A group of NGOs filed a complaint with the French National Prosecutor’s Office, alleging that BNP Paribas, Crédit Agricole, BPCE, and Axa all contribute to and profit from illegal deforestation in the Amazon. This differs from a “Complaint” in the American legal sense, but a press release from the NGOs describes the legal theory:

“The Financial Action Task Force, the global money laundering and terrorist financing watchdog, has identified environmental crime as one of the most profitable criminal enterprises globally. In Brazil most of the deforestation is illegal and is often connected to other violations of criminal law such as corruption, money laundering and fraud.

BNP Paribas, Crédit Agricole, BPCE and Axa, by holding bonds issued by companies profiting from environmental crimes, are helping to reintroduce the proceeds of these offences into the legal circuit, when bonds are repaid with proceeds derived from illegal deforestation.”

The complaint calls on the French National Prosecutor’s Office to investigate the alleged crimes and bring charges if sufficient evidence is found. It is unclear whether formal charges will be brought. This is a great example of the hidden legal risks of ESG. The role of the financial institutions doesn’t come in the form of directly funding deforestation projects, but rather by holding bonds issued by companies that allegedly drive illegal deforestation. Potential ESG liability can lie in company supply chains, or in enabling behaviors like financing or advising. This complaint is a reminder that legal and reputational exposure isn’t always limited to direct operations – it can arise through a company’s broader web of activities.