{"id":9919,"date":"2021-03-24T05:01:59","date_gmt":"2021-03-24T04:01:59","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?p=9919"},"modified":"2023-02-28T15:58:53","modified_gmt":"2023-02-28T14:58:53","slug":"exposed-banks-empty-promises-on-climate","status":"publish","type":"post","link":"https:\/\/reclaimfinance.org\/site\/en\/2021\/03\/24\/exposed-banks-empty-promises-on-climate\/","title":{"rendered":"Exposed: banks’ empty promises on climate"},"content":{"rendered":"

A<\/span><\/span>larming trends in glo<\/span><\/span>bal fossil fuel financing<\/span><\/span> have been revealed in the latest edition of an annual report on global fossil financing<\/span><\/span>. The report<\/span><\/span>, entitled <\/span><\/span>Banking on Climate Chaos 2021<\/u><\/span><\/span><\/a>, reveals that the world\u2019s 60 largest banks worldwide have pumped over $3.8 trillion into the fossil fuel industry since 2016, with financing levels <\/span><\/span>higher<\/span><\/span> in advance of the upcoming COP26 than at the time of the <\/span><\/span>Paris Agreement, contradicting the latter\u2019s <\/span><\/span>aim to limit global temperature rise to 1.5\u00b0 <\/span><\/span>Celsius.<\/span><\/span> <\/span><\/span><\/b><\/span><\/p>\n

The report, which this year expands its focus from 35 to 60 of the world\u2019s largest banks, <\/span>found that these <\/span>banks have poured a staggering $1.5 trillion into 100 top companies behind fossil fuel expansion projects – representing an alarming 10% increase in 2020 over the previous year<\/span><\/b>, even <\/span>amidst a pandemic-induced recession that resulted in an across-the-board reduction of fossil fuel financing of roughly 9%<\/span>. This includes companies behind highly controversial projects like the Line 3 tar sands oil pipeline, one of the report\u2019s 20 case studies.<\/span><\/p>\n

Banking on Climate Chaos<\/span><\/i> was authored by Rainforest Action Network, <\/span>BankTrack<\/span>, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club, and is endorsed by over 300 organizations from 50 countries around the world. <\/span><\/p>\n

US and French banks under fire<\/b><\/span><\/p>\n

U.S.-based banks continue to be the largest global drivers of emissions in 2020<\/span><\/b>, with JPMorgan Chase remaining the world\u2019s worst fossil bank. From 2016 through 2020, Chase\u2019s lending and underwriting activities have provided nearly $317 billion to fossil fuels.<\/span><\/p>\n

French banks, meanwhile,<\/span><\/b> shot up the polluters\u2019 leaderboard to become the fourth-largest home of fossil finance in 2020<\/span><\/b>, making a mockery<\/span> of Economy Minister Bruno Le Maire\u2019s ambition to make Paris \u2018the capital of green finance\u2019. Instead, <\/span>F<\/span>rench banks have even surpassed <\/span>their British <\/span>neighbors<\/span> to become Europe\u2019s biggest backers of oil, gas and coal in 2020.<\/span><\/p>\n

BNP Paribas provided $41 billion in fossil financing in 2020<\/span><\/b>, a huge 41% increase over its 2019 activity<\/span> powered largely by <\/span>significant<\/span> loans to supermajors<\/span>. This means <\/span>the biggest absolute increase in fossil financing last year came from BNP Paribas<\/span><\/b>, despite the bank\u2019s strong policy commitments restricting financing for unconventional oil and gas.<\/span> Chinese and Japanese banks\u2019 <\/span>fossil<\/span> fuel policies were also sorely lacking.<\/span><\/p>\n

This report names the largest funders of fossil fuels around the world, with JPMorgan Chase the worst overall, RBC the worst in Canada, Barclays the worst in the UK, BNP Paribas worst in the EU, MUFG worst in Japan and Bank of China worst in China.<\/span><\/p>\n

Hollowness of net zero commitments exposed<\/b> <\/span><\/p>\n

The report highlights the <\/span>growing gulf between banks\u2019 net-zero and Paris-aligned commitments, and the reality of their financing<\/span><\/b>. 17 of the 60 banks have recently pledged to achieve \u201cnet zero\u201d financed emissions. But our analysis shows that for many of the world\u2019s worst funders of fossil fuels, these plans so far are dangerously weak, half-baked, or vague. <\/span><\/p>\n

Banks\u2019 existing climate policy commitments are examined and found grossly insufficient. Recent high profile bank policies focus either on the distant and ill-defined goal of achieving \u2018net zero by 2050\u2019 or on restricting financing for unconventional fossil fuels. In general, existing bank policies are strongest with regards to restrictions for direct project-related financing. And yet, project-related financing made up only 5% of the total fossil fuel financing analyzed in this report.<\/span><\/p>\n

Sectoral Trends<\/b><\/span><\/p>\n

The report also spotlights<\/span> shifting trends in different fossil fuel sectors.<\/span> In more positive news, financing for tar sands continued a downward trend<\/span>, decreasing by 27% in 2020 to $16 billion. But the news was not positive elsewhere. Shockingly, <\/span>coal mining financing <\/span><\/b>actually increased<\/span><\/b> slightly in 2020<\/span><\/b> to $25.4 billion<\/span>;<\/span> t<\/span>his is 25% higher than in 2016.<\/span> Banks\u2019 financing for fracked oil and gas <\/span>actually fell<\/span> by 8% and remains dominated by US banks. <\/span>Top Wall Street banks also increased their corporate finance to oil and gas giants with major Arctic reserves.<\/span><\/p>\n

Worryingly, <\/span>b<\/span><\/b>ank finance for the 30 largest LNG companies was higher in 2020 than in any other year since the Paris Agreement, at $28.8 billion<\/span><\/b>, reflecting a misguided notion that gas serves as a transition fuel.<\/span><\/p>\n

What green finance should really mean<\/b><\/span><\/p>\n

No major oil and gas company has yet released a climate pledge or sustainability plan that meets the criteria for alignment with the Paris Agreement, and their bankers need to face this reality when making financing decisions. In place of distant, greenwashed targets, banks must adopt meaningful 2021 action plans to cut fossil fuel financing, ensure Free, Prior and Informed Consent and respect human rights. Banks need to replace empty net-zero promises with meaningful policies enacting zero tolerance for fossil fuel developers and focus on preventing impacts. <\/span><\/b><\/span><\/span><\/p>\n

In the leadup to COP26 in Glasgow and the Paris+5 \u2018stock taking\u2019 moment, it is also crucial that countries account for the role their banks play in driving emissions. In France, a Government which has boasted of its commitment to green finance should act and require banks to adopt exit policies for non-conventional oil and gas, instead of just asking. <\/span><\/b><\/span><\/span><\/p>\n<\/div>

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