The health of the world’s forests has fallen to “dismal” levels, endangering human wellbeing and the global climate, according to a stark new report. The study warns that financial systems are continuing to fuel deforestation by investing heavily in industries that clear land, undermining international pledges to halt forest destruction.
Since 2021—when global leaders and corporate executives vowed to stop deforestation—forest loss has actually increased. Subsidies for livestock farming, large-scale monocrops, logging, and other extractive activities have driven the trend, the report by Climate Focus found.
In 2024 alone, 8.1 million hectares (20 million acres) of forest—an area roughly half the size of England—were lost through fires, logging, and land clearing. This exceeds the levels seen at the time of the 2021 COP26 summit in Glasgow, where the goal of zero deforestation by 2030 was set. According to the latest Forest Declaration Assessment, the world is now 63% off track to meet that target.
“Each year, the gap between commitments and reality grows wider, with devastating impacts on people, the climate, and economies,” said Erin Matson, lead author of the report and a senior consultant at Climate Focus. “Forests are essential infrastructure for a livable planet. Continued failure to protect them puts our shared prosperity at risk.”
A System Rewarding Destruction
The report highlights a vast imbalance between the money directed toward activities that destroy forests and funding for conservation. Agricultural industries responsible for 85% of forest loss in the past decade receive an average of $409 billion (€387 billion) in annual subsidies—almost 70 times the $5.9 billion provided each year for forest protection and restoration.
“Efforts to protect forests don’t stand a chance as long as our economic system rewards quick profits from destruction,” said Franziska Haupt, a partner at Climate Focus. “Leaders must enact bold, binding reforms to transform the system that still incentivizes forest loss.”
Fires and Carbon Emissions
Forest fires, especially in the Amazon, are a growing concern. In 2024, record droughts turned vast areas of rainforest into tinder, with many blazes deliberately started to clear land for agriculture. The resulting carbon emissions were seven times higher than the average of the previous two years—exceeding Germany’s total annual greenhouse gas output. Researchers warn that the Amazon is approaching a critical tipping point from which recovery may be impossible.
Financial Institutions Under Scrutiny
Private banks and investment firms are also accelerating deforestation. A separate analysis by Global Witness found that financial institutions have earned $26 billion from financing deforestation-linked companies since the 2015 Paris Agreement—around $7 million every day.
US banks, led by Vanguard, JPMorgan Chase, and BlackRock, made the largest profits at $5.4 billion. European banks, including BNP Paribas and Rabobank, earned $3.5 billion, while UK institutions such as HSBC and Schroders gained $1.2 billion. Chinese financial institutions also made $1.2 billion, despite national policies meant to restrict lending to environmentally harmful businesses.
“We are watching major banks bankroll the destruction of the world’s rainforests—and profiting from the ashes,” said Alexandria Reid, forests lead at Global Witness. “If world leaders want to change this, they must act now to end the profits driving this crisis.”
Turning Point at COP30
Hopes for progress are focused on COP30, scheduled to take place next month in Belém, Brazil—the first UN climate summit to be held in the Amazon. Brazil plans to propose the Tropical Forests Forever Facility (TFFF), a new funding mechanism that aims to raise $125 billion for countries preserving intact forests.
“The overall numbers are dismal, but the future of forests doesn’t have to be,” said Matson. “New initiatives like the TFFF could spark real change. If COP30 delivers, next year’s report could finally tell a story of progress.”
Financial institutions are expected to purchase about 80% of the TFFF bonds, potentially offsetting criticism that they profit from forest destruction.
Still, only 40% of financial institutions currently have deforestation policies, despite forests being worth an estimated $150 trillion in global economic value.
“I want companies and investors to leave COP30 thinking, ‘We must act now or we’ll be left behind,’” said Elisabeth Hoch of Climate & Company. “The summit can generate momentum—but only if the financial sector finally has the courage to change.”
