Search Results
Alignment of financial flows
Definitions
- DIRECT PRODUCER SUPPORT: Direct producer support includes payments to agricultural producers based on current output of a specific agricultural commodity; on-farm use of inputs; current or historical area, animals, revenue or income; or production of non-commodity goods and services, amongst others. For this analysis, public financial support provided directly to agricultural producers is used as a proxy for all public financial incentives that have the potential to drive nature loss and degradation. Producer support, including subsidies, can present major risks to nature by reducing farmers’ production costs, distorting their decisions on where and how much to produce, and incentivizing expansion into ecosystems such as forest areas, grasslands, or savannas.
Historical data and current trend methodology
- The data is taken from the OECD report “Agricultural Policy Monitoring and Evaluation 2024”. The estimate includes financial support provided directly to agricultural producers that is linked to output or the unconstrained use of inputs such as fertilizer or fuel. This type of support is considered the most damaging to biodiversity and ecosystems.
- OECD estimates that financial support provided directly to agricultural producers averaged USD 629 billion a year from 2021-2023. The potentially most harmful forms of support comprised 65% or USD 409 billion of this total.
Historical data sources
Full description, licensing and other information available at the original data source.
Public support to the agricultural sector, usually made in the form of subsidies, can pose risks to forests when not aligned with forest protection goals. While subsidies are often geared toward advancing development objectives related to food security and poverty reduction, they are also often influenced by policy priorities, political economy considerations, and powerful agricultural lobbies, without full consideration of environmental impacts. Subsidies can reduce farmers’ production costs and distort decisions about where and how much to produce. This can directly promote expansion of production, increasing the strain on available land resources and incentivizing conversion of forests and other natural ecosystems.
Various studies (see Detox Development Report and A multi-billion-dollar opportunity – Repurposing agricultural support to transform food systems) have identified coupled subsidies as the most environmentally damaging type of subsidy. As such, coupled subsidies, along with other forms of subsidies and public financing, are considered harmful finance due to the particular risks they pose to forests. Coupled subsidies provide financial incentives based on production volume, which can inflate market prices and thereby incentivize environmentally harmful production. For example, coupled subsidies can encourage the overuse of agrochemicals, promote monoculture, and drive deforestation. Coupled subsidies contribute to approximately 2.2 million hectares of forest loss annually.
Estimates suggest that between 2021 and 2023, governments spent an average of USD 409 billion (65% of the USD 629 billion spent on direct producer support) on subsidies linked to output or the unconstrained use of inputs such as fertilizer or fuel. In contrast, payments directed to the supply of environmental public goods by agricultural producers averaged just USD 1.7 billion annually—less than 0.3 percent of all direct producer support—suggesting that potentially harmful subsidies outnumber explicitly green ones by a factor of over 200 to 1.
Definitions
- CREDIT includes corporate loans, revolving credit, bond issuances, and share issuances.
Historical data and current trend methodology
- Forests & Finance tracks the finance received by companies directly involved in supply chains of six forest-risk commodities (beef, palm oil, pulp and paper, rubber, soy, timber) and mining of 12 minerals (aluminium, chrome, cobalt, copper, gold, graphite, iron, lithium, manganese, nickel, potash, zinc). Data is publicly available and can be downloaded directly from the website.
- For finance provided to forest-risk commodity companies:
- To calculate credit for forest-risk companies, filter for finance type “Bond issuance”, “corporate loan”, “revolving credit facility”, and “share issuance”. Download the data, insert pivot table, and sort the data based on Sector (column) and Year (row), and sum to get the totals per year, per sector, and overall. In 2025, credit data from 2013-2024 was available.
- For finance provided to mining companies:
- To calculate credit for mining companies, filter for finance type “Bond issuance”, “corporate loan”, “revolving credit facility”, and “share issuance”. Download the data, insert pivot table, and sort the data based on Sector (column) and Year (row), and sum to get the totals per year, per sector, and overall. In 2025, credit data from 2016-2024 was available.
Historical data sources
Full description, licensing and other information available at the original data source.
Private finance flowing to forests – both finance earmarked for protection, restoration, and sustainable management of forests and finance for potentially harmful activities – remains poorly tracked and difficult to measure. However, available evidence suggests that private investment into unsustainable agricultural commodity production and extractive activities such as mining – both known drivers of tropical deforestation – continues to flow largely unchecked.
Forests & Finance tracks the credits and investments received by companies directly involved in forest-risk commodity supply chains and mining. Their data shows that financial credit provided to forest-risk commodity companies involved in beef, soy, palm oil, pulp, paper, rubber, and tropical timber supply chains from 2013 to 2024 amounted to USD 521 billion, with a further USD 41 billion provided in investment during 2024. Credit provided to mining companies from 2016 to 2024 amounted to USD 572 billion, and investment in mining companies totaled USD 380 billion as of June 2025. The above graph shows credit provided to forest-risk commodity companies each year from 2013 to 2024 and credit provided to mining companies from 2016 to 2024.
Data from Forest 500 confirms that major financiers continue to invest in companies that trade or sell forest-risk commodities and products made with these commodities, despite the risks of fueling further deforestation. In 2024, the 150 financial institutions assessed by Forest 500 provided USD 8.9 trillion in active financing to companies most exposed to deforestation in their supply chains.
While there is growing recognition that companies and financial institutions should consider the risks their activities pose to the environment, recent analyses of the lending behavior of financial institutions with forest-risk investments showed that the finance sector has made little progress in addressing forest risks. In 2024, only 60 (40%) of the 150 financial institutions most exposed to commodity-driven deforestation risk in their investments had a deforestation policy for one or several of nine forest-risk commodities (beef, cocoa, coffee, leather, palm oil, pulp and paper, soy, rubber, and timber). This represents a decrease compared to 2023 (45%).
Policies for an economic transition
Historical data and current trend methodology
- Data is taken directly from the report “Green budgeting in OECD Countries 2024” by the Organisation for Economic Co-operation and Development (OECD). A full description of the underlying methodology can be found in the report.
- Data only includes the OECD’s 38 member countries.
Historical data sources
Full description, licensing and other information available at the original data source.
Green budgeting involves reviewing government budgets to identify how all aspects of public expenditure affect environmental policy aims, such as sustainable land use, biodiversity protection, and climate goals. Green budgeting leads to more coherent policymaking by analyzing the ways in which all elements of a government budget help or hinder the achievement of climate and environmental objectives. It can also make public expenditures more accountable to public interests by enhancing the transparency between the government and civil society. An increase in the number of countries adopting green budgeting will indicate that more governments are on track to implement policies that promote positive social, economic, and environmental outcomes.
As of June 2022, 24 of the Organisation for Economic Co-operation and Development’s (OECD) 38 member countries had implemented green budgeting measures – a significant increase from 2020. (At least three more countries – Hungary, Latvia, and Portugal – had plans to introduce green budgeting.) The increase in the number of countries that have adopted green budgeting shows governments’ strong interest in integrating climate and environmental objectives into budget processes.
Historical data and current trend methodology
- The number of countries with an existing or developing sustainable or green taxonomy has been calculated using the report “The New Geography of Taxonomies. A Global Standard-setting Race” by Natixis.
- Based on the overview of existing and developing sustainable and green taxonomies in the report, the countries in each category were counted. Since Indonesia, Malaysia, Thailand, and Vietnam are covered by the taxonomy of the Association of Southeast Asian Nations (ASEAN), their national taxonomies were excluded from the count.
- Natixis first published its analysis in 2021 and updated it in 2023 to reflect initiatives that have emerged since then. The analysis only covers taxonomies that existed or were under development as of July 2023.
Historical data sources
Full description, licensing and other information available at the original data source.
A sustainable or green taxonomy is a classification system that provides a common language and clear definition for what constitutes sustainable economic activities and assets. This helps to facilitate the alignment of financial flows with environmental and climate goals. Taxonomies provide businesses and investors with appropriate definitions for economic activities that are considered environmentally sustainable and help prevent misleading claims about environmental performance (greenwashing). The use of taxonomy-based approaches for scaling sustainable finance has gained traction worldwide over the past few years.
As increasing amounts of capital are mobilized around sustainable themes, commensurate frameworks must be developed to ensure that they deliver their intended impact. By applying a regulatory framework that establishes structure and clarity on what is considered environmentally friendly, a sustainable taxonomy provides countries with assurance that financing and investments in the low-carbon economy are being channeled to truly sustainable activities.
As of July 2023, 47 countries had developed sustainable or green taxonomies, including China, South Korea, the countries of the European Union, Colombia, Mexico, and the member states of the Association of Southeast Asian Nations (ASEAN). An additional 16 countries had taxonomies under development.
Definitions
According to the United Nations High Commissioner on Human Rights Michelle Bachelet, UN General Assembly Resolution 76/300 on the Human Right to a clean, healthy, and sustainable environment obligates states to take “preventative and responsive action to uphold rights to… healthy ecosystems, clean air and water, a safe and stable climate, adequate and nutritious food, and a non-toxic environment, as well as to participation, access to information, and access to justice for environmental matters” (OHCHR).
Historical data and current trend methodology
- 2020 data was calculated counting the number of countries that recognize the right to a healthy environment according to Annex II of the report “Right to a healthy environment: good practices”.
- 2025 data was taken directly from the article “Healthy Environment: A Human Right and Customary International Law”.
Historical data sources
Full description, licensing and other information available at the original data source.
The right to a clean, healthy, and sustainable environment is an umbrella right that includes substantive rights to clean air, water, a safe and stable climate, sanitation, healthy and sanitary food, non-toxic environments, and healthy biodiversity and ecosystems. It also includes the procedural rights of access to information, public participation, and access to justice. In 2022, the United Nations General Assembly adopted a resolution recognizing this human right and called on states to implement multilateral environmental agreements and take other steps, such as policy, capacity building, cooperation, and scaling of good practices, to implement it fully. Legal recognition is not the same as implementation, but it is an important first step.
As of 2025, 164 out of 193 (85%) UN member States had recognized the human right to a clean, healthy, and sustainable environment through treaties, constitutions, and/or laws. This represents an improvement from 2020, when 156 countries (80% of UN member States) recognized this right in some way. A growing trend of climate litigation is also being brought on human rights grounds. Notably, in 2023, a court in the US state of Montana ruled in favor of 16 youth plaintiffs that the state’s environmental law prohibiting the consideration of greenhouse gasses in environmental reviews violated the plaintiffs’ constitutional right to a clean and healthful environment.
Systems for an economic transition
Definitions
- ILLEGALITY: the conversion of forests that takes place in contravention of a country’s legislative framework, including its laws, regulations, instructions, and any other legal instrument (excluding international treaties unless they are incorporated into national law).
- AGRO-CONVERSION: forest-clearing for agriculture
Historical data and current trend methodology
- Forest Trends estimated tropical forest loss, tropical forest loss linked to agriculture and agro-conversion that was likely illegal in their reports Consumer Goods and Deforestation (2014) and Illicit Harvest, Complicit Goods (2021). The 2021 report focused on the 23 countries that comprised 87 percent of all tropical forest loss. These reports and the internal methodology document provided by Forest Trends to Climate Focus describe their methodologies in detail.
- To calculate agro-conversion that is likely illegal, Forest Trends multiplied tropical forest loss by the percent of loss driven by commercial agriculture by the percent of loss that is likely to be illegal.
- Reporting on agro-conversion and legality is limited. The lack of evidence of illegality is typically not an indication that the agro-conversion is in compliance, but an indication that more reporting is required. As such, Forest Trends’ estimates are conservative.
Historical data sources
Full description, licensing and other information available at the original data source.
To address deforestation, it’s essential to understand how much forest loss is driven by illegal activities because the tools to tackle illegal deforestation are different than those needed to combat deforestation in general. This indicator quantifies the extent to which agricultural commodities are grown on illegally cleared lands.
Forest Trends assessed forest loss in the 23 countries that comprise 87% of tropical forest loss from 2013 to 2019. In a 2021 report, they found that almost two-thirds (60%) of tropical forest loss was driven by commercial agriculture from 2013 to 2019. Almost three-quarters (69%) of this agriculture-driven forest conversion was in violation of national laws and regulations. The rate of illegal deforestation during this period increased by 28% compared to 2000 to 2012: from 3.5 million hectares (Mha) per year to 4.5 Mha per year.
These estimates are conservative. In countries where governance is weak and corruption widespread, the lack of evidence of illegality is typically not an indication that agro-conversion is in compliance with laws, but an indication that more reporting is required. Many countries have only limited data on which to assess illegality. Thorough audits rarely happen. The absence of evidence of illegality should not be taken as evidence of compliance with laws and regulations.
Given the evidence available, Forest Trends reports with confidence that at least 69% of agro-conversion (i.e., forest clearing) in the tropics was illegal between 2013 and 2019. If, instead of relying on the evidence available, it is assumed that all of the un-audited agro-conversion were illegal, Forest Trends’ estimates of illegal tropical agro-conversion would jump to 94%, or 59% of all tropical forest loss. If it were assumed that none of the un-audited agro-conversion were illegal, then Forest Trends’ global estimate of illegal agro-conversion would only drop from 69% to 61%. These could be considered the upper and lower bounds of illegal agro-conversion between 2013 and 2019: unlikely less than 61%, but maybe as high as 94%.
Historical data and current trend methodology
- World Justice Project Rule of Law Index Factor 2: Absence of Corruption was used.
- Number of countries analyzed in 2012-2013: 96 countries ;2014: 98 countries; 2015: 101 countries; 2016: 112 countries; 2017-2018: 112 countries; 2019: 125 countries; 2020: 127 countries; 2021: 138 countries; 2022: 139 countries; 2023: 141 countries; 2024: 142 countries. The chosen threshold for inclusion in the analysis is set at 0.6, indicating an absence of high levels of corruption.
Historical data sources
Full description, licensing and other information available at the original data source.
Good governance is foundational to implementing national forest policies and achieving international commitments (e.g., the Glasgow Leaders’ Declaration). Governance can be undermined by corruption, whereby decision-making and implementing policies, is undercut by those in power for political or financial gain. Corruption tends to be worse where resource constraints have weakened institutional capacity and where there are significant disparities in power. In the land-use sector, corruption has been linked with the allocation of concessions, the sale of timber and carbon credits, and prosecution decisions, to cite just a few examples.
This indicator from the World Justice Project Rule of Law Index assesses the absence of corruption in governments on the basis of three forms of corruption: bribery, improper influence by public or private interests, and the misappropriation of public funds or other resources, and scores countries on a scale of 0 to 1. Countries where corruption is largely absent (countries that receive a score of 0.6 out of 1 or higher) represent 32% of all countries. This figure has remained generally stable since 2012, which indicates that corruption has remained present in approximately two-thirds of all countries.
Historical data and current trend methodology
- Data comes from the Berggruen Governance Index.
- Number of countries surveyed between 2000-2019: 134 countries. The chosen threshold for inclusion in the analysis is set at 0.6, indicating a high level of delivery capacity to implement political priorities.
Historical data sources
Full description, licensing and other information available at the original data source.
Robust governance systems, including the capacity of governments to implement political priorities, are needed to accelerate the transition to an economy that is resilient and advances forest, sustainable land use, biodiversity, and climate goals. The Berggruen Governance Index, which assesses the quality of governance and democracy globally, defines “delivery capacity” as the state’s ability to set and achieve policy priorities by allocating adequate resources, ensuring an absence of public sector theft (and corruption), territorial authority and providing predictable enforcement.
As of 2019, only 23% of countries (31 out of the 134 assessed in the Berggruen Index) demonstrated good capacity to deliver on public policies. This proxy indicator suggests that governments have limited ability to implement their policy commitments. Recent data suggests a trend of declining state capacity in several countries in recent years (e.g., in the United States, the United Kingdom and most countries in the European Union), although some progress appears to have been made in some countries (e.g., in Mexico).
