Financial institutions face significant exposure to deforestation and land conversion, with US$77 billion in funding provided to forest-risk sectors between January 2023 and June 2024 alone. This risk extends beyond just forests. Land conversion affects various ecosystems such as the Brazilian Cerrado and Gran Chaco, where savannahs and dry forests face destruction with far less attention. These activities frequently converge with financial crimes including money laundering, corruption, and document fraud, as well as human rights abuses such as land grabbing, the destruction of community livelihoods, and widespread negative health impacts – which are detailed further in our research report, Financial Crimes and Land Conversion: Uncovering Risk for Financial Institutions.
Based on extensive research and collaboration with global financial institutions, this report brings attention to the issues of deforestation and land conversion through a financial crime lens. Key findings include:
Although firms may be considering their exposure to deforestation and land conversion through an ESG lens, they may not be as aware of the high risk it poses from a financial crime perspective, given the significant amount of land conversion activity that is converges with – often enabled, facilitated or driven by – other financial crimes.
Narco-cattle ranching to launder the proceeds of drug trafficking; timber operations acting as front companies for the smuggling of other contraband; corruption enabling the procurement of permits for land-clearing; and financial flows from high secrecy tax havens funding land conversion activities are all examples of this convergence that FIs may be exposed to through direct or indirect exposure to value chains that include high-risk commodities like timber, avocados, cattle, soy, rubber, minerals, palm oil, coffee or cocoa.
Given this extensive overlap, the presence of deforestation and land conversion might be treated by firms as a red flag and key indicator for other serious financial and predicate crimes.
The financial sector appears to be highly exposed to financial crime risk associated with deforestation and land conversion: almost half of financial institutions sampled reported operating with or in high-risk sectors or areas, yet over a quarter said they did not undertake specific related due diligence.
Furthermore, between a fifth and a third of survey respondents stated that their firms had borne witness to third parties attempting to hide financial crime or unethical business practices linked to land conversion.
The following resources provide essential tools and information for understanding, monitoring, and addressing deforestation and land conversion challenges. From satellite-based monitoring platforms to international initiatives and specialised trackers, these resources equip financial institutions, researchers, and policymakers with the data and frameworks needed to implement sustainable practices, conduct due diligence, and support responsible investment decisions in regions vulnerable to environmental crimes.
A free digital risk assessment that enables the user to understand the financial crime risks associated with a particular country and commodity, including soy, palm oil, minerals, rubber, cattle, coffee, cocoa and timber – all of which are high risk for deforestation and land conversion.
A collection of 500 environmental crime case studies, searchable by country, crime and commodity.
European land monitoring data
Global agricultural data
Interactive online forest monitoring platform
Planetary-scale geospatial analysis platform
Global land use change monitoring
Brazilian annual land cover and use mapping
Satellite analytics for natural capital
Supply chain transparency for commodities
Satellite imagery and geospatial data
Information on EU deforestation regulation
International police coordination
Leading global environmental authority
List of goods produced by child or forced labour
Human rights organisation
Climate litigation organisation
Environmental nonprofit
Investigates environmental crimes
Tracking environmental justice disputes
Environmental investigation and monitoring
Ranks companies and financial institutions on deforestation policies
Indigenous rights organisation
Conservation economics organisation
Forest protection think tank
Investigates environmental and human rights abuses
Environmental campaigning organisation
Human rights research and advocacy
Environmental conservation organisation
Social dimensions of deforestation
Business and human rights research
Global research organisation
Conservation organisation
Ethical supply chain standards
Sustainability network for investors and companies
Sustainable timber certification
Environmental project funding
Sustainability certification
Policy framework
Sustainable agriculture certification
Corporate agriculture standards
Rainforest protection partnership
Reforestation initiative
European climate and environmental policy
European deforestation law
UK deforestation commodity law
Illegal mining operations generate approximately US$48 billion annually in criminal proceeds, with actual figures likely much higher when accounting for associated crimes such as tax evasion. These activities are incredibly diverse, spanning artisanal, small-scale, and industrial operations worldwide, causing devastating impacts including environmental pollution, ecosystem destruction, human rights abuses, adverse health outcomes, compromised economic development, and security threats at both national and international levels.
Financial institutions face exposure to illegal mining through direct and indirect business relationships across high-risk sector value chains. This exposure creates vulnerability to physical, reputational, regulatory, and legal risks, alongside significant ESG implications. Notably, illegal mining rarely operates in isolation – it commonly converges with and enables other financial crimes including money laundering, corruption, fraud, terrorist financing, sanctions evasion, and human trafficking. Understanding these interconnections and risk patterns is essential for financial institutions to effectively map their exposure and develop robust responses to this serious environmental crime.
To elucidate these issues in more detail, we will shortly publish our upcoming report, Beyond Illegality: Mapping the Environmental-Financial Crime Nexus Across Illicit, Illegal, and Informal Mining, which brings attention to the issues of illegal mining through a financial crime lens. Key findings include:
Illegal mining rarely exists in isolation; rather, it converges significantly with an array of other financial and predicate crimes – including money laundering, tax evasion, bribery and corruption, fraud, terrorist financing, drug trafficking, sanctions evasion, modern slavery, and human trafficking.
The financial sector is highly exposed to illegal mining risk, with 84% of surveyed financial institutions operating in at least one high-risk business area for illegal mining.
Exposure can take place both directly and indirectly through a variety of business activities and third-party relationships along the value chain in high-risk sectors. The extraction and transit of minerals, however, represents a key threat to financial institutions.
The financial sector may be especially vulnerable since 40% of surveyed financial institutions with exposure to a high-risk sector for illegal mining do not screen for these specific risks.
Illegal mining poses physical, reputational, regulatory and legal risks to financial institutions.
The following resources provide essential tools and information for understanding, monitoring, and addressing illegal mining challenges. From research watchdogs to international initiatives, these resources equip financial institutions, researchers, and policymakers with the data and frameworks needed to implement sustainable practices, conduct due diligence, and support responsible investment decisions in regions vulnerable to environmental crimes.
A free digital risk assessment that enables the user to understand the financial crime risks associated with a particular country and commodity, including soy, palm oil, minerals, rubber, cattle, coffee, cocoa and timber – all of which are high risk for deforestation and land conversion.
A collection of 500 environmental crime case studies, searchable by country, crime and commodity.
International police coordination
International organisation tackling transnational organised crime
Human rights organisation
Climate litigation organisation
Environmental non-profit
Investigates environmental crimes
tracking environmental justice disputes
Environmental investigation and monitoring
Investigates environmental and human rights abuses
Environmental campaigning organisation
Human rights research and advocacy
Social dimensions of deforestation
Business and human rights research
Environmental conservation organisation
corruption and financial crime research organisation
Global research organisation
Conservation organisation
Ethical supply chain standards
Sustainability network for investors and companies
benchmark for transparency and accountability in the oil, gas, and mining industries
Diamond certification standard
operationalising OECD’s Due Diligence Guidance
Framework for sustainable mineral exploitation in Africa
Curbing the trade of conflict minerals
Best practice for mining governance
Advice for responsible mineral supply chain management
Increasing transparency in conflict mineral supply chains
With approximately US$20 billion in annual black-market value according to INTERPOL, the illegal wildlife trade represents one of the world's most profitable criminal enterprises and a significant risk for financial institutions. This industry affects over 40,900 protected species and operates globally – not just in biodiverse regions. Between 2015-2021, authorities recorded over 140,000 seizures covering roughly 4,000 different species, with actual volumes likely much higher than these figures suggest.
Financial institutions face exposure to the illegal wildlife trade through various transaction types and across diverse markets, with no single species accounting for more than 16% of confiscations. However, the industry presents an opportunity as well as a risk – by identifying and disrupting the illicit financial flows that enable wildlife trafficking, financial institutions can play a crucial role in dismantling these criminal networks while protecting themselves from regulatory, reputational, and financial risks associated with inadvertently facilitating environmental crimes. To elucidate these issues in more detail, we have published this report, Dissecting the Environmental-Financial Crime Nexus: A Spotlight on the Illegal Wildlife Trade, which brings attention to the issues of the illegal wildlife trade through a financial crime lens.
Key findings include:
The financial sector may be highly exposed to the illegal wildlife trade, with 81% of financial professionals surveyed respondents indicating that their organisation operates in at least one high-risk business area for the crime – generally relating to the transit of goods.
Although those surveyed displayed an awareness of the specific actions that could be taken to address their exposure to the illegal wildlife trade, concrete risk mitigation action is still lagging behind, with 40% of respondents who indicated exposure to a high-risk sector not screening for these risks.
Whilst financial institutions tend to demonstrate broad general knowledge of the illegal wildlife trade, this may be limited to a few high-profile areas, such as the ivory trade, and lack precise insight into many other key risk typologies, red flags, products and species.
Although only 8% of respondents stated that the illegal wildlife trade is not a major concern to their organisation, nearly 50% of respondents from financial institutions with a self-reported high awareness of environmental crime also reported having no policy on the illegal wildlife trade in place.
This leaves the financial sector vulnerable to both the illegal wildlife trade and the myriad other financial crimes which frequently converge with it, including fraud, tax evasion, money laundering, corruption and bribery, organised crime and drugs trafficking.
The following resources provide essential tools and information for understanding, monitoring, and addressing illegal wildlife trade challenges. From conservation monitors to international initiatives, these resources equip financial institutions, researchers, and policymakers with the data and frameworks needed to implement sustainable practices, conduct due diligence, and support responsible investment decisions in regions vulnerable to environmental crimes.
A free digital risk assessment that enables the user to understand the financial crime risks associated with a particular country and commodity, including wildlife.
A collection of 500 environmental crime case studies, searchable by country, crime and commodity.
International agreement and organisation targeting trade in endangered wild animals and plants
Union of governments and civil society organisations working on conservation
Crime - International police coordination
Human rights organisation
Climate litigation organisation
Environmental non-profit
Investigates environmental crimes
tracking environmental justice disputes
Environmental investigation and monitoring
Investigates environmental and human rights abuses
Environmental campaigning organisation
Human rights research and advocacy
database of threatened species
Social dimensions of deforestation
Business and human rights research
Environmental conservation organisation
wildlife trafficking research organisation
Taskforces bringing together businesses to tackle wildlife trafficking
Wildlife trafficking research organisation
Global research organisation
Conservation organisation
Ethical supply chain standards
Sustainability network for investors and companies
Sustainable plant certification
Sustainable timber certification
Sustainable seafood certification
Sustainability certification
Sustainable agriculture certification
Corporate agriculture standards
Preventing the purchase, transport, or selling of endangered wild species
Preventing the purchase, transport, or selling of endangered wild species
Preventing the trade in wildlife taken in violation of wildlife protection laws.
The Environmental Crimes Financial Toolkit is developed by WWF and Themis, with support from the Climate Solutions Partnership (CSP). The CSP is a philanthropic collaboration between HSBC, WRI and WWF, with a global network of local partners, aiming at scaling up innovative nature-based solutions, and supporting the transition of the energy sector to renewables in Asia, by combining our resources, knowledge, and insight.
The following resources provide essential tools and information for understanding, monitoring, and addressing deforestation and land conversion challenges. From satellite-based monitoring platforms to international initiatives and specialised trackers, these resources equip financial institutions, researchers, and policymakers with the data and frameworks needed to implement sustainable practices, conduct due diligence, and support responsible investment decisions in regions vulnerable to environmental crimes.
