In the Red 2020

An assessment of financial institution policies for financing pulp and paper

EPN has evaluated the policies of 68 major financiers of the pulp and paper industry against 14 absolute minimum criteria that all financial institutions should require their clients, investments and business partners to respect in order to reduce social and environmental risks. These “Red Lines” are fully described in the Green Paper, Red Lines, report, which is a translation of EPN’s Global Paper Vision for use by financiers. They include a requirement for legality, a requirement to exclude any deforestation and forest degradation, and a requirement to respect customary land rights.


Snapshot of the score table. For more detailed information, see the overview table of the In the Red scores.

The assessment found that most red lines are still very poorly protected by financial institutions. On average, only 6% of the banks scored “well protected” for a red line criteria. The highest scores were obtained for the Red Line requiring legality and respect for human rights, for which 22% and 26% respectively, scored “well protected.” The worst scores were obtained for the red lines requiring a full Environmental Impact Assessment and the one requiring no introduction of high-risk species (which includes genetically engineered trees). None of the financial institutions scored “well protected” for these criteria.

However, compared to the first assessment, In the Red, which was published in 2017, there are also some improvements. A main improvement was recorded for the “respect indigenous rights and customary land rights” red line criteria. Whereas in 2017 no financial institution scored “well protected” for this red line,  the same selection of financial institutions has now 7% scores “well protected.” The requirement to respect human rights also scored better, going from 7% to 30% scoring a ‘well protected” and the requirement to exclude any deforestation and forest degradation went form none to 5% of “well protected scores.” However, some caution should be taken in comparing the results. Due to some methodological adjustments to increase coherence, some scores changed, even though the policies did not change. This is for example the case of the Chinese Green Credit Guidelines, on which many policies of Chinese financial institutions are based, thus impacting the scores of those individual institutions as well. For more information, please read the methodology.


Although the 68 assessed financial institutions widely vary in their scores on each Red Line, none of them has policies that fully protect the Red Lines. This is extremely worrying because the Red Lines form the minimum requirements for pulp and paper companies to avoid social and/or environmental harm. As stated in Green Paper, Red Lines, ‘Companies that do not cross these Red Lines are not automatically deemed to be operating in a sustainable manner. However, companies that do cross these Red Lines, and financiers providing support to them, are highly likely to be the target of campaigns by civil society organisations.’

We therefore recommend that each financial institutions should:

  • If it has not already done so, create and make publicly available a full investment policy framework for the pulp and paper sector;
  • Examine EPN’s assessment of its policy and improve it where necessary, to make sure of avoiding becoming financially involved in any companies or projects that breach the Red Lines;
  • Have consultation meetings with concerned groups in the process of policy formation;
  • Maintain open communication with civil society organisations and community groups;
  • Publish policy through a range of media; and
  • Ensure that all policies are implemented through adequate due diligence procedures.

The Green Paper, Red Lines is a document strongly supported by more than 150 civil society organisations worldwide. We hope that the finance sector will use it to work with us to move the pulp and paper industry towards a sustainable future.

For more detailed information on the policies and the scores of each financial institution, see the overview table of the In the Red scores.

For more information about the sustainability commitments and the dodgy deals financed by banks, please visit the BankTrack website.


If you have any questions and/or if you have any comments regarding the assessment of your financial institution, please contact us here. We are happy to update the scores in case of any policy changes.