February 19, 2021

French bank sets 2025 deadline for agribusiness to end deforestation, implement fully traceable supply chains

French bank BNP Paribas has set 2025 as the deadline for its clients in Brazil to achieve zero deforestation and full traceability in their production and supply chains.

The bank announced a new policy on February 15 intended to help tackle the role of soy and beef production that have contributed to deforestation in Brazil, including a commitment to immediately drop companies that continue clearing forest or converting land in the Amazon.

In order to access BNP Paribas' financial services, any agribusiness producing or buying beef or soybeans in Brazil's Amazon or Cerrado biomes will have to meet the conditions set by the bank. The policy states that BNP Paribas will only provide financial products or services to companies, producers, meat conditioners and traders committed to end deforestation and implement full traceability in their production and supply chains by 2025 at the latest.

BNP Paribas added it would not finance customers producing or buying beef or soybeans from land cleared or converted in the Amazon after 2008. This also means that the bank would encourage clients to avoid producing or buying beef or soybeans from cleared or converted land in the Cerrado after January 1, 2020.

Antoine Sire, BNP Paribas' head of corporate engagement, said: "The policy reflects a growing understanding of the challenges associated with biodiversity not only within the financial community but also among many corporate clients."

Campaigners welcomed BNP's acknowledgement of the role its agribusiness clients have in fueling deforestation.

"BNP Paribas' announcement sends a strong signal to soy traders: big global banks are starting to realise the risks associated with soy driven deforestation and are taking concrete actions to exclude bad players," said Nico Muzi, Europe director at Mighty Earth.

However, they also raised concerns that the measures targeting the Cerrado placed no immediate requirements on producers and traders to improve their practices.

"BNP Paribas has understood the importance of imposing a cut-off date on soy traders, but no immediate demand is made to guarantee improved practices over the next few years," said Klervi Le Guenic, a campaigner at French non-profit Canopée Forêts Vivantes. "As it stands, BNP Paribas is giving traders five more years to clear forests with impunity."

Lucie Pinson, director of Reclaim Finance, added: "If BNP Paribas wants to give real guarantees of its commitment to act in the face of the climate emergency and biodiversity loss, it must secure this commitment on the part of traders and then support them on a deadline of two years, not five years.

 - Business Green