The UK government has rejected a key amendment to the Financial Services and Markets Bill that would force financial institutions to carry out mandatory checks on whether their investments are financing global deforestation and human rights.
Despite backing from the Labour and Liberal Democrat front benches, the government rejected the amendment – pledging instead an open-ended review of deforestation.
The Economic Secretary to the Treasury said the review process would be used to create “due diligence standards” but stopped short of saying mandatory checks would be brought into law.
Baroness Rosie Boycott campaigned for the amendment in the Lords. She said ““We must do everything we can to avoid our current descent into a nature-depleted chaos. What is good for forests is good for the economy and that is why MPs from across the political spectrum want to cut off the money pipeline to deforesting projects abroad.
“The mandatory due diligence law I’ve been fighting to introduce is long overdue. We must ensure UK finance uses the information already available to them to stop lending to the most egregious companies who deforest time and again.
The government’s position is in direct contradiction with its own expert taskforce on supply chain ethics, as well as businesses, campaigners and the House of Lords. Financial institutions handling more than £2.7 trillion also publicly backed the new law ahead of last night’s vote.
NGO Global Witness called the government’s position hypocritical. Cassie Dummett, Forests Campaign Lead at Global Witness, said “The UK government sells itself as a climate champion – but it has rejected yet another opportunity to turn rhetoric into action. It has firmly planted itself not only on the wrong side of business leaders, financial institutions, and their own experts – but also communities whose homes and livelihoods are being destroyed by rampant deforestation.
“Today’s disappointing outcome has pulled into question their commitment to tackle the climate crisis. Despite their many promises, they have kicked the can down the road on deforestation with another open-ended “review”.”