The EU today sealed an agreement on its landmark anti-deforestation law, which in a world-first puts the bloc on a pathway to making sure banks and investors do not invest in forest destruction.

The agreement commits the European Commission to publishing a proposal that would require the financial sector to conduct due diligence checks to stop investments that cause deforestation within two years after the law enters into force.

Last year, Global Witness showed how EU-based financial institutions struck €30.6 billion worth of deals with 20 agribusiness companies accused of deforestation between 2016-2020...

The European Parliament, Commission and Council also agreed to prevent the import and sale of a comprehensive list of products linked to deforestation and forest degradation, including coffee, timber, palm oil, cattle, soy and cocoa and their derived products.

Negotiators agreed to add rubber, charcoal and printed products like books to this list. Other wooded land such as the Brazilian Cerrado, which represent almost two thirds of the EU’s soy-related deforestation, will be included within one year after the entry into force.

A disappointing outcome of the negotiations was the failure to agree meaningful new protections for Indigenous Peoples. Moves to require companies to respect international human rights law did not make it into the agreement.

The final text of the deforestation-free products regulation will be rubber-stamped by the European Parliament and Council in 2023, and then will start to be applied in all EU Member States within 18 months thereafter.