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Chapter 3
Behind the green curtain, biodiversity is being destroyed
In the previous chapters, we saw how in 2018 Michelin used green bonds to finance the rubber plantations of its new Indonesian partner Royal Lestari Utama (RLU) in the Indonesian province of Jambi, on the island of Sumatra. The bonds, designed to support sustainable projects and marketed by BNP Paribas, were issued by the new sustainable-finance platform Tropical Landscapes Finance Facility (TLFF). They were also endorsed by a number of third parties who were found to have based their assessments solely on documents.
Michelin and its partners also ignored warnings from grassroots organisations about the industrial-scale deforestation previously carried out by RLU's local subsidiary.
👉 All the articles from our investigation are available here.
In order not to jeopardise the success of a model project, Michelin and the founders of the TLFF failed to communicate these facts to potential investors, who might have been less enthusiastic if they had known about them. We will now look at how all this was possible – and why it should not have been, given the rules of green finance and the situation on the ground in Sumatra.
It was the "visa" granted in January 2018 by the ethical-investment ratings agency Vigeo Eiris, certifying compliance with the principles of the International Capital Market Association (ICMA), that allowed TLFF bonds to be registered in the database of Climate Bonds Initiative. CBI is the world's leading certifier of climate fundraising, and Vigeo Eiris is a CBI-approved auditor.
