Major financiers including Santander, BNP Paribas and BlackRock have helped bankroll the “world's worst deforestation crisis” in Paraguay

Some of the world’s biggest financiers have been bankrolling meatpacking giants linked to deforestation in Paraguay’s richly forested Gran Chaco region - with some increasing their shareholding tenfold in the last two years - according to a new investigation by Global Witness. This is despite warnings first made public in a report by the NGO Earthsight in 2020, who labelled rampant forest destruction in Paraguay “the world’s worst deforestation crisis”.

Published today, Global Witness’ report builds on Earthsight’s devastating exposé, which accused meat-packing giants – Minerva and Frigorifico Concepción - of buying cattle raised by two ranchers responsible for land grabbing and forest clearance within the ancestral lands of Indigenous peoples in the Chaco.

Three years on from the explosive findings, Global Witness found evidence that Minerva continued sourcing products from at least one of the deforestation-linked ranchers in 2021 - though Minerva denied this.

Despite the companies’ links to known deforesters in the Chaco, as well as the evidence from the Earthsight investigation being in the public domain, many leading financiers continue to invest in Minerva.

Global Witness’ investigation found that [2]:

In the EU: (between December 2020 and December 2022)

• Netherlands: APG, the Netherland’s largest pension manager, almost doubled its investment in Minerva, increasing its shareholdings in the company from $7million to $13.7million
• France:  BNP Paribas substantially increased its investments, from $740,000 to $1million
• Spain: the largest growth in shareholdings came from Spanish bank Santander, whose investment shot up a staggering 1,000%, from $70,000 to $770,000

In the US: As of December 2022, two US-based major asset managers, Vanguard, and BlackRock, still held significant shares in Minerva, totalling $13.3 million. This represents a substantial increase since illegal deforestation was first identified in Minerva’s Paraguayan supply chain in 2019.

Between September 2019 and December 2022

• BlackRock’s investment shot up more than five-fold; from $840,000 to $4.78million
• Vanguard’s investment almost doubled, from $4.54million to $8.56million

In the UK: HSBC was one of several banks that underwrote a $1.4 billion bond sale for Minerva in March 2021 – earning itself almost half a million dollars in the process.

Charlie Hammans, Civil Society Adviser at Global Witness, said: “Our investigation shows that many UK, European and American banks are failing to ensure their portfolios are deforestation-free and free of any associated human rights violations. Either these banks are failing to carry out effective due diligence or they are willing to side-line environmental and human rights concerns in favour of business as usual.”

“Indigenous Peoples are on the front line of climate change. They pay the price when commodities are produced illegally on their lands. It’s time that governments ensure that major financial players turn off the money pipeline to companies sourcing commodities from deforested land and Indigenous areas.”

All the financial institutions exposed – with the sole exception of Vanguard - are signatories of either the Net Zero Asset Manager Initiative or the Net Zero Banking Alliance. BNP Paribas and Santander are members of both. Both initiatives commit the banks or asset managers to reach net zero emissions by 2050, with all members advised to set a target to eliminate deforestation from their portfolios. 

Other banks including HSBC, JP Morgan and Santander have collectively earnt over a million dollars underwriting bonds and assisting share sales for Minerva. Other financial institutions have underwritten Frigorifico Concepción’s bond sales, including Bank of America, which underwrote a $285 million deal for the company in 2021.

Rubens Carvalho, Head of Deforestation Research at Earthsight, said: “The level of carbon emissions from Chaco deforestation over the last few decades puts its climate change contribution on a par with higher profile deforestation frontiers in the Amazon and South-East Asia. Research has revealed the biome stores up to 19 times more carbon than previously thought. It is vital that urgent action is taken now to conserve this often overlooked but critical biome. The Paraguayan government itself has been complicit by failing to fulfil its obligations to protect indigenous land which is so important for our planet’s future.”

According to Global Forest Watch, Paraguay lost a quarter of its net forest cover between 2000 and 2020. The country now has one of the highest rates of deforestation in the world. Paraguay has lost an estimated 5.2 million hectares between 2001-2021, an area almost twice the size of Belgium - putting the future of the forest and the people who depend on it at risk.

Ana Romero, a representative of the Indigenous Youth Union of Paraguay, said: “Meatpackers are causing environmental issues, and significant social issues as well. Theirs is a capitalist system - which focuses on excessive consumption. We have to defend the rights of those that really defend our ecosystems – Indigenous peoples. These ranchers and meatpackers are destroying an ecosystem that they depend on too.”

The new investigation builds upon Global Witness’ Deforestation Dividends 2021 report – launched in the run up to COP26 – which showed that banks and asset managers based in the UK, US, EU and China made deals worth around $157 billion with just 20 agri-businesses implicated in deforestation between 2016 and 2020.

It comes as legislation in the European Union and the United Kingdom is set to ban the trading of certain commodities produced on deforested land and amid growing support for similar measures in the US.

However, these rules still currently allow UK and EU financiers to fund the production of forest-wrecking commodities. There are therefore growing calls to ensure that the new deforestation rules include obligations for banks and financiers, with MEPs in Europe and key British legislators backing such proposals. There are also efforts to table similar legislation in the US.

Giulia Bondi, Senior EU Forests Campaigner at Global Witness, said: "Talk is cheap, and voluntary commitments from banks to stop funding deforestation are no exception. Time and time again, these voluntary initiatives have proven futile.  Previous evidence uncovered by Global Witness revealed that, between 2016-2020, EU-based financial institutions were complicit in financing €30.6 billion in deals with 20 agribusiness companies accused of deforestation.

"The urgency of the situation cannot be understated: the European Commission must swiftly fulfil its commitments agreed in the new anti-deforestation law and propose rules to stop the EU-based financial institutions bankrolling forests destruction. 

"The European Commission must also push ahead with its obligation to extend the new law to other wooded lands, which are vital carbon sinks but increasingly under pressure from large-scale agriculture activities."

This page was updated on 03/05/2023 to correct an error in the original text. The page stated that Minerva Foods and BlackRock did not respond to our request for comment. This was incorrect.