- Brazilian paper pulp producer Suzano’s eucalyptus plantations are worsening drought conditions in the Brazilian Cerrado, a new report says, causing water scarcity and biodiversity loss, which are impacting local communities.
- Despite Suzano’s sustainability claims and ESG credentials, the company faces unresolved allegations of land grabbing and social conflicts with traditional communities.
- Suzano continues to expand its eucalyptus plantations, including a new factory adding 2.55 million metric tons of pulp capacity annually; conservationists warn this expansion increases wildfire risk and water stress in the Cerrado.
- The company’s high ESG ratings, in some cases based only on its self-reporting, have helped it secure billions of dollars in financing from major banks, which the report accuses of profiting from Suzano’s damaging activities.
Suzano, the world’s largest exporter of eucalyptus pulp, vigorously promotes an environmentally and socially responsible agenda: promising to slash carbon emissions, reduce poverty, and restore fragmented natural vegetation in its native Brazil.
However, conservationists have called these claims into question, saying that behind Suzano’s green image, the company’s expanding eucalyptus plantations are drying out the land and increasing wildfire risk in the Cerrado savanna, which is already experiencing record drought.
A report released in July by the Environmental Paper Network (EPN) says the high water consumption of eucalyptus monocultures — 30-60 liters (8-16 gallons) of water daily per tree — in the Cerrado is worsening drought conditions linked to climate change and extreme weather. The Cerrado savanna, covering an area larger than Mexico and crucial for regulating 40% of Brazil’s freshwater, is facing its worst drought in more than 700 years, according to a 2024 study.
The EPN report also says that many allegations against Suzano, reported by Mongabay in December 2021 — such as land grabbing, biodiversity loss, and social conflicts with traditional communities — remain unresolved.
In response to the report, Suzano has challenged the allegations.
Suzano told Mongabay that climate change is the main driver of drought and fire, and that “any area occupied by forest, whether natural or planted, has benefits arising from the forest ecosystem,” including reduced temperature extremes and maintained higher humidity levels. It also cited the important “role of the Brazilian planted tree industry in preserving areas of native vegetation.”
Eucalyptus is an alien species to Brazil, being native to western Australia. Researchers have found that eucalyptus trees cause “dramatic reduction of biodiversity” and “prevent the growth of roots of other plant species” when planted in nonnative ecosystems, where local species haven’t had a chance to evolve to the chemical substances in the trees’ leaves.
Since Mongabay’s last report, Suzano has expanded its land holdings by 400,000 hectares (nearly 990,000 acres), for a total of 2.7 million hectares (6.7 million acres) across seven Brazilian states. Nearly two-thirds of this area is dedicated to eucalyptus monocultures, while 1.1 million hectares (2.7 million acres) are conserved in compliance with Brazil’s Forest Code. The company’s operations are significant in the Cerrado region, featuring extensive eucalyptus plantations and production facilities.
“Eucalyptus is very problematic,” Sergio Baffoni, an EPN campaigner, told Mongabay. “In a time when we are facing climate change and the El Niño phenomenon, planting something that [doesn’t help retain water] and instead makes everything dry is not very responsible. Climate change is happening, but normally people try to mitigate it instead of accelerating it.”
Expanding eucalyptus in the Cerrado
In July, Suzano announced the opening of a new factory in the municipality of Ribas do Rio Pardo, in the state of Mato Grosso do Sul. Named the Cerrado Project after the surrounding biome, it’s the world’s largest single-line pulp plant, increasing Suzano’s production capacity by 20% with an additional 2.55 million metric tons of eucalyptus pulp annually. The project was funded by a $750 million loan, with the World Bank’s International Finance Corporation contributing $250 million and the remainder coming from other banks.
More than 40 environmental groups sent a letter to the IFC in 2022 to warn about Suzano’s environmental and social impacts and to urge the lender to reject the loan application; however, the IFC approved it.
Suzano said in a statement that the new plant doesn’t contribute to the Cerrado’s environmental emergency and that it demonstrates the company’s “commitment to people and the planet.” It highlighted the facility’s use of biomass gasification in its kilns instead of fossil fuels. At the same time, the company announced a partnership with the IFC to reconnect 35,000 hectares (86,500 acres) of fragmented native vegetation in the Cerrado. These ecological corridors promise to protect biodiversity and restore part of the biome.
The initiative is part of the company’s goal of connecting 500,000 hectares (123,600 acres) by 2030. According to Suzano’s statement to Mongabay, “the corridors were planned to contain both native vegetation and agroforestry systems with and without the presence of eucalyptus.”
Mato Grosso do Sul has one of the highest concentrations of eucalyptus plantations in Brazil. particularly in the east of the state. Between 2010 and 2019, the plantation area expanded by 197%, from 378,195 to 1.12 million hectares (934,500 to 2.78 million acres). According to local accounts in a 2022 study, the arrival of eucalyptus came with the loss of biodiversity and water, primarily in the municipality of Três Lagoas, where Suzano has another plant and plantations.
One local told the researchers in 2020 that “the rivers dried up. The waterfall disappeared. There was almost a lagoon near the bridge, but now there is no water at all.”
Suzano sought to expand its operations in the Baixo Parnaíba region in the east of Maranhão state, before selling its plantations to soybean farmers and focusing on its expansion in Mato Grosso do Sul, conservationists in the region told Mongabay. Although this process began in 2005, the communities in the region continue to “suffer a lot from drought here in our region because of the impact of Suzano,” Raimunda Nonata da Silva from the Cocalinho community in eastern Maranhão told Mongabay.
“The dams and streams dried up because they took water from the dams with water trucks and ended up watering the crops, watering the roads,” said Silva, whose community, a Quilombo, is made up of Afro-Brazilian descendants of formerly enslaved people. “We don’t have fish anymore because [the reservoirs] dried up, everything is gone. It went five years without water.”
Suzano vowed to increase water availability in all 44 of the critical river basins that the company operates in by 2030. According to data on its website, it achieved this for only 8.7% of critical river basins as of last year.
Increase in wildfires
The Cerrado has seen its highest number of fire outbreaks this year since records began in 1988. As of June 25, the number of fires increased by 30% from the same period last year, 12,155, according to Brazil’s space agency, INPE. The worst-affected states were Maranhão, Tocantins, Piauí and Bahia, which together are known as Matopiba, the main hub for Brazil’s agricultural activities, mainly livestock ranching and soybean cultivation.
In 2022, Suzano’s Maranhão and Bahia operations were affected by fires, with the number of fires increasing by 50.8% and 63.8% respectively from the previous year. The worst-hit state was Espírito Santo, with 5,750 fires in 2022, up 69.4% from the year before. Suzano said that despite the higher number of fires, the area affected was significantly reduced thanks to efforts from firefighters, including its own fire brigade.
According to the EPN report, “the risk of devastating fires will continue to grow as long as eucalyptus plantations expand.” It says eucalyptus bark has morphological characteristics that allow it to send embers up to several kilometers in the wind, greatly increasing fire risk.
“The increasing impacts of climate change would suggest avoiding expanding on wide-scale crops that contribute to water stress and increase fire risk,” the report concludes.
Rewards for sustainability
Alongside local reports of biodiversity loss and water availability reduction with the arrival of eucalyptus, Suzano is facing 295 possible civil and environmental proceedings, according to the EPN report. The proceedings include cases involving unsafe working conditions and discrepancies in pay, as well as lawsuits over land disputes, environmental harm, and contract disagreements. Some cases argue that Suzano’s activities have damaged the environment, especially in Maranhão, where authorities question whether the proper licenses were obtained. There are also two significant cases where the Federal Prosecution Service argues that the wrong agency gave Suzano permission to operate in Maranhão. If Suzano loses, it might have to stop work and fix any damage before being allowed to continue.
Yet its stated focus on environmental sustainability and social responsibility has persuaded some organizations to rank Suzano highly in environmental, social and governance (ESG) ratings.
Among its list of awards in 2023, Suzano got the highest level of recognition in the EcoVadis rating, which had also granted it the gold seal in its 2022 Sustainability Ratings. Environmental Finance named it “Large Enterprise of the Year, global,” and the Carbon Disclosure Project (CDP) presents Suzano as a renewable-based company, although this is based on self-reporting.
It’s this success in its ESG performance that has helped Suzano receive billions of dollars in “green financing,” the EPN report says, which constitutes 39% of the company’s total debt. Between 2016 and 2023, Suzano received $25 billion in credit from big financial institutions, including BNP Paribas, JPMorgan Chase, Rabobank, Mizuho Financial and Bank of America. Blackrock is the biggest investor in Suzano, with $488 million, followed by Vanguard with $278 million invested.
French lender BNP Paribas, Suzano’s top creditor between 2014 and 2023, was previously criticized by several social advocacy organizations for financing Brazilian beef producer Marfrig that was accused of illegal deforestation, Indigenous land rights violations, and slave labor.
Suzano’s creditors and investors haven’t publicly responded to the EPN report.
JP Morgan Chase and Mizuho Americas declined to comment when contacted by Mongabay. Rabobank Brasil said in a statement to Mongabay that it can’t comment on specific cases but ensures its client analysis complies with Brazilian environmental laws and regulations. BNP Paribas claimed in a statement to Mongabay that its green financing adheres to strict ESG policies and supports a sustainable wood pulp industry but did not comment specifically on Suzano. The other banks did not respond to Mongabay’s request for comment.
EPN has called for investigations of the allegations against Suzano, especially by the banks financing it: “By choosing to continue to support Suzano, both the private and public banks are now willingly profiting from the severe social and environmental impacts of the company.”
Citations:
Dubos-Raoul, M. & de Almeida, R. A. (2022). The arrival of eucalyptus in the municipality of Três Lagoas (MS) in the perception of the residents of the rural communities of Arapuá and Garcias: Between subjection and territorial resistance. Revista NERA, 25(64). Retrieved from https://revista.fct.unesp.br/index.php/nera/article/view/8625
Stríkis, N. M., Buarque, P. F. S. M., Cruz, F. W., Bernal, J. P., Vuille, M., Tejedor, E., … Novello, V. F. (2024). Modern anthropogenic drought in Central Brazil unprecedented during last 700 years. Nature Communications, 15, 1728. doi:10.1038/s41467-024-45469-8
Banner image: < style=”font-weight: 400;”>A eucalyptus plantation next to the rainforest in the state of Pará in the north of Brazil. Some researchers have called such monocultures “biological deserts” due to the lack of biodiversity found there. Image © Daniel Beltrá/Greenpeace.
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