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Contribution short abstract

Intact forests like the Amazon face threats from agricultural expansion. From 2014–2023, firms driving land-use change in Brazil received ~US$450 billion. This study links TNCs’ FDI, profit repatriation, and soy‑related deforestation, showing 60% of profits flow to Europe, mainly via the Netherlands

Contribution long abstract

Intact forests are vital for biodiversity, yet large ecosystems like the Amazon are increasingly threatened by agricultural expansion. Between 2014 and 2023, agriculture firms linked to land-use change in the Brazilian Amazon received about US $450 billion in financial flows. Concerns about systemic financial risk from biodiversity loss have spurred efforts to green the financial system. However, recent studies argue that achieving this goal requires addressing global economic imbalances, particularly those arising from profit repatriation. Such capital outflows pose systemic risks to emerging economies like Brazil and hinder sustainable financial transformation. Between 2005 and 2020, Transnational Corporations (TNCs) repatriated an annual average of US $1 trillion globally—equivalent to 4.2% of global FDI stock and 1.4% of world GDP. In many resource-exporting countries, repatriated profits exceed inbound FDI stocks, compounding financial vulnerabilities.

This study examines how TNCs’ profit repatriation and FDI holdings shape Brazil’s financial exposure and environmental outcomes. We analyze links between TNCs’ FDI in the soy sector, profit repatriations, and soy-driven land-use changes. Financial data from the Brazilian Central Bank and corporate balance sheets are integrated with subnational supply-use accounts and the FABIO model to quantify biodiversity impacts. Results reveal that nearly 60% of profits repatriated from Brazil flow to Europe, with the Netherlands and Luxembourg accounting for about half. By connecting financial and ecological data, this study highlights the structural feedback between global finance and deforestation, underscoring the need to move from risk management toward coordinated, multilateral risk governance for sustainability.