Funding destruction of the Amazon and the Cerrado- savannah A Fair Finance Guide Netherlands case study on deforestation risks in soy and beef supply chains 27 August 2020 About the Eerlijke Geldwijzer - Fair Finance Guide Netherlands This report has been commissioned by the Eerlijke Geldwijzer (Fair Finance Guide Netherlands) in cooperation with Hivos and Both ENDS. The Eerlijke Geldwijzer is a coalition of the following organisations: Amnesty International, Milieudefensie, Oxfam Novib, PAX and World Animal Protection. The aim of the Eerlijke Geldwijzer is to encourage corporate social responsibility by financial institutions. Not all coalition members of the Eerlijke Geldwijzer work on all themes and/or sectors on which the research of the Eerlijke Geldwijzer focuses. Reports on specific themes therefore do not necessarily reflect the opinion of all coalition members of the Eerlijke Geldwijzer. Fair Finance Guide Netherlands is part of Fair Finance International (FFI) an international civil society network initiated by Oxfam working in ten countries with over 70 CSOs, that seeks to strengthen the commitment of banks and other financial institutions to social, environmental and human rights standards. About this report This report investigates the financial involvement of Dutch banking groups, insurance companies and pension funds in deforestation in the Amazon and Cerrado regions, and the actions that these financial institutions active on the Dutch market are taking to prevent and stop deforestation. Authorship This report was researched and written by Jan Willem van Gelder and Barbara Kuepper of Profundo, with exception of chapter 1. Ward Warmerdam, Léa Pham Van, Lennart van Loenen, Stefanie Geurts, Retno Kusumaningtyas and Juliette Laplane (all Profundo) contributed to the data collection and analysis. Chapter 1 was written by Dr. Tim Boekhout van Solinge, geographer-criminologist, independent (UN) consultant and research fellow in criminology at the Erasmus University Rotterdam, with contributions by Dr. Dirk-Jan Verdonk, director World Animal Protection Netherlands. The front page cover photograph was made by Ria Sopala via Pixabay. Correct citation of this document: Van Gelder, J.W. and B. Kuepper (2020, August), Funding destruction of the Amazon and Cerrado-savannah - A Fair Finance Guide Netherlands case study on deforestation risks in soy and beef supply chains, Amsterdam, The Netherlands: Profundo. About Profundo With profound research and advice, Profundo aims to make a practical contribution to a sustainable world and social justice. Quality comes first, aiming at the needs of our clients. Thematically we focus on commodity chains, the financial sector and corporate social responsibility. More information on Profundo can be found at www.profundo.nl. Disclaimer Profundo observes the greatest possible care in collecting information and drafting publications but cannot guarantee that this report is complete. Profundo assumes no responsibility for errors in the sources used, nor for changes after the date of publication. The report is provided for informational purposes and is not to be read as providing endorsements, representations or warranties of any kind whatsoever. Profundo will not accept any liability for damage arising from the use of this publication. Contents Summary ................................................................................................................................... 1 Samenvatting ............................................................................................................................. 8 Introduction ............................................................................................................................. 15 Deforestation in the Amazon and Cerrado regions ............................................... 17 Deforestation in the Brazilian Amazon and Cerrado ................................................... 17 The Amazon, the largest rainforest and river ............................................................... 17 Deforestation figures and trends .................................................................................. 18 The Amazonian water cycle, tipping point, climate and zoonotic risks ..................... 20 Driving deforestation: soy and beef .............................................................................. 21 Enabling deforestation: Amazonian infrastructure ...................................................... 23 Finance for soy infrastructure ....................................................................................... 28 Pesticide use for soy farming ........................................................................................ 29 Public health ................................................................................................................... 30 Glyphosate and soy ........................................................................................................ 31 Violations of laws and (human) rights .......................................................................... 32 Human populations and risks of human rights violations........................................... 33 Corruption, law enforcement and governance ............................................................. 35 Poor land registry and land fraud leading to land grabbing ........................................ 35 Illegal deforestation and illegal forest fires (arson) ..................................................... 37 Murders ........................................................................................................................... 39 Animal cruelty: the soy connection ............................................................................... 40 Claims about responsible soy ....................................................................................... 42 Claim 1. The soy imported is not from the Amazon area ............................................ 43 Claim 2: The soy imported is deforestation-free. ......................................................... 45 Claim 3: The soy imported is sustainable ..................................................................... 47 How responsible is soy from companies lacking in CSR? .......................................... 49 Structure and key actors of the Brazilian soy and beef supply chains ................... 52 Brazil’s leading role as producer of soy and beef ........................................................ 52 Key actors in the Brazilian soy supply chain ................................................................ 53 Key actors in the Brazilian beef supply chain ............................................................... 55 Methodology to assess financial institutions ....................................................... 56 Objective and research questions ................................................................................. 56 Selection of financial institutions active on the Dutch market ................................... 57 Research steps ............................................................................................................... 57 Overview of the soy and beef supply chains and their involvement in deforestation and related issues .......................................................................................................... 57 Selection of companies in the soy and beef sectors ................................................... 58 Researching the financing of selected companies ...................................................... 59 Assessment of the policies of financial institutions.................................................... 59 Survey on engagement efforts ...................................................................................... 60 Overall assessment of the financial institutions .......................................................... 60 Due hearing and commitment to improve .................................................................... 61 How financial institutions active on the Dutch market deal with deforestation risks 62 Banking groups ............................................................................................................... 62 Financial involvement of Dutch banking groups .......................................................... 62 Policy assessments of Dutch banking groups ............................................................. 64 Engagement scores of Dutch banking groups ............................................................. 65 Overall assessments of Dutch banking groups ........................................................... 66 Insurance companies ..................................................................................................... 67 Financial involvement of insurance companies active in the Netherlands ................ 67 Policy assessments of insurance companies active in the Netherlands ................... 68 Engagement scores of insurance companies active in the Netherlands ................... 69 Overall assessments of insurance companies active in the Netherlands ................. 69 Pension funds ................................................................................................................. 71 Financial involvement of Dutch pension funds ............................................................ 71 Policy assessments of Dutch pension funds ............................................................... 73 Engagement