by Amy Lupica, ODP Contributing Writer

According to a new report, last year the world’s largest investment banks invested over $2.6 trillion in industries tied to the destruction of the natural world. The analysis found that 50 top investment banks provided financial services tied to extinctions and ecosystem destruction valued at more than Canada’s GDP. 

• The report, titled Bankrolling Extinction, was produced by portfolio.earth, a new initiative by environmental, finance, and economics experts to learn more about the finance industry’s impact on climate change. 

Why This Matters: Global extinction rates are at an all-time high. Up to one million species are at risk due to human activity. Some experts have predicted that the world is facing a mass extinction event, one of only six in the last 500 million years. 

• Researchers have identified rapidly warming temperatures as a key indicator of whether or not a species will go extinct.
• Researchers at the University of Arizona found that most species will not be able to migrate to cooler temperatures in time to avoid devastation

None of the banks assessed by portfolio.earth, including major players Bank of America, Citigroup, and JP Morgan Chase, have put sufficient systems in place to limit, or even evaluate, the ecological impact of their financial activities. The report concluded that “The financial sector is bankrolling the mass extinction crisis, while undermining human rights and indigenous sovereignty.”

The Evaluation: Banks provided financial services to many industries identified to drive biodiversity loss by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). Industries financed include “food, forestry, mining, fossil fuels, infrastructure, tourism and transport and logistics sectors.” In its Global Risks Report, biodiversity loss was considered a primary threat to business for the first time. Concerns listed in the report also include the potential collapse of food and health systems. 

Missed Deadlines: Some banks have begun to limit their investments into destructive industries, but an analysis by the Rainforest Action Network found that 35 leading banks haven’t aligned themselves with the goals of the Paris Agreement. 

• Almost every nation in the Paris Agreement is on pace to miss the February deadline to submit updated climate plans, and in the UK, a biodiversity report found that the country had failed 17 out of 20 UN biodiversity targets. 
• If governments don’t act fast to limit the destruction of industry and the financing of this destruction, hundreds of species could be lost within the next 80 years.

Big Change: Portfolio.earth is calling for banks to disclose and significantly reduce financial activities that harm the environment and divest from fossil fuels, deforestation, overfishing, and other ecological destruction. The initiative also calls on governments to write rules and regulations that will hold the financial industry accountable for any harm its activities cause to the environment. 

Prof Kai Chan of the Institute of Resources, Environment and Sustainability at the University of British Columbia explains that, currently, global banks sit at the center of a network of destruction, but with swift change, could find themselves at the center of a thriving sustainable economy.

“A global sustainable economy sits at the center of humanity’s much-needed transformation to meet the climate and ecological crises. And at the center of that sit the banks and the finance institutions whose investments power development around the globe,” he said. 

Experts have found that investing in industries with sustainable practices could save trillions of dollars and offer net savings to governments and investors. 

Chan dreams of a day where corporations and banks invest in projects that will be a net benefit to humans, the environment, and the economy. “Imagine a world in which projects can only raise capital when they have demonstrated that they will contribute meaningfully and positively to restoring the planet’s bounty and a safe climate for all? That’s the future this report envisions and builds toward,” he said.