A comprehensive resource designed to help financial institutions mitigate their risk exposure to financial crimes associated with deforestation and land conversion.
This toolkit is designed to equip financial institutions with the knowledge and tools needed to understand and mitigate financial crime and human rights violation risks related to environmental crime, focusing on deforestation and land conversion, illegal mining, and the illegal wildlife trade. It currently covers 65 high-risk countries across the world in relation to certain key high-risk commodities (palm oil, soy, cattle, minerals, rubber, timber, coffee, cocoa, and wildlife).
Environmental crime stands as one of the world's largest criminal industries, valued at around US $275billion annually and growing at 5-7% per year – outpacing the legitimate economy by two to three times. This rapidly expanding criminal sector encompasses multiple serious offenses including illegal wildlife trade, illegal deforestation and land conversion, and illegal mining, with impacts ranging from biodiversity loss to human rights violations and national security threats.
Financial institutions face significant exposure to environmental crimes – now recognised as predicate offenses to money laundering by the FinancialAction Task Force (FATF) – through various business activities. Despite regulatory obligations to investigate related illicit financial flows, financial data remains underutilised in combating these crimes, with only one in three environmental crimes in the Amazon region including parallel financial investigations over the past decade. By enhancing their ability to identify and report suspicious transactions related to environmental crimes, financial institutions can both protect themselves from regulatory, legal, and reputational risks while playing a crucial role in disrupting criminal networks that threaten global environmental and sustainability goals.
The Environmental Crimes Financial Toolkit is developed by WWF and Themis, with support from the Climate Solutions Partnership (CSP). The CSP is a philanthropic collaboration between HSBC, WRI and WWF, with a global network of local partners, aiming at scaling up innovative nature-based solutions, and supporting the transition of the energy sector to renewables in Asia, by combining our resources, knowledge, and insight.
WWF has released a toolkit that will help financial institutions spot and reduce their risk to environmental financial crime exposure.
The new Environmental Crime Financial Toolkit (ECFT), which WWF co-developed with financial crime software company Themis, is an open-access platform designed to help financial institutions screen new clients and review existing ones, as well as identify risks related to land conversion, such as deforestation, that could be linked to financial crimes, WWF-UK drivers initiative lead John Dodsworth told Mongabay in an email. This, in turn, is meant to help the firms minimize their exposure to environment-related illegal activities.
WWF notes on its website that environmental crime, which is worth hundreds of billions of dollars annually, is the third-largest illegal activity globally. These crimes continue to grow by 5-7% per year, according to Interpol.
In a joint report published earlier this year, WWF and Themis noted that some 150 financial institutions had provided $6.1 trillion in funding to “350 companies with the greatest risk exposure to tropical deforestation” in 2023. Financial institutions can be exposed to potential illegal activities when they finance commodities linked to land conversion and deforestation, such as palm oil, cocoa, timber, coffee, minerals, oil and gas.
In the same report, the results of a survey by WWF and Themis showed that of 644 financial services professionals interviewed from 17 countries, 60% said their company did not have a land conversion risk policy. Half of the firms surveyed also worked with high-risk sectors at some point, but only 17% of them screen companies and clients on an ongoing basis, the survey found.
“Despite its rapid growth, environmental crime is rarely seen as a serious risk by financial institutions, but it in fact poses significant reputational and material risks to their operations, such as the potential of sanctions for enabling illegal activity,” WWF-UK CEO Tanya Steele said in a statement.
Themis CEO Dickon Johnstone added the toolkit is aimed at helping companies “understand and mitigate these risks, thereby protecting themselves and wider society and the environment from the devastating impacts of environmental crime.”
WWF’s Dodsworth told Mongabay that through the ECFT platform, users would be able to assess risks associated with specific commodities in different countries, and search for case studies and identify possible red flags. He added the toolkit will increase firms’ “ability to cross check information that is presented and in some cases to prompt additional questions or requests for information from the client.”
Dodsworth said the development of the toolkit was supported by the Climate Solutions Partnership, a five-year collaboration between WWF, the nonprofit World Resources Institute, and U.K. bank HSBC.
WWF has already held workshops with financial institutions and sector experts and government, “which have all showed interest in using the toolkit and incorporating this into their processes,” Dodsworth said.
WWF has collaborated with Themis, a financial crime software company, to launch a pivotal Environmental Crime Financial Toolkit.
The unveiling took place at the COP16 nature summit in Cali, Colombia. This open-access platform is designed to empower financial institutions to detect and monitor illicit activities tied to land conversion and deforestation effectively. It marks a significant step in minimizing the financial sector’s vulnerability to environmental financial crimes, which are estimated by INTERPOL to amount to US$110m-281m annually, growing by 5 – 7 percent each year.
The necessity for the new product stems from the alarming growth of environmental crimes, now ranked as the third largest illegal activity worldwide. Financial institutions face critical knowledge and procedural gaps in handling proceeds from crimes related to deforestation and land conversion, creating significant vulnerabilities within the global financial system.
WWF and Themis play critical roles in environmental and financial sectors by developing tools and strategies to address these crimes. Their efforts are directed towards enhancing the financial industry’s capabilities to identify and manage environmental risk factors involved in their operations.
The toolkit functions by equipping firms with the necessary resources to strengthen their screening processes, whether reviewing existing clients or onboarding new ones. It highlights red flags and risks associated with various types of environmental and financial crimes, aiding in comprehensive risk assessments across the financial landscape.
Additional features of the toolkit include its integration into existing systems of financial firms, facilitating a seamless adoption process. It offers practical digital resources that firms can implement to bolster their defences against environmental financial crimes.
Further implications and benefits of this toolkit were explored in a joint introductory report by WWF and Themis, titled ‘Financial Crime and Land Conversion: Uncovering the Risk for Financial Institutions.’ The report highlights substantial gaps in land conversion risk policies among financial institutions, emphasizing the urgent need to address these issues from both financial crime and ESG perspectives.
WWF CEO Tanya Steele commented, “Our natural world underpins every aspect of our societies and economies, yet we continue to witness its large-scale destruction – global wildlife populations have fallen on average by 73% since 1970. “Despite its rapid growth, environmental crime is rarely seen as a serious risk by financial institutions, but it in fact poses significant reputational and material risks to their operations, such as the potential of sanctions for enabling illegal activity. Environmental crime is therefore very much an economic as well as a conservation issue.”
Themis CEO Dickon Johnstone remarked, “The financial sector is potentially exposed to environmental crime risks through numerous business activities, including investment, trade finance and insurance. This naturally poses a threat from an ESG and reputational perspective but what’s more, the extensive convergence between environmental crime and other financial crimes can expose firms to serious legal and regulatory risks. Our hope is that this Environmental Crime Financial Toolkit will help firms to understand and mitigate these risks, thereby protecting themselves and wider society and the environment from the devastating impacts of environmental crime.”
WWF today launches a new Environmental Crime Financial Toolkit at the COP16 nature summit in Cali, Colombia, that will help financial institutions minimise their exposure to environmental financial crime worth US$110-281 billion annually and growing by 5 – 7 percent every year according to INTERPOL.
Developed by WWF and the financial crime software company Themis, the toolkit is an open access platform that equips firms to better detect and monitor illicit activity related to land conversion and deforestation, by highlighting red flags and risks connected with different types of environmental and financial crimes. It also helps financial institutions strengthen their screening capacity when reviewing existing clients, onboarding new ones, and assessing risks across the whole financial sector. It is a highly practical digital resource that firms can incorporate into their existing systems.
Despite environmental crime being the third largest illegal activity globally, financial institutions have major knowledge gaps and key vulnerabilities in the global financial system when it comes to handling the proceeds of deforestation and land conversion-related financial crimes. WWF and Themis surveyed 644 financial services professionals from across 17 countries for their joint introductory report, ‘Financial Crime and Land Conversion: Uncovering the Risk for Financial Institutions’, published earlier in the year.
Over 60% of financial services professionals surveyed said that a land conversion risk policy was either non-existent (45.7%) or not yet developed or in place (18.6%) in their firm. Notably, almost half of financial institutions sampled reported operating with or in high-risk sectors or areas, yet over a quarter said they did not undertake specific related due diligence, and only 17% of firms monitor or screen companies and clients on a periodic or ongoing basis rather than just in the early stages of a relationship. This creates a risk if bad actors only initiate illicit activity once they have been onboarded by a bank. The report notes that the knowledge and procedural gaps identified give cause for concern and indicate an urgent need to help firms address land conversion from a financial crime perspective, as well as an ESG one.
The Environmental Crime Financial Toolkit was created to help these firms reduce their risk exposure to the illicit financial flows associated with land conversion, and therefore ultimately reduce the financing and impact of this devastatingly harmful activity across the world. Financial Institutions may be exposed to land conversion activity through high-risk commodities, including cattle, soy, palm oil, timber, coffee, cocoa, rubber and minerals. Additionally, environmental crime frequently converges with and often enables different financial crimes, including corruption and bribery, fraud, money laundering, tax evasion, and drugs, wildlife and human trafficking.
Tanya Steele, CEO at WWF-UK, said: “Our natural world underpins every aspect of our societies and economies, yet we continue to witness its large-scale destruction - global wildlife populations have fallen on average by 73% since 1970. “Despite its rapid growth, environmental crime is rarely seen as a serious risk by financial institutions, but it in fact poses significant reputational and material risks to their operations, such as the potential of sanctions for enabling illegal activity. Environmental crime is therefore very much an economic as well as a conservation issue.
“The new Environmental Crime Financial Toolkit will help institutions understand these risks and take action to mitigate illegal deforestation and land conversion. The private sector, especially financial services, has a unique opportunity to help restore our natural world.”
Dickon Johnstone, CEO at Themis, said: “The financial sector is potentially exposed to environmental crime risks through numerous business activities, including investment, trade finance and insurance. This naturally poses a threat from an ESG and reputational perspective but what’s more, the extensive convergence between environmental crime and other financial crimes can expose firms to serious legal and regulatory risks. Our hope is that this Environmental Crime Financial Toolkit will help firms to understand and mitigate these risks, thereby protecting themselves and wider society and the environment from the devastating impacts of environmental crime.”
Celine Herweijer, Group Chief Sustainability Officer at HSBC, said: “As a global trade bank, HSBC understands the complexities of global supply chains and the need to take a comprehensive approach to risk management in supporting our clients. The Environmental Crime Financial Toolkit is a practical way of helping financial institutions to improve their understanding of the risks related to the natural environment alongside financial crimes and secure nature-positive outcomes.
WWF (World Wide Fund for Nature), the independent conservation organisation, has launched a new Environmental Crime Financial Toolkit at the COP16 nature summit in Cali, Colombia, to help financial institutions minimise their exposure to environmental financial crime.
Developed in collaboration with financial crime software company Themis, the WWF toolkit is an open-access platform that equips firms to better detect and monitor illicit activity related to land conversion and deforestation, by highlighting red flags and risks connected with different types of environmental and financial crimes.
It also helps financial institutions strengthen their screening capacity when reviewing existing clients, onboarding new ones, and assessing risks across the whole financial sector. It is a highly practical digital resource that firms can incorporate into their existing systems.
The launch comes as environmental financial crime is worth between $110billion and $281billion and is growing by five to seven per cent every year, according to INTERPOL.
Dickon Johnstone, CEO at Themis, said: “The financial sector is potentially exposed to environmental crime risks through numerous business activities, including investment, trade finance and insurance. This naturally poses a threat from an ESG and reputational perspective but what’s more, the extensive convergence between environmental crime and other financial crimes can expose firms to serious legal and regulatory risks.
“Our hope is that this Environmental Crime Financial Toolkit will help firms to understand and mitigate these risks, thereby protecting themselves and wider society and the environment from the devastating impacts of environmental crime.”
Helping financial institutions understand environmental crime
Despite environmental crime being the third largest illegal activity globally, financial institutions have major knowledge gaps and key vulnerabilities in the global financial system when it comes to handling the proceeds of deforestation and land conversion-related financial crimes.
In a survey of 644 financial services professionals, WWF and Themis found that over 60 per cent said that a land conversion risk policy was either non-existent (45.7 per cent) or not yet developed or in place (18.6 per cent) in their firm.
Almost half of financial institutions sampled reported operating with or in high-risk sectors or areas, yet over a quarter said they did not undertake specific related due diligence, and only 17 per cent of firms monitor or screen companies and clients on a periodic or ongoing basis rather than just in the early stages of a relationship. This creates a risk if bad actors initiate illicit activity after onboarding with a bank.
Recognising the urgent need to help firms address land conversion from a financial crime and ESG perspective, the companies created the Environmental Crime Financial Toolkit to help them reduce their risk exposure to the illicit financial flows associated with land conversion, ultimately reducing the financing and impact of this harmful activity globally.
Understanding the severity
WWF says that environmental crime frequently converges with and often enables different financial crimes, including corruption and bribery, fraud, money laundering, tax evasion, and drugs, wildlife and human trafficking.
“Our natural world underpins every aspect of our societies and economies, yet we continue to witness its large-scale destruction – global wildlife populations have fallen on average by 73 per cent since 1970,” explained Tanya Steele, CEO at WWF-UK.“
Despite its rapid growth, environmental crime is rarely seen as a serious risk by financial institutions, but it in fact poses significant reputational and material risks to their operations, such as the potential of sanctions for enabling illegal activity. Environmental crime is therefore very much an economic as well as a conservation issue.
“The new Environmental Crime Financial Toolkit will help institutions understand these risks and take action to mitigate illegal deforestation and land conversion. The private sector, especially financial services, has a unique opportunity to help restore our natural world.”
WWF and Themis’ published their introductory report, titled ‘Financial Crime and Land Conversion: Uncovering the Risk for Financial Institutions’, earlier this year.
Celine Herweijer, group chief sustainability officer at HSBC, said: “As a global trade bank, HSBC understands the complexities of global supply chains and the need to take a comprehensive approach to risk management in supporting our clients. The Environmental Crime Financial Toolkit is a practical way of helping financial institutions to improve their understanding of the risks related to the natural environment alongside financial crimes and secure nature-positive outcomes.”
A new toolkit developed by environmental charity World Wide Fund for Nature (WWF) and financial crime software company Themis aims to minimise financial institutions’ exposure to environmental financial crime. Launched at COP16, the Environmental Crime Financial Toolkit is an open access platform that seeks to equip firms to detect and monitor illicit activity related to land conversion and deforestation by highlighting red flags and risks connected with different types of environmental and financial crimes. Designed to be integrated with existing systems, the platform aims to help financial institutions strengthen their screening capacity when reviewing existing clients, onboarding new ones, and assessing risks across the whole financial sector.
According to Interpol, environmental financial crime is the third largest illegal activity globally, worth US$110-281 billion annually. In a recent survey by WWF and Themis, more than 60% of financial services professionals said that a land conversion risk policy was either non-existent (45.7%) or not yet developed or in place (18.6%) at their firm. Almost half of financial institutions sampled reported operating with or in high-risk sectors or areas, yet over a quarter said they did not undertake specific related due diligence, with only 17% monitoring or screening companies and clients on a periodic or ongoing basis. “Despite its rapid growth, environmental crime is rarely seen as a serious risk by financial institutions, but it in fact poses significant reputational and material risks to their operations, such as the potential of sanctions for enabling illegal activity,” said Tanya Steele, CEO at WWF-UK. “Environmental crime is therefore very much an economic as well as a conservation issue.”
WWF today launches a new Environmental Crime Financial Toolkit at the COP16 nature summit in Cali, Colombia, that will help financial institutions minimise their exposure to environmental financial crime worth US$110-281 billion annually and growing by 5 – 7 percent every year according to INTERPOL.
Developed by WWF and the financial crime software company Themis, the toolkit is an open access platform that equips firms to better detect and monitor illicit activity related to land conversion and deforestation, by highlighting red flags and risks connected with different types of environmental and financial crimes. It also helps financial institutions strengthen their screening capacity when reviewing existing clients, onboarding new ones, and assessing risks across the whole financial sector. It is a highly practical digital resource that firms can incorporate into their existing systems.
Despite environmental crime being the third largest illegal activity globally, financial institutions have major knowledge gaps and key vulnerabilities in the global financial system when it comes to handling the proceeds of deforestation and land conversion-related financial crimes. WWF and Themis surveyed 644 financial services professionals from across 17 countries for their joint introductory report, ‘Financial Crime and Land Conversion: Uncovering the Risk for Financial Institutions’, published earlier in the year.
Over 60% of financial services professionals surveyed said that a land conversion risk policy was either non-existent (45.7%) or not yet developed or in place (18.6%) in their firm. Notably, almost half of financial institutions sampled reported operating with or in high-risk sectors or areas, yet over a quarter said they did not undertake specific related due diligence, and only 17% of firms monitor or screen companies and clients on a periodic or ongoing basis rather than just in the early stages of a relationship. This creates a risk if bad actors only initiate illicit activity once they have been onboarded by a bank. The report notes that the knowledge and procedural gaps identified give cause for concern and indicate an urgent need to help firms address land conversion from a financial crime perspective, as well as an ESG one.
The Environmental Crime Financial Toolkit was created to help these firms reduce their risk exposure to the illicit financial flows associated with land conversion, and therefore ultimately reduce the financing and impact of this devastatingly harmful activity across the world. Financial Institutions may be exposed to land conversion activity through high-risk commodities, including cattle, soy, palm oil, timber, coffee, cocoa, rubber and minerals. Additionally, environmental crime frequently converges with and often enables different financial crimes, including corruption and bribery, fraud, money laundering, tax evasion, and drugs, wildlife and human trafficking.
Tanya Steele, CEO at WWF-UK, said: “Our natural world underpins every aspect of our societies and economies, yet we continue to witness its large-scale destruction – global wildlife populations have fallen on average by 73% since 1970. “Despite its rapid growth, environmental crime is rarely seen as a serious risk by financial institutions, but it in fact poses significant reputational and material risks to their operations, such as the potential of sanctions for enabling illegal activity. Environmental crime is therefore very much an economic as well as a conservation issue.
"The new Environmental Crime Financial Toolkit will help institutions understand these risks and take action to mitigate illegal deforestation and land conversion. The private sector, especially financial services, has a unique opportunity to help restore our natural world.”
Dickon Johnstone, CEO at Themis, said: “The financial sector is potentially exposed to environmental crime risks through numerous business activities, including investment, trade finance and insurance. This naturally poses a threat from an ESG and reputational perspective but what’s more, the extensive convergence between environmental crime and other financial crimes can expose firms to serious legal and regulatory risks. Our hope is that this Environmental Crime Financial Toolkit will help firms to understand and mitigate these risks, thereby protecting themselves and wider society and the environment from the devastating impacts of environmental crime.”
Celine Herweijer, Group Chief Sustainability Officer at HSBC, said: “As a global trade bank, HSBC understands the complexities of global supply chains and the need to take a comprehensive approach to risk management in supporting our clients. The Environmental Crime Financial Toolkit is a practical way of helping financial institutions to improve their understanding of the risks related to the natural environment alongside financial crimes and secure nature-positive outcomes.
