Major banks around the world are still financing trillion dollar fossil fuel companies.
A new report, published on Wednesday by a collection of climate organizations and titled Banking on Climate Chaos 2021, reveals that 60 of the world’s largest commercial and investment banks have collectively invested $ 3.8 trillion in fossil fuels from 2016 to 2020 , the five after the Paris Agreement was signed.
“This report serves as a reality check for banks that think vague ‘net’ targets are enough to stop the climate crisis,” said Lorne Stockman, senior research analyst at Oil Change International, one of the organizations that wrote the report, in statement released with the report. “Our future goes where the money flows, and in 2020, these banks invested billions to trap us in even greater climate chaos.”
On an annual basis, total fossil fuel financing fell 9% in 2020. But the report attributes this to demand constraints related to Covid-19.
The report also found that “fossil fuel financing … from the world’s 60 largest commercial and investment banks was higher in 2020 than in 2016”, the first full year in which Paris climate compliance took effect. It is important to note that President Donald Trump withdrew from the international agreement in 2017. President Joe Biden re-joined the Paris Agreement on his first day in office.
The three banks that financed the most fossil fuels in 2020, according to the report, were JPMorgan Chase, with $ 51.3 billion; Citi at $ 48.4 billion; and Bank of America with $ 42.1 billion.
A JPMorgan Chase representative told CNBC Make It that the bank could not comment on a third party report. But the bank directed CNBC Make It to its climate change initiatives, including “adopting a financing commitment in line with the Paris Agreement goals” and facilitating $ 200 billion in clean and sustainable financing by 2025.
Citi directed CNBC Make It to a blog post published on Tuesday by Val Smith, the bank’s director of sustainability. In the post, Citi said it will work with existing fossil fuel bank customers to make the transition first to a public greenhouse gas emissions report and then to a phasing out of financing offered to companies that do not comply. carbon reduction standards.
“As the most global bank in the world, we recognize that we are connected to many carbon-intensive sectors that have driven global economic development for decades,” wrote Smith. “Our work to achieve zero net emissions by 2050, therefore, makes it imperative that we work with our customers, including our fossil fuel customers, to help them and the energy systems we all depend on to make the transition to a zero net economy. . “
Bank of America did not immediately respond to CNBC Make It’s request for comment.
The Banking on Climate Chaos 2021 report comes at a time when the indicators show that global economies are not on track to meet the emission reductions established as part of the Paris Agreement in 2015.
The 2020 report is the 12th annual, although the scope of the report expanded at that time. The report was a collaboration of seven non-profit organizations: Rainforest Action Network, Bank Track, Indigenous Environmental Network, Oil Change International, Reclaim Finance and Sierra Club.
The report’s authors aggregate bank loan and underwriting data using Bloomberg’s league credit methodology, which means that credit is split between banks that play a leading role in a given transaction and uses data from Bloomberg Finance LP and from the Global Coal Output List.
In addition, banks have the opportunity to express an opinion on the findings. “The conclusions of the preliminary report are shared with banks in advance, and they have an opportunity to comment on financing and policy assessments,” says the report.
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