KUALA LUMPUR, October 21 — A new report by the Forests and Finance Coalition reveals that major global banks have provided over US$395 billion in credit to industries driving deforestation and human rights abuses in tropical forests since the Paris Agreement. From January 2023 to June 2024 alone, US$77 billion was funneled into sectors such as palm oil, soy, and timber, which are linked to biodiversity collapse in regions like Southeast Asia, Latin America, and Africa.
The report emphasizes that voluntary banking initiatives have failed, and robust governmental regulations are urgently needed to align financial practices with global biodiversity goals. The report highlights that Malaysia ranks second in investment holdings in companies operating in forest-risk sectors, with banks providing US$16.4 billion in loans between 2016 and 2024.
While there have been some improvements in Malaysian financial institutions’ environmental policies, global civil society organizations, including Sahabat Alam Malaysia, stress the need for stricter regulations to halt the flow of destructive financing and promote sustainable, community-led solutions.
