For now, Chinese banks around the world are seen as the largest financiers to help combat the negative effects of climate change. However, a recent report seems to undermine these efforts.
More precisely, data gathered and analyzed by the global coalition of non-governmental organization Forests & Finance found that Chinese finance institutions provided around $15 billion in loans to companies that were linked to deforestation in certain parts of Africa, Brazil, and Southeast Asia. Furthermore, overseas-operating Chinese companies that are involved in trading with related commodities (like paper, soy, rubber, timber) are also often funded by banks in China.
These actions and trends seem to oppose the fact that last year, President Xi Jinping pledged that his country would reach “carbon neutrality” in roughly 40 years. Especially when considering that the state-operated Industrial and Commercial Bank of China was the largest lender with a total funding value of $2.2 billion.
On the other end, Sinochem, which is a Chinese state-owned chemicals group, had the best money stats, having collected $4.6 billion in loans, ultimately making the company the largest recipient.
According to the Forests & Finance’s database, these transactions accounted for about two-fifths of global deforestation, and this deforestation alone contributed around 5% of annual greenhouse gas emissions.
Tom Picken, head of the organization, stated that big economies usually talk big when it comes to combating climate change; however, when looking a bit deeper, it’s easy to tell that they often turn a blind eye to what’s really going on.
Pickens also mentioned, as the country and Chinese banks also gain momentum globally, propelling China’s economic growth stats on the way, it’s even more important to press them to adopt stricter safeguards to deter them from funding deforestation in any form.