Report Accuses Companies of Aiding Amazon Destruction

US group's report comes as Bolsonaro's environmental policies face scrutiny in Brazil

Scores of European and American companies, including some of the world's biggest banks and investment groups, have been accused of aiding the environmental destruction of the Amazon as the threat from global warming grows increasingly urgent.

From asset manager BlackRock to agribusiness giant Bunge, researchers have cited a host of the world's most powerful companies for either allegedly financing or buying from groups that have been implicated in the destruction and deforestation of the Amazon rainforest.

The findings released Thursday from US environmental group Amazon Watch come amid an escalating public outcry about climate change as deteriorating weather patterns imperil communities worldwide.

There is also growing friction in Brazil, where the country's new president, Jair Bolsonaro, has pledged to open up areas of the Amazon region to commercial activity. On Wednesday, thousands of Indigenous people gathered in Brasília to protest against deforestation, which they say threatens their native territories.

As the world's largest rainforest, the Amazon region alone provides the world with 20 per cent of its required oxygen and plays a crucial role in stabilising global temperatures.

It has, however, long been coveted by the agribusiness industry, which has been clearing vast tracts of the 5.5m square kilometre rainforest, as well as the ecologically sensitive but less regulated 2m square kilometre savannah region known as the cerrado, environmentalists say.

Much of the process is aimed at making space for soyabean farming, cattle ranching and even mining to meet demand from an increasingly wealthy China.

After falling dramatically following political outcry in the early 2000s, deforestation in the Amazon has grown steadily over the past 10 years. In the Xingu river basin alone, an area home to several Indigenous tribes, 8,500 hectares of rainforest were cut down in the first two months of 2019, a 55 per cent increase from last year, according to the Instituto Socioambiental, a research group.

"Foreign investors have enormous influence over what happens in the Brazilian Amazon. In particular, big banks and large investment companies play a critical role, providing billions of dollars in lending, underwriting and equity investment to soy and cattle companies," said the authors of the Amazon Watch report.

"This capital and financial security enables agribusiness to maintain and expand operations, causing further devastation to the Amazon."

In particular, the authors pinpointed asset managers, such as BlackRock, saying they say "wield significant power over how assets are allocated and how shareholder votes are determined."

BlackRock said "it makes investments on behalf of our clients, whose investment decisions we have a fiduciary duty to carry out.

"We do not own the assets our clients invest in. Our clients choose to invest in a wide range of assets and we endeavour to offer them a wide range of investment options, including sustainable investments."

Moira Birss, one of the authors of the report, pointed to a disconnect between "between rhetoric and actions".

"In several cases, some of these banks and financial institutions have policies that support the Paris climate agreement or their CEOs have talked about the need to operate with a social purpose. Yet when push comes to shove they're continuing to engage to the tune of millions with these [offending] companies."

Last year, Larry Fink, the BlackRock chairman and chief executive, said he intended for the company to become a global leader in "sustainable investing".

The report also named traders Bunge and Cargill, which were last year among five companies found to have purchased 3,000 tons of grain from farms that had been embargoed by Brazilian authorities for destroying native vegetation.

IBAMA, Brazil's environmental watchdog, said it had fined the companies almost $30m.

Cargill said it was an advocate of protecting native vegetation and had "gone beyond the legal obligations in the region to promote a deforestation-free supply chain."

The Minnesota-based company added that the IBAMA allegations were "without merit as Cargill does not have any commercial relationship with the properties in question."

Bunge also said it disputed the claims by IBAMA that it had bought grain produced in off-limit agricultural areas and was formally contesting the findings.

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