Top Amazon oil and gas financiers 'fail to protect' Rainforest, its peoples

By Bryan Ludeña, Lays Ushirobira, Dave Walsh* 
Stand.earth and the Coordinating Body of Indigenous Organizations of the Amazon Basin (COICA) have called on major international banks to end the financing of oil and gas extraction in the Amazon, in order to protect the remaining 80% of the world’s largest rainforest by 2025, as a new report underscores the abyss between the environmental and social policies claimed by the top financiers versus the destruction they are bankrolling in the region. This report comes as the Amazon is at an imminent tipping point, which threatens Indigenous Peoples, local communities, the forest and its biodiversity, and the continuity of life on the planet.
The report “Greenwashing the Amazon” reveals that, on average, 71% of the Amazon is not effectively protected through the environmental and social risk management frameworks of the five top financiers of Amazon oil and gas – Citibank, JPMorgan Chase, Itaú Unibanco, Santander, and Bank of America. 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.
HSBC, another major bankroller of Amazon oil and gas, is the only one in the analysis that presented a positive example of policy. In December 2022, the British bank made a commitment to exclude oil and gas financing from the Amazon. This policy has shown good results so far: no new transactions are recorded for HSBC in Stand’s Amazon Banks Database in 2023, which captures the banks involved in loan and bond underwriting transactions for companies with oil and gas activities in the Amazon regions of Peru, Ecuador, Brazil and Colombia.
The report also details how unrestricted flows of capital to the oil and gas sector are threatening Indigenous Peoples and their territories. The analysis shows that in Ecuador, oil and gas blocks are overlapping with 65% (4.5 million hectares) of Indigenous Territories. Data from the country’s Ministry of Environment, Water, and Ecological Transition identifies more than 4,600 oil spills and contamination between 2006 to 2022, with over 530 of these oil spills occurring in Indigenous Territories, severely affecting livelihoods of Indigenous Peoples.
“Since oil exploitation began 60 years ago in the Ecuadorian Amazon, we have been promised progress, health, well-being and education, but above all, a dignified life. However, since then, Indigenous Peoples have only been victims of a corrupt system that perpetuates violence against us, takes away our territory, natural resources, brothers and sisters, and our quality of life,” said José Esach, president of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon (CONFENIAE), that represents close to 1,500 communities belonging to the Amazonian nationalities Kichwa, Shuar, Achuar, Waorani, Sapara, Andwa, Shiwiar, Cofan, Siona, Siekopai and Kijus. “If banks really care about Indigenous rights, they should stop financing activities that are causing us harm. We demand that banks such as Citibank, JPMorgan Chase, Santander and Bank of America stop financing PetroEcuador, Gunvor and Vitol. The leaders of these financial institutions must assume their responsibilities.”
In Peru, oil and gas concessions overlap with 33% (15.4 million hectares) of Indigenous Territories. The industry expansion in Peru in recent years includes a multi-billion dollar upgrade to the Petroperú’s Talara refinery, which will escalate pressure to produce oil from the Peruvian Amazon in pristine rainforests that are the homes of the Achuar, Wampis, Kichwa, Quechua, and Urarina Peoples. Furthermore, the oil and gas sector threatens to destroy reserves in Peru that are covered by pristine rainforests and are inhabited by some of the world’s last uncontacted Indigenous Peoples living in voluntary isolation. Almost 20% of an estimated area of 7,460,000 hectares of reserves designed for the protection of Indigenous Peoples in isolation and initial contact situations overlap with oil and gas blocks.
“The State, banks, and companies exploiting oil and gas in the name of ‘progress’ are complicit in attacking the lives of the PIACI and all Indigenous peoples, as well as our Peruvian Amazon which holds more than 32.5 million hectares of intact forests and the biodiversity that sustains the lives of our peoples and the planet. We demand that JPMorgan Chase, Citibank, and Bank of America take responsibility for the damage they are causing in the Peruvian Amazon, and they internalize the consequences we are experiencing as their own. These banks must realize that if the contamination and destruction of these lands continue, the PIACI will disappear with their territories and knowledge systems — and with them, our hope of saving the Amazon and the planet also disappears,” said Jorge Pérez, president of the Interethnic Association for the Development of the Peruvian Rainforest (AIDESEP).
Beyond the lack of geographical coverage, the study reveals that 72% of all fossil fuel financing transactions are structured in ways that minimize the identification and prioritization of environmental and social values in the banks’ risk management frameworks. The result is that due diligence processes may not accurately identify risks to people and nature, substantially limiting the application of mechanisms like exclusions and screens, which are designed to help banks make financing decisions on transactions and clients based on the possibility of adverse impacts.

The report reveals only one of top six banks financing oil and gas extraction in Amazon has an effective policy to protect the region

The report recommends that banks adopt a geographic exclusion covering all transactions involving the oil and gas sector in the Amazon. This is a similar, but more encompassing, approach to the Arctic exclusions adopted by banks in 2020 to protect the globally significant environmental and social values of that region. 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. In addition, the report recommends how banks can improve their policies generally by moving beyond managing for reputation risk and creating more forward-looking approaches that value the true costs of adverse impacts to people and nature as the world faces the twin crises of climate change and biodiversity loss.

Report highlights

The report reveals that many financial transactions are structured in ways that minimize the identification of environmental and social values in banks’ risk management frameworks. Over 560 transactions involving oil and gas activities by some 280 banks over the last 20 years in the Amazon were analyzed using Stand’s Amazon Banks Database, to determine whether deal structures that bypass exclusions and screens are common.

The North American banks Citibank and JPMorgan Chase are the top financiers of oil and gas in the Amazon, according to the Amazon Banks Database. The report shows that both banks have channeled $2.32 billion and $2.25 billion, respectively, to direct financing of the oil and gas sector in the region over the past 20 years.

Most of Citibank’s mechanisms for environmental and social risks management are only applied to project-related finance. Its geographical exclusion covers only 2% of the Amazon, while screens cover another 44% of the region. The report shows how policy loopholes and deal structures could weaken due diligence. For example, despite having a policy on Indigenous Peoples rights, Citibank still provided an estimated $125 million in financing to Hunt Oil Perú, a company set up for the Camisea Gas Project, which has violated Indigenous Peoples’ rights in the Peruvian Amazon. The transaction was a general corporate purpose syndicated bond – the most common deal structure in the database and the most limiting type of financing for bank due diligence.

The report also shows that, in 2023 alone, JPMorgan Chase provided an estimated $126 million in new direct financing for oil and gas production in the Colombian Amazon for Ecopetrol and Gran Tierra. In the same year, the bank was a leading financier of Hunt Oil in Peru for an additional $125 million in direct financing. Hunt Oil Peru is a partner in the Camisea Gas Project, which has impacted Uncontacted Indigenous Peoples in reserves overlapping oil blocks. In March 2024, JPMorgan Chase withdrew from the Equator Principles, which serve as a common baseline and framework for financial institutions to identify, assess and manage environmental and social risks when financing projects.
The next biggest financier is Itaú Unibanco of Brazil. Itaú Unibanco’s ESRM policy does not have any exclusions or screens that apply to oil and gas operations in the region. An analysis of the transactions captured in the Amazon Banks Database reveals that 99% of the bank’s deals related to oil and gas in the Amazon over the last 20 years do not qualify for review under the Equator Principles, although they were related to major oil and gas producers, such as Eneva, Frontera, Geopark, Petrobras, Petroquimica Comodoro Rivadavia and Transportadora de Gas del Perú.
The Spanish bank Santander – Europe’s largest financier of oil and gas in the Amazon and fourth largest worldwide – provided almost $1.4 billion in direct financing to the sector between 2009 and 2023. Santander has one of the most extensive exclusion policies, covering 16% of the Amazon with prohibitions of financing oil and gas in UNESCO World Heritage Sites, Ramsar sites, and some IUCN protected areas. While better than other banks in this analysis, Santander’s policy falls short in practice: 85% of its transactions traced directly to the Amazon are for syndicated bonds, which lack transparency and reduce the bank’s liability as a contributor to adverse impacts.
Bank of America, the number one financier of oil and gas in the Amazon for 2023 according to “Banking on Climate Chaos”, has an ESRM policy that does not affect the majority of their financing in the Amazon. According to Stand Research Group, 99% of the transactions where Bank of America is a lender are syndicated and 95% are for broad use of proceeds. This means these deals would not necessarily have been subjected to enhanced screening.
“Greenwashing the Amazon” was endorsed by ActionAid, BankTrack, Rainforest Action Network, and 24 other civil society organizations.
Since Stand.earth launched the campaign Exit Amazon Oil and Gas, banks including BNP Paribas, Natixis, ING, and Credit Suisse committed to ending their financing of trade in oil from ports in Ecuador and Peru, which covers much of the crude oil trade from the Amazon. In addition, BNP Paribas, Société Générale, Intesa Sanpaolo, and Standard Chartered have also committed to various types of exclusions of Amazon oil and gas financing. HSBC and Barclays applied first comprehensive geographic exclusion policies that use the definition of Amazonia developed by the Amazonian Network of Georeferenced Socio-environmental Information (RAISG), as recommended by Stand.earth.
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*Source: BankTrack. Click here for full report