Credit Where It’s Due: Financial Institutions and Credit for Deforested Properties

This research paper by the Climate Policy Initiative and PUC-RIO analyzes the link between subsidized rural credit and deforestation in Brazil from 2020 to 2024. The study finds that a significant portion of public funds is channeled to properties with histories of deforestation, highlighting a misalignment between financial incentives and Brazil's environmental goals.

• Between 2020 and 2024, 36% of the volume of subsidized rural credit contracted went to properties that recorded deforestation after 2009, totaling R$ 205.6 billion out of R$ 567.7 billion for which a property could be identified via the Rural Environmental Registry (CAR).
• Public banks and credit cooperatives are the primary providers of subsidized credit associated with deforestation, accounting for 91% of the volume (R$ 43.4 billion) between August 2023 and July 2024.
• Specific financial institutions show high proportions of subsidized rural credit linked to deforested properties. Among public banks, Banco da Amazônia (70.8%) and Banco do Nordeste (51.9%) have the highest percentages. Among private banks, Rabobank leads with 63%, followed by Itaú (48%) and Santander (36%).
• Deforestation occurs both before and after credit is granted, suggesting that some producers may use subsidized funds to finance the clearing of land. For credit granted in 2020, 20% of properties deforested only before, 12% both before and after, and 3% only after the operation.
• The volume of subsidized resources directed toward properties with deforestation grew by 56% from 2020 to 2024 (from R$ 30.6 billion to R$ 47.6 billion), a rate that exceeds the 51% overall growth of subsidized rural credit linked to a CAR.
• Current regulations are insufficient to prevent deforestation-linked credit, as the only enforceable rule is the implementation of environmental embargoes, which the authors state capture only a small part of deforestation.

APA

Mourão, J., Stussi, M., & Souza, P. (2024). Credit Where It’s Due: Financial Institutions and Credit for Deforested Properties. Climate Policy Initiative. https://www.climatepolicyinitiative.org/publication/credit-where-its-due-financial-institutions-and-credit-for-deforested-properties/

Chicago

Mourão, João, Mariana Stussi, and Priscila Souza. Credit Where It’s Due: Financial Institutions and Credit for Deforested Properties. Climate Policy Initiative, 2024. https://www.climatepolicyinitiative.org/publication/credit-where-its-due-financial-institutions-and-credit-for-deforested-properties/.

Wikipedia

{{cite report |last1=Mourão |first1=João |last2=Stussi |first2=Mariana |last3=Souza |first3=Priscila |title=Credit Where It’s Due: Financial Institutions and Credit for Deforested Properties |publisher=Climate Policy Initiative |date=9 December 2024 |url=https://www.climatepolicyinitiative.org/publication/credit-where-its-due-financial-institutions-and-credit-for-deforested-properties/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mouro2024credit, author = {Mourão, João and Stussi, Mariana and Souza, Priscila}, title = {{Credit Where It’s Due: Financial Institutions and Credit for Deforested Properties}}, institution = {Climate Policy Initiative}, year = {2024}, month = dec, url = {https://www.climatepolicyinitiative.org/publication/credit-where-its-due-financial-institutions-and-credit-for-deforested-properties/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }