Deforestation-free supply chains and the financial sector

Deforestation-free supply chains and the financial sector

Photo: View into the blue sky on a sunny day. the facades of office buildings and trees forming a triangular frame

Project period: January 2026 - December 2028

We are committed to ensuring that the financial sector is more effectively involved in achieving deforestation-free supply chains. To this end, we work with and for the financial sector to develop clear recommendations for action and policy recommendations.

Every year, 10.2 million hectares of forest are lost worldwide. Around 90 % of deforestation in the tropics is linked to the expansion of agricultural production. Many of these products are imported into the EU and Germany. Behind this are also financial institutions that finance companies through loans or investments and thus indirectly contribute to deforestation. Nevertheless, many institutions have so far paid too little attention to this risk: according to the Forest 500 report, only 40% of the 150 financial institutions surveyed will address deforestation in their guidelines in 2024, even though they invest over USD 8.9 trillion in relevant companies.

Our project supports financial institutions in integrating deforestation-free supply chains more strongly into ESG, biodiversity and risk management and in directing financial flows to companies that do not contribute to deforestation.

Project area

Goals

Analysis and improvement of relevant EU regulations, such as the EUDR or the EU taxonomy with regard to the financial sector

Raise awareness and enable the financial sector to recognize deforestation-free supply chains as a major risk for biodiversity loss and integrate them into their biodiversity management