One of the largest bank in the eurozone, is facing a lawsuit filed by environmental and human rights activist groups over allegations of providing financial services to companies contributing to deforestation in the Amazon rainforest. The Brazilian NGO and the French group filed the lawsuit in the Paris judicial court, claiming that bank did not conduct adequate checks before financing these companies. The bank has stated that its clients must have a "zero deforestation" strategy in their production and supply chains by 2025.
Deforestation is Brazil's primary source of greenhouse gas emissions, and climate campaigners are increasingly using legal action to pressure large companies to transition to a low-carbon economy. French companies are mainly targeted due to a 2017 French law that holds them responsible for identifying and preventing risks to human rights and the environment resulting from their business activities.
This is the second lawsuit targeting the bank on the grounds, with another complaint filed recently. The first ruling based on this law is expected to be announced Tuesday in a case involving one of oil major. The bank has stated that it requires "full traceability" from its clients regarding their supply chains of beef and soy from the Brazilian Amazon and Cerrado. It has pledged to no longer provide financial products or services to those that do not comply.
The Bank has emphasised financial institutions' need for a collective commitment to effectively address the issue, stating that simply ceasing to finance these actors would not positively impact their practices, as they could easily find alternative lenders. The outcome of the lawsuit against the bank could have significant implications for the accountability of financial institutions in financing activities contributing to deforestation in ecologically sensitive areas like the Amazon rainforest.