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UK & Dutch banks invest $55 million in controversial Cerrado tree farms

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The U.K. government and Dutch development bank FMO committed $55 million toward commercial tree plantations primarily in Brazil’s Cerrado savanna. The agreement, announced Sep. 24, was struck with Latin America’s largest investment bank, BTG Pactual, through its forestry project, the Timberland Investment Group (TIG). However, Mongabay investigations have raised concerns about the project. The reforestation project involves buying up pasturelands close to the construction of the world’s largest paper and pulp factory and turning them into eucalyptus monocultures. According to experts, tree plantations are exacerbating, rather than helping, the Cerrado’s environment challenges. “The Netherlands and the UK are investing in false solutions. Tree plantations are part of the problem. They are fast growing and therefore use vast amounts of water, depleting water sources,” Merel van der Mark, the Forests & Finance Coalition coordinator, wrote to Mongabay. “Monoculture tree plantations are a tremendous fire hazard, a biodiversity desert and use huge amounts of pesticides.” Brazil’s Cerrado savanna, crucial for regulating 40% of Brazil’s freshwater, is facing its worst drought in 700 years, and the high water consumption of eucalyptus monocultures, 30-60 liters (8-16 gallons) of water daily per tree, is worsening drought conditions linked to climate change and extreme weather. The recent announcement comes just a week after Meta, the owner of Facebook and Instagram, committed to buying up to 3.9 million carbon credits from the same group. As of 2023, BTG Pactual held $67 million in shares and bonds at the global pulp and paper giant Suzano, which also owns…This article was originally published on Mongabay

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