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Greenpeace International Loses $5.2M on Bad Currency Exchange Bet

Published 01/30/2015

Greenpeace International (GPI) issued a full apology in June 2014 for "the series of errors" that led to $5.2 million in losses from misjudged foreign currency exchange contracts. The losses resulted from "a serious error of judgment" by an employee in Greenpeace's International Finance Unit that acted "beyond the limits of [his] authority and without following proper procedures," according to a statement by GPI. No evidence of personal gain by the employee has been found, and although Greenpeace has fired him, it believes the employee was acting in the best interest of the organization.

As a global organization, GPI is active in more than 40 countries and is funded with many different currencies. Part of GPI's role is to transfer funds raised across the world to the countries where the projects are being run, which means dealing with many different currencies that are subject to rapid fluctuations in value. GPI carries this currency valuation risk on behalf of the Greenpeace country offices so that they can concentrate on running their environmental campaigns. In 2013, when the bad currency exchange bet was made, Greenpeace UK noted that GPI carried out transactions in 14 different currencies. Foreign currency contracts entered into with the intent to protect GPI from anticipated declines in the value of the Euro resulted in the $5.2 million in losses when the Euro instead strengthened significantly in the last quarter of 2013.

GPI's statement addressing the foreign currency exchange losses noted that the Board ordered a complete independent audit to determine how the incident happened and to improve internal procedures so that such a mistake can't happen again. GPI also said that it "will make adjustments for these losses in the coming two or three years by amending planned infrastructure investments" and that money will not be taken from frontline environmental campaigning. The GPI financial statements show a 2013 budget deficit of approximately $9.4 million, which includes the losses from the bad currency contracts. GPI is fortunate in that it had a suitable level of reserves available in case of unexpected shortfalls, and these funds were used to cover part of the currency exchange loss, according to two Board Chairs from Greenpeace, Inc. and GPI. GPI's financial statements do reflect an available fund balance, net of property and equipment, of approximately $12.6 million at year end 2013. The Board Chairs also said that "it is important to note that the financial loss at Greenpeace International has absolutely no impact on the financial stability of Greenpeace USA or any other national and regional office." Greenpeace USA (which includes Greenpeace, Inc. and Greenpeace Fund, Inc.) had approximately $10.5 million in net assets at the end of 2013.