On Wednesday Friends of the Earth Europe and Friends of the Earth France challenged BNP Paribas (BNPP)–a major player in global agricultural and energy markets, offering many funds and commodity-related investment instruments–over its role in food speculation and global hunger.
FOE challenged BNNP at its annual shareholder meeting in Paris. They told BNNP that given the severity of food crises around the world and the growing body of evidence that links excessive financial speculation to inflated food prices, BNNP should follow other European Banks like Nordea, and Germany’s Deutsche bank and Dekabank, who are beginning to phase out investments in agricultural commodities, and follow the precautionary principle.
BNPP is one of the most active banks dealing in commodity derivatives trading, with more than €700 million (almost $900 million) exposed to agricultural commodities and livestock at the end of 2011. FOE asked them to phase out products linked to agricultural commodity derivatives:
UPDATE: In response to the question asked by Friends of the Earth France, the board of BNP Paribas equivocated over their involvement in food speculation, choosing to ignore the fact that retailing financial products that have been shown to be harmful – such as the 700 million Euros exposed to soft commodities and livestock through open ended funds (exchange traded funds and “through derivatives on various commodity indices”) – plays a huge role in excessive and dangerous food speculation. This is very different [than] the traditional hedging of price risks that they tried to imply it was.
BNP Paribas’ response was a deliberate obfuscation around offering harmful products, denying that the food price hikes and volatility associated with the massive growth in speculative positions on agricultural commodity derivatives markets have anything to do with them. It was made clear today that BNP Paribas is a long way from being the “bank for a changing world” that it claims to be.
Read the full article here.
Read coverage of other banks and products linked to agricultural commodity derivatives here.