HSBC Holdings PLC (LSE:HSBA) has been named as one of ten global banks funding the deforestation of an area in Paraguay described by naturalist David Attenborough as one of the world’s last wildernesses.
Environmental group Global Witness says the banks are funding cattle companies that have chopped down 75,000 hectares of forest in the Gran Chaco region in the past three years alone.
One of South America’s largest forests, Gran Chaco is home to 3,400 species of plants and 500 types of birds and covers an area three times the size of the UK.
HSBC is said to have lent Brazil-based cattle group Minerva US$210 million (£167 million) between 2021 and 2023, according to Global Witness.
Total lending during that period to cattle groups operating in Gran Chaco has been US$1.7 billion with US banks JP Morgan and Bank of America accounting for more than half (56%) of this financing.
HSBC along with three of the other lenders (Rabobank, BBVA and Mitsubishi) have policies to eliminate high-risk forest commodity investments and to not provide services to customers either directly or indirectly involved in deforestation.
The policy applies specifically to "high-risk" cattle processors with a slaughterhouse capacity of 500 cattle per day or more, such as key Gran Chaco operators Minerva Foods and Frigorífico Concepción, Global Witness said.
Forest500 ranks HSBC 11th globally among financial institutions for its approach to deforestation based primarily on their public policies, but these can often contain “significant gaps” said the group.
Global Witness added that none of the ten banks cited responded specifically to the allegations but HSBC said “We do not comment on client relationships but our current approach to nature and deforestation is outlined in our Net Zero Transition plan”.
HSBC introduced a deforestation policy in 2017 after being slated by Greenpeace for funding palm oil companies cutting down forests in Indonesia.
The bank has also been criticised repeatedly for being one of the world’s largest lenders to coal, oil and gas producers.