What is the Environmental Crimes Financial Toolkit
What is the Environmental Crimes Financial Toolkit
The Environmental Crimes Financial Toolkit assists financial institutions in monitoring the risks related to deforestation and land conversion – and more broadly environmental crimes – that could be linked to financial operations. By highlighting red flags and risks connected with different types of environmental and financial crimes, the Toolkit helps financial institutions (FIs) strengthening their screening capacity when reviewing existing clients, onboarding new ones, and assessing sectoral risks.
The problem
The problem
All together, environmental crimes cost between US$110 and 281 billion a year to society, according to World Atlas of Illicit Flows. The same source highlights how environmental crimes are increasingly linked with an array of financial crimes – including bribery, corruption, money laundering, tax evasion, and fraud – and with other predicate crimes – such as human, drugs and wildlife trafficking.
Financial institutions are increasingly exposed to deforestation and land conversion through investment, capital provision, and financing of trade in hard and soft commodities – especially cattle, soy, palm oil, timber, cocoa, coffee, rubber, minerals, oil, and gas.
In addition, new regulations in the UK, EU, US and other jurisdictions across the world, are being developed to address deforestation, biodiversity loss and human rights violations connected to land conversion and global commodity supply chains. Such a complex and rapidly evolving context requires an unprecedented effort from financial institutions to manage legal, financial, and reputational risks and exposure, while also contributing to a more sustainable future, where people, businesses and nature all thrive.
The solution
The solution
The main goal of this project is to strengthen the ability of financial institutions to detect operations that are linked with environmental crimes, including deforestation and land conversions.
The immediate benefit of ECFT is to raise the awareness of financial institutions about the crimes in commodity supply chains, their links to predicate offences (financial crimes and human right abuses), and the risk they pose to FI’s operations, reputation, and exposure to non-compliance with upcoming regulations.
In the medium and long term, this will result in FI's designing better informed, more efficient, and more ambitious risk-control procedures and protocols on deforestation, land conversion, and environmental crimes.
Resources
Financial Crimes and Land Conversion Uncovering Risk for Financial Institutions - Full
Read the report
Financial Crimes and Land Conversion Uncovering Risk for Financial Institutions - Executive
Read the executive summaryContact us
If you would like to hear more about the Environmental Crimes Financial toolkit or get in touch with our team, please email us on: ecft@wwf.org.uk