RIO DE JANEIRO, BRAZIL – Dutch investment bank ING will not finance oil and gas trading in Peru due to concerns over the industry’s impact on indigenous communities in the region declared as Sacred Water Zones in the Amazon, a document accessed by Reuters showed.
The decision marks a policy breakthrough for the company after it halted similar financing in Ecuador earlier this year, along with peers including Credit Suisse and BNP Paribas, following pressure from activists.
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Scientists believe that the conservation of the Amazon rainforest, the world’s largest tropical area, is critical to avoid the most catastrophic effects of climate change, due to the large number of greenhouse gases it absorbs.
However, the rainforest is being rapidly deforested, with devastating consequences for climate and biodiversity.
The role of European lenders in supporting trade from the Amazon came under scrutiny in August 2020 following a report by advocacy groups Stand.earth and Amazon Watch that analyzed oil exports from the region to the United States.
ING’s move comes in the week that world leaders meet in Scotland for climate talks aimed at accelerating action to limit global warming.
While ING has not directly funded oil and gas exploration and production in the country, it has previously offered credit to those moving it out of the region.
“Indigenous peoples living in the Amazon Sacred Water Zones in Ecuador and Peru have called on banks to stop financing oil development in the region, as it poses a threat to them and the surrounding ecosystem,” the Dutch bank’s document stated.
“We have financed the region’s oil trade, but we decided in early 2021 not to sign new contracts for exports from Ecuador, and we decided in November 2021 not to sign contracts for exports from Peru,” it said.
An ING spokesman told Reuters that it had updated its policy regarding financing, available on its website, on November 3. However, he declined to give details of the bank’s financial exposure in the region.
According to the NGO Amazon Conservation, Peru is the Amazon nation with the second-highest level of deforestation as of mid-September 2021, behind even more aggressive logging in Brazil.
From 2002 to 2019, a total of 19,700 square kilometers of the Peruvian Amazon were devastated, an area more than 12 times the size of London.