A new report by Global Canopy has revealed that 150 of the world’s largest financial institutions collectively financed nearly $9 trillion in 2024 to companies that pose a significant deforestation risk. Of that amount, a staggering $864 billion went to firms without any public commitment to stop deforestation.

This year’s Forest 500 report paints a sobering picture of how the financial sector continues to underwrite forest destruction, despite mounting climate and nature-related risks. The findings suggest that many financial giants are still failing to adopt even basic safeguards to address the environmental impact of their investments.

Vanguard, BlackRock, and JPMorgan at the Forefront

Among the biggest players identified in the report are Vanguard, BlackRock, and JPMorgan Chase. Together, these three institutions were responsible for more than $1.6 trillion in financing to companies with operations linked to tropical deforestation. According to the analysis, neither Vanguard nor BlackRock currently has a public deforestation policy in place. JPMorgan Chase, while appearing to have made some progress, limits its no-deforestation criteria to palm oil alone.

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This selective and partial approach to forest-risk sectors means vast swathes of financing remain tied to industries with weak or non-existent sustainability practices. The absence of comprehensive deforestation policies is particularly alarming given the scale of financing involved.

Few Institutions Are Taking Meaningful Action

Despite increased awareness about the role of deforestation in biodiversity loss and climate change, only 60 of the 150 financial institutions surveyed had any form of deforestation policy. Of those, just 27 actively screen their portfolios for compliance with deforestation-free standards. Meanwhile, only 32 have formal engagement processes to address non-compliant companies, and a mere 17 go so far as to threaten divestment.

Among all surveyed, only BBVA, Deutsche Bank, and Lloyds Banking Group were found to screen all high-risk commodities identified in the report, including palm oil, soy, beef, and timber. These banks represent the rare exceptions in a sector that, according to Global Canopy, still views deforestation as a fringe issue rather than a central financial risk.

A Major Driver of Climate Change

The continued flow of capital into the deforestation economy carries immense consequences. Forest loss is responsible for approximately 11 percent of global greenhouse gas emissions. At the same time, ecosystems that are destroyed for agriculture or extraction often play crucial roles in absorbing carbon and regulating weather patterns.

In its warning, Global Canopy emphasized that financing companies without addressing deforestation risk undermines any progress made through transition finance. Even where institutions support green investments or sustainable infrastructure, the simultaneous backing of high-risk deforesters can cancel out climate benefits.

Regulatory Pressure Is Mounting, But Awareness Lags

With the upcoming implementation of the European Union’s Deforestation Regulation, there is increasing pressure on companies and financial institutions to demonstrate supply chain transparency. However, only 37 percent of financial institutions acknowledged deforestation as a material business risk in 2024, a figure virtually unchanged from the previous year.

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This lack of progress is especially concerning in light of the World Economic Forum’s 2025 Global Risks Report, which ranked nature loss among the top four risks facing the world over the next decade. According to Global Canopy, deforestation is not only one of the most solvable environmental crises but also a gateway issue for broader biodiversity and ecosystem risk.

A Call for Transparent Stewardship and Accountability

The report concludes with a strong call to action for financial institutions to integrate deforestation into their risk management frameworks. This means going beyond high-level policy statements to implement effective screening, engagement, and, if necessary, divestment strategies.

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