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Deutsche Bank and the rainforest

Between 2013 and 2022, German banks and financial service providers invested around 549.

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Deutsche Bank and the rainforest

Between 2013 and 2022, German banks and financial service providers invested around 549.2 million US dollars in companies linked to the clearing of the Amazon in Brazil. This was the result of an evaluation by the French research platform Disclose and the non-governmental organization Repórter Brasil, which was based on data from the “Forest

The figures contradict the banks' voluntary commitments not to co-finance deforestation in the rainforest. The Amazon rainforest stores significant amounts of CO2 and therefore plays a key role in the climate. If it dies, droughts and floods could increase worldwide.

The results, which are exclusively available to WELT, show: Germany's largest financial institution, Deutsche Bank, is also the frontrunner when it comes to investments in companies with high risks of deforestation.

She has invested almost $272 million since 2013. Between 2020 and 2022 alone it will be almost 70 million dollars.

The money house writes in its own framework for dealing with environmental and social risks: "We distance ourselves from all activities and relationships that are demonstrably linked to serious human rights violations or environmental damage."

They would therefore "to the best of their knowledge" not fund any projects in rainforests or associated with conversion of primary forests or illegal logging.

Between 2013 and 2022, Deutsche Bank invested 87.7 million dollars in the Brazilian group JBS. The company is the largest meat producer in the world. But JBS has repeatedly been criticized for working in its supply chain with companies that illegally clear Amazon areas.

The NGO Global Witness, for example, found that JBS allegedly bought cattle from at least 327 farms that illegally burned down Amazon areas between 2017 and 2019.

Deutsche Bank invested a total of 95.75 million dollars in Archer Daniels Midland (ADM), Cargill and Bunge - all American companies from the agri-food industry. They process soy, which they purchase from suppliers in Brazil, among others.

But apparently they have problems keeping their supply chain clean, as several reports from the media and NGOs show. In this case, the Cerrado, a savanna bordering on the Amazon, is particularly affected by the deforestation. Due to its deep root systems, the cerrado is an important carbon sink – meaning it absorbs more carbon than it releases. Despite this, only a small part of the savannah is under legal protection.

Many indigenous peoples live in the Cerrado, such as the Fecho de Pasto community of Capão de Modesto. According to reports from Global Witness, the community is being harassed and threatened by major soybean producers in an attempt to evict them from their land. ADM, Bunge and Cargill are said to have had business relationships with some of these producers.

In addition, according to research by the think tank "Chain Reaction Research", the three agricultural giants are said to have business relationships with soybean producers who are said to have cleared parts of the Cerrado for cultivation.

One of the soybean producers is SLC Agricola, in which Deutsche Bank has also invested directly – more than ten million dollars.

A spokesman for Deutsche Bank said when asked that the money house could not comment on actual or potential customer relationships for legal reasons.

But he emphasized: "We reject allegations that we knowingly finance projects or activities that are related to the deforestation of tropical primary forests or are located in sensitive areas in the sense of 'high conservation value'." This also applies to projects, of course , which lead to illegal deforestation.

In addition, Deutsche Bank is in constant dialogue with its customers and takes up environmental and social issues.

In doing so, she also responds to reports from the media and NGOs and obtains individual statements from customers. "On the basis of this overall picture, we decide on how to proceed," he explains. As a last resort, this could also mean ending a business relationship.

The total investment of almost $272 million is calculated from the stock and bond holdings in September 2022 as well as from loans and the so-called underwriting of stock and bond issues:

When a company issues stocks or bonds - i.e. places them on the stock or bond market - it is dependent on banks. An underwriter either already takes securities into their own portfolio before the issuing process is even started. Or he takes over the portion of the securities that could not be placed with the investors.

If several banks were involved in a loan or issue, Deutsche Bank's share was calculated using a rule of thumb. Most of the companies financed are active in several sectors and countries.

Here, too, a formula was used to estimate the proportion of the investment that is believed to have gone into business activities in Brazil, which pose a high risk of deforestation.

WELT took a look at the investments between 2020 and 2022 that went to JBS, ADM, Cargill, Bunge and SLC Agricola.

The data from Forest

Through its subsidiary DWS Group, Deutsche Bank also has exposure to JBS, ADM, Bunge and SLC Agricola stocks and JBS, ADM, Cargill and Bunge bonds. DWS Group holds some of the Bunge and ADM shares through the X-Tracker ETFs, which are not actively managed but track an index.

The DWS Group also told WELT that it could not comment on individual companies. However, the exchange with invested companies is an "integral part of the DWS investment process."

DWS sets clear goals for companies and calls for action plans. If no progress can be seen, they make use of their voting rights or express themselves publicly at the general meeting. If no improvement is evident, "we will consider excluding companies from the investment universes of the relevant products."

Commerzbank, DZ Bank and KfW IPEX-Bank, a subsidiary of the state development bank KfW, also have Forest

Commerzbank invested $44.6 million between 2013 and 2022, including in ADM, Cargill and Bunge. Between 2020 and 2022 it was more than eleven million dollars. Just like Deutsche Bank, Commerzbank does not want to comment on the customer relationship.

However, she emphasizes that business relationships with companies in the agricultural commodities sector should be checked for ecological concerns. They would also support their customers in making their business models sustainable. "We are convinced that change can only succeed if finance and the real economy work hand in hand," said a spokeswoman.

DZ Bank, the central institution of Germany's cooperative banks, has also invested in companies at risk of deforestation, the data shows.

The total is almost $23 million, between 2020 and 2022 it was almost $6.8 million. JBS invested $1.28 million and ADM, Cargill and Bunge accounted for $14.1 million.

DZ Bank emphasizes that, as a matter of principle, it does not finance any companies or projects that pose significant risks to the environment.

Your fund subsidiary Union Investment contacted around 50 companies this year to draw attention to the need for "zero deforestation", including JBS, according to a spokeswoman. "Both JBS and Bunge are currently blocked from Union Investment's sustainable funds due to the serious controversies surrounding the environment and biodiversity."

According to Forest, KfW IPEX-Bank, which focuses on international project and export financing, has between 2013 and 2022

A spokeswoman for KfW confirms: "In the past, KfW IPEX-Bank had direct business relationships with Bunge - but these expired at the end of last year and have not existed since."

At the time the credit decision was made, the financial institution had no indications that would have contradicted lending for environmental reasons. The total amount of almost 17 million dollars is not conclusive and comprehensible for KfW.

Katharina Beck, financial policy spokeswoman for the Greens in the Bundestag, sees the investments as a clear contradiction to the sustainability announcements made by the financial institutions. "If the results of the research are confirmed, I believe that the investment policies of the relevant financial institutions must be reviewed as soon as possible in order to credibly rule out these extremely unsustainable investments in the future," says the MP.

The citizens' movement Finanzwende calls for the immediate stop of investments. "The revelations make it clear that the path of voluntary commitments has failed," says Magdalena Senn, officer for sustainable financial markets. Many of the institutes would celebrate for their contribution to climate protection. "But when it comes to business, even the destruction of globally vital ecosystems is accepted."

Greenpeace is also appealing to banks to stop investing in companies like JBS. "Our own research also shows that European banks are financing companies on a large scale that are massively involved in the deforestation of the Brazilian rainforest," says Mauricio Vargas, finance expert at Greenpeace.

Bunge, ADM and SLC Agricola did not comment on allegations of direct or indirect involvement in deforestation of areas in Brazil.

JBS completely denied the allegations, claiming that the Global Witness research analysis was based on incorrect methodology and ignored Brazilian regulations.

A Cargill spokeswoman told WELT that the company does not purchase goods from illegally cleared land and would work to ban deforestation from its supply chains. In addition, they would respect internationally recognized human rights in their supply chains.

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