8 facts about sustainable finance and how it affects you

The document highlights how EU-based financial institutions, including banks and pension funds, invest in projects that cause land grabs and environmental damage, often in violation of their own policies. It argues that voluntary measures are insufficient and that the EU is falling behind countries like Brazil and China in implementing social and environmental risk management. The text asserts that a lack of robust regulation increases financial risks for investors, noting that community opposition can increase operating costs by 29 times. It calls for mandatory due diligence, a broader sustainability taxonomy beyond climate risks, and harmonised public reporting requirements.

• EU-based financial institutions are significant funders of large-scale commercial agriculture in tropical regions, which frequently results in human rights abuses and deforestation. The EU investment industry is valued at over €22.8 trillion, representing 138% of the European GDP.
• Major global financial players have been implicated in backing land grabs. Specifically, Deutsche Bank and the International Finance Corporation were linked to rubber projects in Laos and Cambodia, while Standard Chartered, HSBC, and Citibank held nearly US$ 1.5 billion in shares in the parent company of Golden Veroleum, which was accused of harassing communities in Liberia.
• The EU is lagging behind other nations in regulating sustainable finance. Countries including Brazil, China, Bangladesh, Nigeria, Indonesia, and Peru have already introduced reporting and risk management requirements for banks and other financial institutions.
• Failure to address environmental, social, and governance (ESG) risks creates significant financial liability. For a USD$10 million investment, operating costs can be 29 times higher than normal if a project is halted due to local community opposition. Additionally, 93% of extractive, logging, and agribusiness concessions in eight tropical countries involved land already inhabited by local communities.
• Voluntary initiatives and one-time due diligence are ineffective. UN studies indicate that the Principles of Responsible Investment and the UN Global Compact are not being implemented. Furthermore, a 2016 study of 362 natural resource-based investment cases showed that 58% of disputes began during the identification, preparation, and establishment phases, while 31% started during the operational phase, proving that due diligence performed only at the feasibility stage is limited.

APA

Global Witness (n.d.). 8 facts about sustainable finance and how it affects you. https://globalwitness.org/en/campaigns/land-deals/8-facts-about-sustainable-finance-and-how-it-affects-you/

Chicago

Global Witness. 8 facts about sustainable finance and how it affects you. n.d. https://globalwitness.org/en/campaigns/land-deals/8-facts-about-sustainable-finance-and-how-it-affects-you/.

Wikipedia

{{cite report |author=Global Witness |title=8 facts about sustainable finance and how it affects you |url=https://globalwitness.org/en/campaigns/land-deals/8-facts-about-sustainable-finance-and-how-it-affects-you/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{globalwitnessndfacts, author = {{Global Witness}}, title = {{8 facts about sustainable finance and how it affects you}}, institution = {Global Witness}, url = {https://globalwitness.org/en/campaigns/land-deals/8-facts-about-sustainable-finance-and-how-it-affects-you/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }