Banks Provided $595 Billion to High-Risk Sectors
Financial institutions increased lending for mining and agriculture, sectors often linked to widespread deforestation.
Updated on Oct. 14, 2026 in Financial Services
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Between 2020 and 2025, global banks provided $595 billion in loans and underwriting to companies operating in sectors associated with forest destruction. This total included $351 billion for high-risk agricultural commodities and $244 billion for mining operations.
Why it matters
The steady rise in capital allocation toward these industries complicates corporate sustainability goals and heightens the regulatory risk for firms sourcing raw materials. Increased financing for extraction and agriculture indicates shifting capital flows toward sectors that face growing scrutiny regarding land-use impacts.
Banks directed $351 billion toward high-risk agriculture and $244 billion to mining between 2020 and 2025, with pulp and paper production seeing a 157 percent increase in funding since 2016. Indonesia alone received $67.1 billion in financing for pulp and palm oil industries since 2020.
The details
Financial institutions utilized both direct loans and underwriting services to support firms involved in soy production, mining, and timber. This capital facilitates the scaling of operations in tropical regions across Southeast Asia, South America, and Africa. The 137 percent surge in soy production funding and the 157 percent increase in pulp and paper support demonstrate an aggressive pivot toward resource-intensive commodity markets.
Timeline
2016 to 2025: Period of increase for annual mining and agricultural financing.
2020 to 2025: $595 billion in loans provided to companies associated with forest destruction.
October 19, 2026: International biodiversity negotiations are scheduled to begin in Yerevan.
Market Landscape
The expansion of credit to resource-intensive industries follows a multi-year trend of increased capital flows into mining and agricultural commodities. This growth occurs as global regulators prepare for upcoming international biodiversity negotiations, setting the stage for future compliance debates.
Operators in sectors reliant on these commodities should anticipate stricter supplier environmental audits as financing faces heightened scrutiny. Review current procurement contracts to ensure environmental compliance clauses can withstand potential shifts in global lending standards.
The takeaway
The sustained increase in bank funding for high-deforestation-risk industries signals an environment where supply chain sustainability will increasingly impact capital costs. Monitor the outcomes of the October 2026 biodiversity negotiations for new regulatory signals that may alter lending accessibility.
What happens next
International biodiversity negotiations are scheduled to begin on October 19, 2026, in Yerevan, Armenia.
Further reading
Explore deeper trends in corporate capital allocation and risk management in our Financial Services section.
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Should banks be held accountable for environmental damage caused by the companies they choose to fund?
