Due Diligence Breakdown: Banco do Brasil Enables Deforestation Through Credit
The new study, “Rural Credit and Environmental Risk: Challenges of Sustainable Financing in the Field,” reveals a critical gap in the socio-environmental due diligence of major financial institutions.
An in-depth investigation by World Animal Protection uncovered that Banco do Brasil (BB) approved R$1.4 million in rural credit for the purchase of 1,019 head of cattle at Fazenda São Francisco, located in the Pantanal, in December 2021. Alarmingly, this financing occurred months after the property had been embargoed by Ibama for illegally clearing 96.74 hectares of native vegetation.
The study aims to go beyond this individual case, exposing the structural weaknesses in Brazil’s rural credit control mechanisms. Funding economic activities on land legally embargoed by Ibama suggests that public resources—such as those from the Constitutional Financing Fund of the Midwest (FCO)—may be flowing to enterprises with socio-environmental violations.
World Animal Protection’s findings indicate that this is not an isolated issue. The problem extends beyond the Pantanal and is systemic, as evidenced by Banco do Brasil’s inclusion in Ibama’s 2025 “Operation Caixa-Forte,” which investigated financing of embargoed properties in the Cerrado biome.
It is imperative that financial institutions strengthen their due diligence processes—particularly public banks like Banco do Brasil. Given their institutional role, these banks must lead by example, ensuring that financing and investments promote genuinely sustainable practices in full compliance with environmental legislation and socio-environmental responsibility policies.
