are already acting on deforestation, conversion and associated human rights abuses. A fifth (20%) have set a single commodity-specific deforestation policy. For the four key associated human rights abuses, just one has policies in place for all four commodities.
• A major shift in approach and leadership is required across the financial sector if commodity-driven deforestation is to be eliminated by 2025 in line with commitments made at COP26. The tools are available and some financial institutions are showing what is possible.
• From 2023 to 2025, Global Canopy will be carrying out a full assessment and ranking of progress of these financial institutions, assessing against the best practice for financial institutions exposed to deforestation risk.

Percentage of financial institutions with a deforestation policy for the four highest forest-risk commodities

Recommendations

The report, Raising the bar, also includes recommendations for financial institutions to achieve global and organisational climate commitments; and recommendations for the Race to Zero and GFANZ initiatives to encourage their members to achieve their net-zero climate commitments.

Download the full report now to learn more about the baseline review of the 557 financial institutions.

Download the report now

Download the data

Only information which has been made publicly available on the financial institutions’ websites during the review period were considered for the Deforestation Action Tracker baseline review. In 2022 this period ran from 1 August to 30 September 2022.

Details on how the institutions were assessed, including the full list those included in the baseline review, is available in the methodology.

All of the data collected as part of this baseline review is publicly available to download.

Download the data now

“In our view, transition plans that lack objectives and clear targets to eliminate and reverse deforestation are incomplete.”

Statement on Deforestation Financing from the Co-Chairs and Vice Chair of GFANZ