The conversion of natural ecosystems, like forests, drives climate change and biodiversity loss, which, collectively: undermine ecosystem benefits critical to agriculture and global food security; increase the risk of pandemics, like COVID-19; and impinge on advances in medicine. According to the IPCC, agriculture, forestry, and other land use change is responsible for 23 percent of total net anthropogenic GHG emissions. Meeting the goals of the Paris Agreement necessitate ending deforestation.

In 2020, the UN Food and Agriculture Organization declared that deforestation and forest degradation are taking place at "alarming rates." 420,000,000 hectares of forest, an area larger than India, have been cleared since 1990. Agricultural expansion is the main driver of deforestation and associated biodiversity loss. Banks remain major funders of companies directly or indirectly fueling deforestation and land degradation.

Chase recognizes the need to address ecosystem conversion. In 2017, Chase joined the Soft Commodities Compact, committing to help achieve zero net deforestation by 2020 through its financing of forest-risk commodities, including by verifying that clients' operations aligned with that goal.

However, Chase's policies fall short of comprehensively addressing ecosystem conversion and biodiversity loss across its portfolios. In contrast to peers, Chase lacks policies that prohibit clearance in high conservation value areas, high carbon stock forests, or critical habitats. Chase lacks policies for key forest-risk commodities, like cattle, cocoa, and sugar. Plans to address deforestation, agriculture, and other ecosystem conversion are also notably absent from Chase's climate commitment.

Chase has considerable exposure to the sectors and companies that drive deforestation and biodiversity loss. Chase has over USD160 billion, or over 6 percent of total assets, in loans and underwriting linked to biodiversity impact risk. Chase was identified as the fourth largest financier of commodities driving tropical deforestation since 2016.

Furthermore, Chase provides little disclosure on the forest and biodiversity impacts of its portfolios. Deforestation and agriculture are not covered in Chase's 2019 ESG report. Chase has not reported its progress on aligning its financing with zero net deforestation goals since 2017.

Chase's insufficient action on deforestation has caught the attention of U.S. lawmakers and NGOs. In 2019, eight senators told Chase that addressing risks from deforestation were in line with the company's fiduciary responsibility. In 2020, two organizations launched campaigns against Chase over its contributions to deforestation. Chase has received negative media attention for its ties to companies driving deforestation and biodiversity loss.