Areas

Profundo participates in the Forests & Finance coalition of civil society organisations from tropical forest countries and abroad, who are collaborating to convince financial institutions to use their financial leverage over forest-risk sectors by adopting and implementing strict ESG policies and due diligence systems. Based on Profundo research, the Forests & Finance website offers a database on the finance received by over 300 companies directly involved in the beef, palm oil, pulp and paper, rubber, soy and timber supply chains, whose operations may impact natural tropical forests. Additionally, Forests & Finance provides a rigorous assessment of the credit and investment policies of the 100 largest financiers found in our financial research.

Plastics are exacerbating the climate crisis, as 99% of this once-so-lauded material is made of fossil fuels. Most of the plastic products are burned after a short (often single-use) product life, releasing greenhouse gas emissions into the atmosphere. The production and disposal of plastics also has negative impacts on nature and biodiversity and on the health of consumers and local communities living near production facilities. Profundo analyses which petrochemical companies, consumer goods companies and retailers play an important role in the plastics life cycle, and assesses their options to help reduce the production and consumption of plastics. To mobilise the leverage of the financial sector to solve the plastics problem, we identify the financiers of companies in different stages of the plastics life cycle and we assess their policies against international agreements on climate change, nature, health and against general Corporate Social Responsibility standards. Also, we analyse options for corporate actors and public bodies to address the plastics problem.

In our research projects, we document which companies are involved in violating the rights of local communities and who is financing their activities. We assess which financiers require the companies they finance to respect the rights of local communities to give or withhold Free, Prior and Informed Consent (FPIC) whenever they could be affected by planned operations. We critically analyse market initiatives such as carbon offsets as well as the policies of governments and development finance institutions (DFIs). And we explore which policies and market arrangements would protect the rights and livelihoods of communities across the world.

Threats to biological diversity in the ocean abound as commercially targeted species are overfished and fishing methods remain indiscriminate against non-targeted species. The shipping sector causes pollution and disturbance, and industrial, mining, energy and residential activities in coastal areas are also a cause of concern. The recent interest in deep seabed mining (DSM) poses a further threat, as it could have irreversible impacts on deep ocean ecosystems by altering the delicate balance between sediments, nutrients and living organisms. DSM is also likely to impact the carbon storage ability of the deep sea, which is the biggest carbon storage area on the planet. Profundo researches which companies are involved in the seafood supply chain, in shipping, deep seabed mining and in other activities which have negative impacts on the oceans. And we assess the policies of financial institutions which are relevant for the protection of this biome.

We analyse and benchmark responsible credit and investment policies of financial institutions from all over the world. These assessments are often using the Fair Finance Guide Methodology that we have developed together with civil society organisations from Africa, Asia, Europe and Latin America collaborating in Fair Finance International. This methodology is based on international standards and initiatives on a wide range of sustainability topics. We also develop bespoke methodologies to investigate what banks and investors from across the world are doing in practice to ensure that the companies they invest in or finance are living up to international standards, in terms of screening, engagement, voting and exclusion. And we look at financial regulations across the world which stimulate or require financial institutions to integrate sustainability criteria in financing and investment portfolios.

To stimulate a just energy transition, we research the corporate strategies of companies in crucial sectors (energy, transport, livestock and others), to estimate the climate damage they cause and the financial means they have to transition faster. We analyse financial flows to energy sources and technologies that contribute to the climate crisis or that offer solutions. This makes it possible to assess if financial institutions shift their financings in line with a 1.5 °C scenario and if the conditions they set for their investments in new energy sources ensure a just transition. Also, we evaluate how government policies hinder or encourage corporate and financial players to work towards a just energy transition.

With the Dutch trade union CNV Internationaal we collaborate on the Fair Work Monitor. We collect data directly from workers in the upstream stages of global supply chains - such as sugar, transition minerals, and garments - through easy-to-fill-out digital surveys that can be completed anonymously on tablets or phones. With this data, we can analyse and document working conditions, remuneration, and labour rights, comparing them against international standards set by the International Labour Organization (ILO) and living wage data. Local unions use these analyses in their collective negotiations with employers, while CNV and other international trade unions leverage this information to persuade (Dutch) companies in the downstream stages of the supply chains to facilitate improvements. Additionally, we conduct similar research projects on labour rights and working conditions across various sectors for other trade unions and civil society organisations.

Understanding the power dynamics and profit distributions in food supply chains is crucial to assess how food systems can be transformed in order to address all different challenges they are facing. Against this background we analyse government policies as well as voluntary certification schemes and procurement policies (such as NDPE policies) in global commodity supply chains. What different stakeholders can do to accelerate the transition from animal proteins (meat and dairy) towards plant-based proteins is one of our crucial areas of research.

More than ever, industrialized countries need fair, humane, and effective migration policies. We will continue to critically analyse the use of public funds to contribute to a more fair, humane and effective European migration policy and to achieve more transparency over public expenditure and public decision making. Also, our research investigates under which conditions migrants are exploited in agricultural commodity supply chains within Europe.

In the Mining & Money initiative, Profundo collaborates with civil society organisations to identify the role of financial institutions in driving the expansion of the mining sector, in particular driven by the demand for transition minerals. The Mining & Money website will create transparency on the financiers of mineral mining, their ESG policies and links to environmental and human rights abuses. Local civil society organisations (CSOs) working in Latin America, Africa and Asia on community and environmental issues can help to highlight the negative impacts of the mining industry. These organisations engage with their local financial institutions and collaborate with international NGOs engaging with financial institutions in North America and Europe, among others, to develop and implement strong ESG risk mitigation policies that ensure the protection local communities and environments.

To avoid that uncontrolled arms supplies exacerbate and prolong armed conflicts, the weapons sector needs to be brought under much stricter control of democratic governments. Simultaneously, the production and maintenance of controversial weapons (nuclear weapons, chemical weapons and cluster munition) needs to be finished. In our research, we focus especially on which arms companies are involved in controversial weapons and in irresponsible weapons supplies (for instance to undemocratic regimes). And we analyse which banks and investors play a role in enabling the activities of such companies, and which financial institutions have excluded such companies from financing.

The financial sector increasingly recognizes that stopping deforestation constitutes an important part of their climate change policies. Profundo, as part of the Chain Reaction Research (CRR) programme, supported this shift for the past 10 years by translating sustainability risks into material business risks, monitoring deforestation, shaping policy debates, and developing tools to leverage the role of financial institutions as shareholders and capital providers. While the CRR programme has stopped, we continue to use these same approaches and methodologies to produce in-depth sustainability and financial risk analyses on critical companies in deforestation-risk commodity supply chains.

We assess how corporate practices, including procurement policies, impact the position of women and other marginalised groups in global supply chains. Additionally, we analyse how financial institutions address these issues in their credit and investment policies. Our research always integrates a gender- and human rights-based approach, prioritising strategies that address inequalities in power distribution and discriminatory practices, with a particular focus on the most vulnerable populations.

In the complex and evolving movement towards sustainable market regulation and Corporate Social Responsibility (CSR) in the corporate and financial world, both private-sector and public policies play important and inter-linked roles. In the field of private-sector policies, we analyse and benchmark responsible credit and investment policies of financial institutions from all over the world, often using the Fair Finance Guide Methodology. We also analyse voluntary certification schemes and procurement policies (such as NDPE policies) in global commodity supply chains. The public policies of various governments which we analyse deal with market regulation, industrial policy and innovations in many different economic and commodity sectors.

Animal welfare issues are most prevalent in the intensive livestock farming sector, in which animals are kept in conditions that interfere with their ability to express their natural behaviour. Due to population growth and changing consumption patterns in emerging markets the worldwide demand for livestock products - meat, dairy products, eggs - is increasing rapidly. Further intensification of livestock production will almost certainly result in the suffering of even more animals. Other sectors in which animal welfare is often disrespected, are intensive aquaculture, the pharmaceutical and cosmetics industries making use of laboratory animals, the fashion and furniture industries using fur and exotic leather and the recreation and entertainment industry. We provide insights into who finances industries in which animal welfare is often disrespected, such as the intensive livestock farming sector where issues are most prevalent, as well as analysing the policies of financial institutions that have chosen to fund these sectors, sometimes contradicting their own commitments to animal welfare.

We research the tax planning structures set up by multinational enterprises and we assess how financial institutions deal with the tax avoidance practices of their clients and investees. Also, we look at government tax exemptions and subsidies to support large corporations, which in many cases lead to fossil subsidies. And we support proposals for more effective tax policies by assessing the amount of taxable income generated by certain companies and sectors.