Woodlands in nearly every forested country face threats from climate-change-driven fires and deforestation pressures fueled by economic interests exploiting natural resources. Credit: Imran Schah/IPS
By Stephanie Dowlen
MALMO, Sweden, Oct 16 2026 (IPS)
On Monday, governments from across the world will gather in Armenia for COP17, the UN biodiversity summit, to assess progress on the global agreement to halt and reverse biodiversity loss. For anyone who cares about the livability of our planet for future generations, and the richness of life on earth, the stakes could hardly be higher. Policy makers will debate targets, implementation, and the lack of money to protect nature, in particular the failure of developed countries to fulfil their obligations. But there is a more basic question that should put at the center of those discussions: what happens when the financial system governments are counting on to fund nature protection is also financing its destruction?
A new analysis by the Forests & Finance coalition provides an alarming answer. Since 2020, banks have provided $595 billion to companies operating in high-risk agribusiness and metal and mineral mining sectors across tropical forest regions. Of that, $351 billion went to agro-commodities and $244 billion to mining. These are among the primary industries driving deforestation, land degradation, pollution and conflicts with communities across the tropical forest regions of South America, Southeast Asia and Central and West Africa.
The significance of that figure goes beyond the amount of money involved. It exposes a fundamental weakness in the way the biodiversity crisis is being addressed. Governments have committed under the Kunming-Montreal Global Biodiversity Framework to aligning financial flows with biodiversity goals, yet financial institutions remain largely free to finance nature destruction as a risk to themselves rather than as harm they may in fact be helping to cause.
Nature-related risks are not like ordinary financial risks. A bank might assess how drought could affect a company’s revenues without adequately considering whether the company itself helped create that vulnerability by clearing forests, draining wetlands or degrading watersheds. By the time those consequences appear on a balance sheet, an ecosystem may already have crossed a threshold from which recovery is extremely difficult. The report finds that current financial risk frameworks and sustainability policies remain woefully ill-equipped to assess these real-world impacts.
The consequences are already visible in some of the world’s most important forest landscapes. In Brazil, banks have provided $83 billion to the soy sector since 2020, including $6.8 billion this year alone, despite the collapse in January of the Amazon Soy Moratorium, which had been credited with reducing soy-driven deforestation by 69 percent in monitored areas. The withdrawal of major exporters from the agreement removed a critical safeguard and traceability system keeping forests standing, yet banks have not publicly taken a position on its collapse.
Indonesia presents a similarly disturbing pattern. Banks have provided $67.1 billion to the country’s notoriously destructive pulp and palm oil sectors since 2020, including financing for companies associated with repeated breaches of their own commitments to avoid deforestation, peatland development and exploitation. Peat drainage and deforestation leave landscapes less able to retain water and resist fire, increasing the vulnerability of communities to climate extremes.
At the same time, the financial flows behind mining are growing rapidly. Governments and companies are scrambling to secure copper, lithium, nickel, cobalt and other minerals needed for energy technologies, while demand is also being driven by geopolitical competition and the expansion of artificial intelligence infrastructure. Financing for mining in tropical forest-rich countries increased 55 percent between 2016 and 2025, with lithium financing increasing more than elevenfold and nickel financing by 183 percent.
There is a danger in treating every new mine as part of a clean transition simply because its minerals may eventually be used in low-carbon technologies. Mining in tropical forest regions is associated with ecosystem destruction, pollution, land conflicts, violence and violations of Indigenous Peoples’ rights. A transition that sacrifices some of the world’s most biodiverse landscapes and the people who depend on them is not sustainable, whatever the end product.
What makes this particularly troubling is how little protection many banks actually require before providing this financing. The average score in the report’s assessment of bank policies covering forest-risk agro-commodities is only 25 percent, while 39 percent of banks assessed scored below 20 percent. JPMorgan Chase, one of the world’s largest and most influential banks, scored just 18 percent.
Voluntary commitments have done little to close this gap. Governments now need to establish binding rules requiring financial institutions to conduct meaningful environmental and human rights due diligence across corporate groups and supply chains, disclose where their money is going and what impacts that financing is associated with, and face consequences when they finance severe and unresolved harms.
Financial regulators also need to recognize biodiversity loss as more than a distant environmental concern. Tropical forests underpin food systems, water supplies and economic activity, while their degradation can create cascading risks across economies. Yet there is still no equivalent to the regulatory framework used for financial institutions considered systemically important, even as the degradation of these natural systems threatens consequences that extend far beyond individual companies or projects.
But banks should not wait for governments to act. They can establish clear red lines against deforestation, ecosystem conversion and serious human rights abuses, make those requirements enforceable in financing agreements, independently verify compliance and suspend or terminate financing when clients fail to address serious violations. Those safeguards must respect Indigenous Peoples’ rights, including Free, Prior and Informed Consent, and provide affected communities with meaningful access to remedy.
The choice facing governments at COP17 is therefore not simply how much money to mobilize for biodiversity. It is whether they are prepared to stop the financial system from undermining those investments in the first place.
The evidence is increasingly difficult to dismiss. Hundreds of billions of dollars are flowing into industries that are rapidly degrading the natural systems on which economies, and the web of life, depend. Governments have already promised to align financial flows with biodiversity goals. Now they need to make that commitment real.
At COP17, following the money would be a good place to start.
IPS UN Bureau
