As the Amazon may face a catastrophic tipping point that is eroding its status as a major carbon sink, a new study charts which banks have pumped the most money into extracting oil and gas from the world’s largest rainforest.
An analysis by Stand.earth, a non-profit organization with offices in Canada and the US, lists JPMorgan Chase & Co. and Citigroup Inc. like the two banks that have dominated the financial support for fossil fuels in the Amazon basin for the past 15 years. In total, JPMorgan and Citigroup were behind $3.8 billion in loans and bonds for oil and gas production and infrastructure, according to Stand.earth.
Since 2009, a total of 160 banks have channeled $20 billion in direct financing to oil and gas in the Amazon, according to the analysis. These activities have contributed to pollution and deforestation that, along with drought and fires, have pushed the Amazon close to passing a “tipping point” that may turn rainforests into grasslands within decades, climate scientists say.
“Banks have a critical role to play in changing the energy economy behind the climate crisis,” said Angeline Robertson, principal researcher at Stand.earth. “We continue to see funding for oil and gas expansion in the world’s largest rainforest.”
A Citigroup spokesman said the bank “continues to strengthen” its environmental and social risk management policy to protect sensitive areas such as the Amazon. JPMorgan declined to comment.
In 2021, scientists discovered that parts of the Amazon had begun to emit more CO2 than they absorb, turning them from a carbon sink to a source. This means that the Amazon may begin to contribute more greenhouse gases to the environment than it removes, exacerbating the climate crisis.
The consequences of global warming are becoming increasingly apparent, as temperatures soar to deadly highs across much of the world, breaking previous records and showing that the planet has already entered a new era of extreme weather. Actions that contribute to increasing emissions will make it harder to avoid a climate catastrophe.
Recognizing what is at stake, some banks have pledged to stop supporting fossil fuels in the Amazon. In May 2022, BNP Paribas SA said it would “no longer finance any oil and gas and related infrastructure projects” in the area.
HSBC Holdings Plc, which has provided $1.3 billion in direct financing to oil and gas in the Amazon over the past decade and a half, said in December it would halt those activities. And other banks have pledged to end commercial financing for some of Amazon’s oil.
These moves send “important signals” that other banks should also “review their relationship with Amazon’s destruction” and take steps to manage this risk, Stand.earth said.
Fany Kuiru, coordinator of indigenous organizations in the Amazon basin, described oil expansion in the area as “a latent threat” to people and ecosystems, adding that it leads to degradation and deforestation and leads to chronic diseases and contamination of food and water sources.
“We urge the biggest bank investors to leave the Amazon immediately,” Kuiru said.
The Stand.earth analysis, which is based on Bloomberg data, also listed Bank of America Corp., Goldman Sachs Group Inc., Banco Santander SA, Itaú Unibanco Holding SA and Banco Bradesco SA as prominent oil and gas financiers in the Amazon over the years.
A spokesman for Santander said the bank is “fully committed to supporting the transition to net zero” and has set emission reduction targets by 2030 in several sectors of its loan portfolio, including oil and gas. An HSBC spokesperson pointed Bloomberg to the bank’s updated energy policy, adding that HSBC “will no longer offer new financial or advisory services for new oil and gas fields, or any O&G fields and related infrastructure in environmentally and socially critical areas such as the Amazon Biome.”
A spokesman for Itaú Unibanco said the bank has been working to reduce deforestation in the Amazon region by monitoring environmental, social and climate risks, and also “defining decarbonisation targets” for carbon-intensive sectors such as oil and gas.
Goldman Sachs and Bank of America declined to comment. Bradesco did not respond to a request for comment.
Brazilian President Luiz Inacio Lula da Silva plans to host a meeting of government leaders next month in the city of Belem to renew the Amazon Cooperation Treaty Organization. The talks are expected to focus on how to better protect the forest and indigenous peoples and attract greener investments.
