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A new report, published Wednesday found that the world’s largest commercial and investment banks have altogether put $3.8 trillion into fossil fuels from 2016 to 2020. This report — a collaboration between the Rainforest Action Network, Bank Track, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club —found that fossil fuel financing has increased precipitously in the years since the Paris Agreement was signed.
Why This Matters: As the Guardian explained, 17 of the 60 banks assessed for this study had made net-zero by 2050 commitments, yet the report describes the pledges as “dangerously weak, half-baked, or vague”, arguing that action is needed today. And while some of the banks have policies against financig coal, almost two-thirds of funding is for oil and gas companies.
Meanwhile, CitiBank emphasized that the bank is planning to work with its fossil fuel banking clients to publicly report their greenhouse gas emissions and then gradually stop financing companies that don’t reduce their emissions.
But this report suggests that banks are the lifeline of fossil fuel companies and their capital ensures that fossil fuels won’t be left in the ground. Lorne Stockman, a Senior Research Analyst at Oil Change International, one of the organizations authoring the report, said: “This report serves as a reality check for banks that think that vague ‘net-zero’ goals are enough to stop the climate crisis. Our future goes where the money flows, and in 2020 these banks have ploughed billions into locking us into further climate chaos.”
Changing Green Finance: While banks have continued to support fossil fuel companies, investors overall want better disclosure of climate risks from public companies–a shared goal of the Biden administration. Yesterday it was announced that the Federal Reserve is creating a “Financial Stability Climate Committee” (FSCC) to “identify, assess, and address climate-related risks to financial stability.”
by Ashira Morris, ODP Staff Writer China is often criticized for funding fossil fuel power infrastructure beyond its borders, and rightly so: it’s the top financier of overseas power plants, especially coal-fired ones. But they’re not the only ones continuing to finance coal and gas projects overseas. The US and Japan are a close second […]
This past May, President Biden signed an executive order on climate-related financial risk, a cross-governmental plan that directs federal agencies to identify and mitigate financial risks presented by climate change to Americans, businesses, and the government itself. Progress on this order was made over the weekend when Treasury Secretary Janet Yellen announced that the Financial Stability […]
Why This Matters: Money talks. Investors are increasingly willing to walk away from deals like oil and gas drilling projects in the Arctic or investments in fossil fuel companies that refuse to change their business models.
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