FMO must stop its investment in harmful industrial tree plantations

SOMO has joined over 76 organisations to expose the Dutch Development Bank (FMO)’s plans to increase its investments in harmful industrial plantations, which are often also used as “carbon sinks” to supposedly compensate companies’ pollution.

Despite the “green” propaganda used by the plantations and offset industries, these monocultures grab vast areas(opens in new window) of land, pollute(opens in new window) water and soils, create food insecurity(opens in new window) , and destroy biodiversity, all while imposing violence(opens in new window) . Plantations of mostly exotic fast-growing trees have devastated forests, ecosystems and neighbouring communities since colonial times(opens in new window) .

FMO has a responsibility to prevent human rights violations and environmental destruction and, therefore, must stop supporting industrial tree plantations.

Despite the flawed premise that tree plantations can offset the emissions from burning fossil fuels, the number of plantation-based offset projects has more than doubled(opens in new window) since 2021. These projects have not only increased in number but also in scale. The majority of these projects(opens in new window) are established in the Global South, where companies can get large areas of land, and the expansion is largely Northern-driven.

The disastrous consequences(opens in new window) of these “carbon sinks” will only intensify if the industry continues to expand. Yet, this is exactly what would happen if investments such as the one proposed by FMO are approved. Investors plan to have a high return from these deals. Communities, on the other hand, will be the least to benefit from having their lands occupied by tree plantations.

This statement calls upon FMO and the Dutch Ministry of Foreign Affairs to, among others:

• End all investments in industrial plantations both through direct and indirect financing;
• Stop using carbon offsets as an added-value excuse for investing in these destructive plantations.

Responsible and just forest and land management is possible, yet industrial tree plantations represent precisely the opposite. The financial sector and governments must support fair funding for community-led stewardship—free from restrictive contracts and ensuring local ownership. It is time to redirect investments into real and just climate action.