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US banks are some of the largest financial backers of companies extracting oil and gas from the Amazon rainforest, new research claims, raising fears the region is on the brink of an “ecological tipping point”.

In a new report titled ‘Capitalising on Collapse’, campaign group Stand.earth finds that fossil fuel companies secured US$20bn in loans and bond underwriting for their activities in Peru, Colombia, Brazil and Ecuador over the past 15 years, the majority of which was supplied by eight banks.

Six of these lenders are headquartered or act through a subsidiary in the US, including Banco Santander, Bank of America, Citi, Goldman Sachs, HSBC and JP Morgan, while two are Brazilian: Banco Bradesco and Itaú Unibanco.

Together, they supplied approximately US$11bn between 2009 and 2023, which directly supported oil and gas production and expansion of infrastructure, including pipelines, ports and refineries, in the Amazon region, Stand.earth claims.

In recent years, banks have reduced their trade finance exposures to Amazon oil and gas, while some in Europe, such as BNP Paribas and Rabobank, have taken a broader approach and restricted support for Amazon-related projects at all stages, including exploration, extraction and infrastructure.

An HSBC spokesperson tells GTR that in line with the lender’s updated energy policy, the bank will “no longer provide new finance or advisory services for new oil and gas fields, or any oil and gas fields and related infrastructure in environmentally and socially critical areas such as the Amazon Biome”.

A Citi representative says the bank is continuing to strengthen its environmental and social risk management policy to protect biodiversity and avoid deforestation in sensitive areas such as the Amazon. Bank of America, Bradesco and JP Morgan declined to comment, while Goldman Sachs, Itaú Unibanco and Santander did not respond.

Meanwhile, a representative of one lender tells GTR that many of the deals cited in the report are historic and dated. “15 years represents a long window of time, so many of these relationships and transactions are not current or active.”

But demand for Amazon oil remains strong, particularly in the US. Activists argue that a significant portion of capital flowing to Amazon fossil fuel companies and commodity traders dealing in goods originating from the region, is through less direct – or traceable – forms of finance.

Stand.earth estimates that indirect finance to Amazon oil and gas over the last 15 years could be in the region of US$385bn, including general corporate loans or credit facilities extended to oil traders, such as Gunvor or Trafigura, and state-owned Chinese companies like PetroChina and Sinopec.

“These players are particularly dangerous because they are capable of raising substantial capital for oil and gas expansion through general corporate purpose financing while also not being exposed to the same scrutiny as banks involved in asset-specific borrowing and bond underwriting,” the report says.

JP Morgan is singled out as the top direct financier, providing US$1.9bn to Amazon oil and gas activities from 2009. It is also the largest indirect financier, approving nearly US$19bn in loans and bond underwriting to oil and gas companies with operations in the Amazonia region.

“The bank is a… major backer of global oil traders who have traded in Amazon oil in the last decade, providing an estimated US$5bn to traders such as Trafigura, PetroThailand , and Shell’s Western Supply & Trading division – all major movers of Amazon oil from Ecuador to the state of California”, the report says.

Gunvor tells GTR that it does not trade crude oil from the Amazon. Trafigura could not be reached for comment.

The research comes as scientists warn the Amazon is in a perilous state and deforestation must be halted if the rainforest, an important carbon sink and home to an estimated 10% of known living species, is to avoid a “tipping point” that would lead to the ecosystem transitioning into a savannah grassland.

“Leading scientists have found that, in order to avert crossing the point where the rainforest spontaneously starts to convert to savannah, 75 to 80% of Amazonia must remain intact,” Stand.earth says. “As of 2023, 74% of the Amazon remains intact… with 6% in a restorable state of degradation.”