- Sustainable Economic Systems
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- New briefing paper urges banks and financiers to make nationally recognized areas off limits to harmful financing
New briefing paper urges banks and financiers to make nationally recognized areas off limits to harmful financing
Friends of the Earth US’ new briefing paper, “Protecting biodiversity from harmful financing: Nationally and Sub-Nationally Recognized Areas,” calls on banks and financiers to protect nationally and sub-nationally recognized areas, such as parks, reserves, memorials, monuments, preserves, among others, by prohibiting direct and indirect financing to activities and projects which may harm these areas. National parks and other sub-nationally recognized areas, including Indigenous lands and community conserved areas, are well established mechanisms for protecting places with high biodiversity or conservation value. However, even if recognized and protected under local laws, nationally or sub-nationally recognized areas often remain vulnerable to harmful industrial, unsustainable, and extractive activities. This paper provides key lessons on the risks associated with investing in nationally recognized areas, as well as on how banks and financiers can do more to protect these areas from unsustainable development and projects.
This paper is part of Friends of the Earth US’ new Protecting Biodiversity from Harmful Financing briefing paper series, which underscores why banks and financiers should exclude harmful, unsustainable financing to activities and projects which impact critical, at-risk ecosystems. Each briefing paper is dedicated to a key area as identified by the Banks and Biodiversity Initiative’s eight proposed No Go Areas. Nationally and Sub-nationally recognized areas are considered as No Go Area 2, which is Paper 02 of the series. Briefing papers focusing on No Go Areas 4-8 are forthcoming.
Key takeaways of the report include:
- Banks and financiers should prohibit financing to harmful, industrial, extractive activities which negatively impact nationally recognized areas.
- The obtainment of permits and licenses should not be used as a proxy for legal compliance.
- Banks and financiers should strengthen due diligence processes to validate the legitimacy of required permits or licenses.
- Assessing a client’s environmental and human rights record should be an important criterion in screening out low quality, high risk clients.
- Banks and financiers should consider blacklisting companies with a recurring record of poor environmental and social performance.
- Financing harmful, high risk sectors, such as fossil fuels, preempts alternatives for financing sustainable development.
- The creation of conservation areas as a financing condition bears a poor record in delivering actual biodiversity conservation results, as host country governments may renege on such commitments.
- Many nationally recognized areas overlap with Indigenous lands and community conserved areas, and so it is vital that banks understand the historic and current ties that Indigenous and local communities may have to an area.
- Banks and financiers would benefit from improving or establishing strong Indigenous Peoples policies which protect the right to self-determination, sovereignty, and free, prior, informed consent.
Friends of the Earth US is part of the Banks and Biodiversity Initiative, a civil society coalition which advocates that banks and financiers strengthen their biodiversity policies and practices in order to halt and reverse biodiversity loss. Learn more at Banksandbiodiversity.org.