Deforestation and human rights: too many companies and financial institutions ignoring the critical link

In our second annual human rights briefing, Forest 500 data reveals that the majority of the 350 companies and 150 financial institutions with the greatest influence on tropical deforestation are failing to take sufficient action to prevent human rights abuses associated with deforestation and land conversion.

Tackling deforestation is essential to meet net-zero climate targets. The UN has made clear that commodity-driven deforestation should be eliminated by 2025. Protecting human rights ultimately protects forests.

The destruction of tropical forests is often preceded or accompanied by human rights abuses including labour rights abuses, land use conflict and failure to secure the free prior and informed consent (FPIC) of Indigenous peoples and local communities.

If companies and financial institutions are serious about tackling deforestation they must take comprehensive action on the associated human rights abuses.

Key findings

Currently too few companies are recognising the importance of addressing human rights abuses as part of their approach on deforestation.

• Our Forest 500 assessments found that a third (33%) of the companies assessed did not have a single publicly available human rights policy for any of the commodities they were assessed for.
• Not a single company with the greatest influence on tropical deforestation had a publicly available policy in place for all of the seven human rights indicators for each of the forest-risk commodities they are exposed to through their supply chains.

Companies in forest risk supply chains do not operate independently; they are funded by financial institutions, which is why the finance sector must use their leverage to require companies to take human rights abuses seriously.

• Our Forest 500 assessments found that 59% of financial institutions (88 out of 150 assessed) did not have a single publicly available policy on human rights.
• The latest Forest 500 report found that 125 of those financial institutions were providing US$83.6 billion to the 115 companies without any human rights commitments.

All companies and financial institutions must recognise that deforestation cannot be eliminated without effective action on associated human rights abuses.

• Companies need to continue setting and implementing strong commitments on human rights.
• Financial institutions need to set strong and comprehensive policies on associated human rights abuses and start engaging their financed clients/holdings.

We were joined by speakers from ClientEarth and Terra de Direitos for a webinar to launch the briefing and discuss the connection and importance of human rights and deforestation, the current landscape in Brazil, and data on the financial institutions and companies assessed in the Forest 500. The webinar had a focus on practical actions that finance, companies and policymakers can make now.

A recording of the full webinar is available below – or you can listen to the event as a podcast.