UK banks have pocketed over $1.2bn (£908m) in income linked to deforestation since the Paris climate accords were signed in 2016, according to research by climate action organisation Global Witness and research consultancy Profundo.
Analysis of hundreds of thousands of deals with major deforestation-linked companies – amounting to a total value of $184bn over nearly 10 years – netted lenders, investors and insurers $26bn from financing deforestation-related activity, according to analysis of just 50 of Forests & Finance’s 279 deforestation-risk listed companies.
Financial institutions around the world have averaged around $7m a day in income from that activity.
HSBC was by far the largest UK beneficiary of deforestation, receiving $348.4m in income from loans it had made to the alleged deforesters.
Aberdeen was the UK’s second-largest beneficiary, at a total of $206.8m – largely from shares held in deforesting companies.
“We are witnessing major banks bankroll a fire sale of the world’s rainforests. And they’re reaping obscene profits from the ashes,” said Global Witness forests lead Alexandra Reid.
Land use change – primarily deforestation – accounts for 11% of carbon emissions, and in 2023 alone the world lost 3.7 million hectares of tropical primary forest, according to the World Resources Institute. That figure spiked to 6.7 million hectares in 2024, thanks to a record two million hectare jump in the fire-related loss.
“As long as tearing down forests remains more profitable than protecting them, the world will not meet its 2030 goal to halt deforestation, with catastrophic consequences for the climate.
“If world leaders want to change this, they must act now to shut down the profits fuelling this crisis.”
The majority of tropical deforestation is driven by a handful of sectors, and often by large multinational businesses, according to the report’s authors.
While finance income was highest for asset-heavy industries like paper and pulp, or palm oil production – which combined represented 89% of analysed deforestation income – authors emphasised that higher finance income did not necessarily equal higher levels of deforestation.
Instead, authors highlighted studies showing agriculture as the driver of 90% of deforestation – with cattle a particularly bad offender, despite its low capital intensity.
HSBC – which in July was the first UK bank to leave the Net-Zero Banking Alliance – declined to comment when asked by Global Witness, saying it did not comment on specific client relationships.
Aberdeen also did not respond to Global Witness.
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