Forest 500 – Finance report: Deforestation is a bad investment

Every year, Forest 500 assesses the 150 financial institutions with the greatest exposure to deforestation risk, ranking them on the strength and implementation of their policies on deforestation, ecosystem conversion and associated human rights abuses.

The latest Forest 500 – Finance report, Deforestation is a bad investment, published today by Global Canopy, finds that 150 financial institutions provided US$8.9 trillion to the deforestation economy through the Forest 500 companies as of 2024.

Nature loss and climate disruption pose growing risks to businesses and economies. The World Economic Forum’s Global Risks Report 2025 ranks nature loss among the top four global risks over the next decade. The Bank of England has also warned that climate change represents a threat to the UK’s economic stability.

Deforestation accounts for 11% of global greenhouse gas emissions. By financing nature loss, financial institutions jeopardise their own financial returns and the long-term stability of wider society.

The finance sector has a vital role to play in ending global deforestation – yet only a small minority of financial institutions take substantive action on forest loss. 

This year’s findings

The latest Forest 500 – Finance report finds that:

• The 150 financial institutions with the greatest exposure to deforestation risk provided US$8.9 trillion to the deforestation economy through the Forest 500 companies as of 2024. These 500 companies have outsized influence on global deforestation through the production, processing, procurement and trading of nine forest risk commodities.

• Despite their leverage to push companies, regulators and governments to transform supply chains and stamp out deforestation, 60% of the assessed financial institutions do not have a deforestation policy.

• Three financial institutions – Vanguard, BlackRock and JPMorgan Chase – together provided over US$1.6 trillion to the Forest 500 companies, giving them significant influence on deforestation, ecosystem conversion and associated human rights abuses. These financial institutions could drive rapid change by setting ambitious deforestation policies to monitor and engage with exposed portfolio companies.

• Across the 150 financial institutions, a total of US$864 billion was provided to corporate laggards – the Forest 500 companies that lack a public deforestation commitment. 

• Financial institutions headquartered in China, the US and France provided the most finance to laggards (see Map 1). 

Policy implementation is often incomplete or uneven

Deforestation policies without implementation do not drive change. Even among the financial institutions with comprehensive deforestation policies, there is too little evidence that these policies are being implemented through financial portfolios. 

Among the 60 financial institutions with deforestation policies:

• Only 27 (45%) had a policy to screen and monitor portfolio clients/holdings for compliance with deforestation and conversion-free standards 
• 32 (53%) had a process in place to engage with non-compliant clients/holdings and bring them into compliance for at least one commodity
• Just 17 had a time-bound threat of divestment if holdings do not become compliant, including Bank Negara Indonesia, Barclays and Schroders
• Banco Bilbao Vizcaya Argentaria (BBVA), Deutsche Bank and Lloyds Banking Group were the only financial institutions to screen and monitor all of the highest risk commodities covered in the Forest 500. 

Good implementation includes a robust and transparent process to screen and monitor portfolio companies for compliance with the financial institution’s policies on deforestation, conversion of natural ecosystems and associated human rights abuses. 

The way forward

Deforestation is a solvable crisis. It is a good entry point for businesses and financial institutions to navigate wider nature-related risks as it has the most advanced guidance, data and metrics in the nature space. 

Transparent disclosure of progress by companies is key to show investors and customers that deforestation risk is being effectively managed, and moves the whole sector forward. 

By acting on deforestation, financial institutions make progress towards meeting both climate and nature targets and address associated human rights and social issues.