This post is inspired by Hiroko Tabuchi’s recent Article in the New York Times entitled, How Big Banks Are Putting Rain Forests in Peril.
According to World Resources Institute, only 15% of the world’s forests remain intact, 30% have been cleared, 20% degraded and 35% fragmented. The most recent culprit can be found in half of the packaged goods sold in the US, conflict palm oil. According to Rainforest Action Network:
Demand for palm oil is skyrocketing worldwide. The recent spike in use by the US snack food industry is due in large part to Conflict Palm Oil being used as a replacement for controversial trans fats. The oil is extracted from the fruit of the oil palms native to Africa, now grown primarily in Indonesia and Malaysia but also expanding across Central and West Africa and Latin America.
Globally, Indonesia is incurring the highest rate of forest loss. One of the largest deforesters in Indonesia (with over a million acres of land rights) is Rajawali Group, who received $235 million in loans, in part, to purchase more landholdings. The prominent US bank lending to Rajawali Goup, Bank of America.
How are these new landholdings cleared to make way for African oil palms, forest fires. Included in the Tabuchi piece:
Daily emissions from Indonesia’s forest fires last year at times exceeded emissions produced by all economic activity in the United States. A recent Harvard and Columbia study estimated that the fires caused at least 100,000 premature deaths across Southeast Asia. The World Bank estimates that the fires cost Indonesia’s economy $16 billion.
According to the World Wildlife Fund (WWF), Indonesia’s rainforests are home to the critically endangered orangutan. Also per Tabuchi, rescued orangutans are running out of areas to be released.
Interestingly, there is one person who can help make amends. His name is Charles O. Holliday Jr, who is also known as Chad. Chad Holliday served as the Chairman of the Board at Bank of America from April 2010 to September 30, 2014. This was during the time the loans were transacted. He also currently serves as a Director at WWF, under CEO Carter Roberts. According to Bank of America’s Forests Practices Policy,
Bank of America will use due diligence measures to assure that lending proceeds are not used to finance commercial projects or operations that result in resource extraction from, or the clearing of: I. Primary tropical moist forests. II. Intact forests as defined by the World Resource Institute (WRI).
Brian Moynihan, CEO of Bank of America, needs to welcome back Chad Holliday to his board and let him be responsible for putting procedures in place to ensure adherence to lending policies, particularly as it relates to forest-related portfolios. I think Carter Roberts should encourage him. Is Chad Holliday capable of getting this done? He should be. After all, Chad Holliday is the author of, Walking The Talk, The Business Case for Sustainable Development.