The Banks Funding Fossil Fuels
According to a new report, several top American banks increased their stake in the fossil fuel industry in 2017. Here’s how to hold them accountable.
At a time when many countries, institutions, cities, and citizens are recognizing their global responsibility to cut back on the carbon emissions irreversibly damaging our planet, our banks are failing to take responsibility for their own part in climate change.
According to research from the ninth annual Banking On Climate Change, an international finance report researched by leading environmental organizations*, financing for extreme fossil fuels (those dirtier, more dangerous and higher-polluting than standard fossil fuels, like tar sands and coal) increased to $115 billion in 2017. The $11 billion increase in bank financing from last year for such industries is especially disappointing considering there was a $22 billion decrease the year before.
The rise was largely due to a financial injection of $98 billion by banks into the tar sands sector – a 111% increase from the previous year. The tar sand industry commonly uses surface mining to extract bitumen, which is refined into gasoline. According to the Union of Concerned Scientists, a gallon of gasoline made from tar sands produces about 15% more carbon dioxide emissions on a lifetime basis than one made from conventional oil.
While JP Morgan Chase lists sustainability goals on its website, the bank was one of the biggest backers of tar oil in 2017 and increased their extreme fossil fuel financing overall by $4 billion last year. Another US bank falling behind on environmental responsibility was Goldman Sachs, one of the biggest western backers of coal mining in 2017. Last year, the bank increased their extreme fossil fuel financing by $1.2 billion.
While other US banks Citigroup, Bank of America and Morgan Stanley saw their fossil fuel investments diminish in 2017, they still ranked in the top 15 banks financing extreme fossil fuels with their collective financing exceeding $10 billion. Meanwhile, Wells Fargo ranked at 24 after the bank increased its fossil fuel financing in 2017 from $1.56 billion to $1.71 billion.
Sadly, extreme fossil fuel funding continues to have climate, environmental, and human rights impacts. At a time when it is essential to limit climate change to 1.5 degrees Celsius, the report concludes that banks urgently need to recognize and act on the contradiction between their sustainability policies and funding patterns.
“Most fossil fuel companies don’t have the billions of cash it takes to reach, produce, and transport fossil fuels without the support of big banks,” it states. Simply put, banks hold the purse strings to make or break the world’s commitment to climate change solutions.
For this very reason, OpenInvest is determined to hold big banks accountable. Our fossil fuels screen divests clients from the top climate polluters moving your cash away from their earth-damaging investments. As an investor, you have a special power to call out these banks, share your opinion, and divest to send a clear message to management. Your finances are your most powerful tool to shape the world.
*Banking On Climate Change was compiled by the Rainforest Action Network, Banktrack, Sierra Club, Oil Change International, Indigenous Environmental Network and Honor Earth.