*

Report says top banks' protection policies ineffective

*

Banks urged to stop financing oil and gas extraction

*

Indigenous people say not consulted about projects

By Andre Cabette Fabio

RIO DE JANEIRO, June 12 (Thomson Reuters Foundation) -

F ive of the world's top banks are failing to implement effective

policies to protect the Amazon when financing oil and gas

extraction in the region, a report said this week, accusing the

financial giants of "greenwashing".

Produced by environmental advocacy group Stand.earth and the

Coordinating Body of Indigenous Organizations of the Amazon

Basin (COICA), the report urged the banks to stop financing oil

and gas extraction to help protect 80% of the world's largest

rainforest by 2025.

On average 71% of the Amazon is not effectively protected

through the environmental and social risk management (ESRM)

frameworks of the five top financiers of Amazon oil and gas -

Citibank, JPMorgan Chase ( JPM ), Itau Unibanco, Santander and Bank of

America ( BAC ), according to the report, Greenwashing the Amazon.

"This means these banks leave most of the Amazonian

territory vulnerable, with no risk management for climate

change, biodiversity, forest cover and Indigenous peoples' and

local communities' rights," the report's authors said in a

statement.

They added that the report "underscores the abyss between

the environmental and social policies claimed by the top

financiers versus the destruction they are bankrolling in the

region".

The report said that HSBC ( HSBC ), which has also financed Amazon

oil and gas, was the only bank in the analysis that presented a

positive example of policy, citing its decision in 2022 to

exclude oil and gas financing from the Amazon.

The other banks challenged the report's findings, saying

their policies do protect biodiversity and Indigenous

territories.

Angeline Robertson, senior investigative researcher at

Stand.earth and lead author of the report, said extraction of

oil and gas not only leads to the burning of more fossil fuels

but also created infrastructure that facilitated forest

destruction.

"Oil and gas are the tips of the spear with deforestation"

as roads built for fossil fuel projects are later used in the

expansion of soy, palm oil and other commodities deeper into the

forest, she told the Thomson Reuters Foundation.

RISK OF TIPPING POINT

The report analyzed over 560 transactions related to

fossil fuel financing by some 280 banks over the last 20 years

using the Amazon Banks Database to determine whether deal

structures that bypass exclusions and screens were common.

It found that 72% of all fossil fuel financing transactions

were structured in ways that minimize the identification and

prioritization of environmental and social values in the banks'

risk management frameworks.

This means that risks to people and nature may not be

accurately identified, limiting the application of exclusions

and screens, which are designed to help banks make financing

decisions, it said.

According to a 2023 assessment by Brazilian environmental

NGO Arayara, governments have awarded 255 oil and gas blocks in

the region with another 547 assigned for future development.

Between them, the banks invested over $20 billion in oil and

gas projects in the Amazon over the last 20 years, 47% of the

total amount detected by the report.

In terms of impact of oil and gas extraction on Indigenous

peoples, the report cited government data from Ecuador

identifying more than 4,600 oil spills and contamination between

2006-2022, with over 530 of these spills occurring in Indigenous

lands.

The report recommended that the banks adopt a geographic

exclusion covering all transactions in the oil and gas sector in

the Amazon.

"This is proposed as the only viable solution to avert a

tipping point in the Amazon, which must remain at least 80%

protected in order to avoid a dieback, stop biodiversity loss,

mitigate climate change, and uphold Indigenous Peoples' and

local communities' rights," it said.

A spokesperson for Citi said in a statement that the bank

had "a comprehensive Environmental and Social Risk Management

Policy, which outlines our expectations for clients and requires

us to do enhanced due diligence around activities with elevated

risks related to human rights, biodiversity, Indigenous Peoples,

critical habitats, community conflict and/or environmental

justice".

The spokesperson also said the bank engaged directly with

clients to evaluate their capacity to manage specific

environmental and social risks.

A spokesperson for JPMorgan Chase ( JPM ) said the bank supported

fundamental principles of human rights, including Indigenous

people's rights, across all its business.

"Our 2023 ESG (Environmental, Social and Governance) Report

reflects our policies and practices regarding environmental and

social risks as well as human rights, including restricted

activities and sensitive business activities," the spokesperson

added.

Itau Unibanco, Latin America's largest bank and the only one

analysed by the report with no exclusions or screens that apply

to oil and gas operations in the Amazon, said in a statement it

had been working to "fight deforestation through monitoring of

environmental, social and climate risks".

Santander said in an emailed statement that "all financing

decisions are oriented by a rigorous set of directives ... and

all our activities are aligned with the region's environmental

norms".

Bank of America ( BAC ) declined to comment but referred the Thomson

Reuters Foundation to its Environmental and Social Risk Policy

Framework.

The report also criticized the lack of consultation with

Indigenous peoples, and the fact that these communities were not

able to veto oil and gas projects that might affect them.

In an email interview, Fany Kuiru Castro, head of COICA,

said effective rules to consult with Indigenous peoples were

needed.

"No single Amazon oil barrel has gone through a consultation

process leading to free, informed consent," she said.