UK urgently needs new law to stop financial sector bankrolling deforestation and rights abuses, say MPs

4th January 2024, London – The UK government must urgently introduce a new law to prevent the country’s financial sector from funding deforestation and human rights abuses overseas, according to a new report by the Environmental Audit Committee (EAC).

Published today, the report by the group of cross-party MPs draws on expert evidence testimony given by Global Witness, which urged the UK government to implement legislation that would stop deforesting companies accessing UK funds.

Global Witness found that UK banks and asset managers provided $16.6 billion to 20 of the world’s worst deforesting companies between 2015 and 2020 alone. The Treasury has been ordered to carry out a review into the effectiveness of existing regulations to prevent the financing of deforestation.

The new EAC report comes just weeks after the UK government announced the five commodities that cannot be imported to the UK if they were grown on illegally deforested land, though ministers are yet to lay the law itself, a step required to bring the ban into force. Global Witness is backing the EAC’s call for the government to urgently extend this law so that companies and financial actors are required to carry out checks to prevent all human rights abuses and deforestation - regardless of legality in the producer country.

Alexandria Reid, Senior Global Policy Adviser at Global Witness, who gave evidence to the inquiry, said: “The findings are clear: the UK will not reach net zero while British banks continue to fuel – and profit from – rampant deforestation of our climate-critical forests overseas. The government will miss the global deadline to halt and reverse deforestation by 2030 unless it acts now.”

Global Witness found that at least 177 land and environmental defenders were killed for protecting our planet in 2022 – equivalent to one person murdered every other day - bringing the total number of killings to 1,910 since 2012.

Reid added: “By failing to regulate financiers, the government is turning a blind eye to the role that UK banks play in fuelling violence against those who help keep the world’s forests standing. We cannot protect forests unless we put human rights at the core of a new regime.”

Commenting on the report, Alex Sobel MP, Co-Chair of the All-Party Parliamentary Group on Global Deforestation, said: “This is yet another call for the government to introduce a new law that stops UK money flowing to the worst deforesting companies worldwide. Responsible supermarkets and financial institutions want an even playing field that helps everyone play their part in stopping deforestation.

“After two years of delay, the UK government must wake up and treat this issue with the urgency it requires to prevent goods produced on illegal deforested land reaching our shelves. The EU has leapfrogged us by covering all human rights and blocking all goods grown on illegally deforested land. Now we must do the same.”