Climate Change Alarmists Pressure Banks to Drop Fossil Fuel Financing
The Russian invasion of Ukraine and Joe Biden’s ongoing war on fossil fuels are jacking up oil prices, and now left-wing climate change activists are adding to high energy costs by pressuring banks to stop investing in fossil fuels in the name of stopping “climate change.” The pressure comes in the form of a report titled “Banking on Climate Chaos: Fossil Fuel Finance Report 2022,” which seeks to shame the banks into dropping oil, gas, and other fossil fuel energy resources. And the effort is backed by well-funded climate activists groups, including the Sierra Club and Oil Change International. A pumpjack extracts crude at an oil field with windmills in distance. (AP Photo/Martin Meissner) The executive summary of the report lays out the radical agenda to end the production of reliable and affordable fossil fuels in the United States: Fossil fuel financing from the world’s 60 largest banks has reached USD $4.6 trillion in the six years since the adoption of the Paris Agreement, with $742 billion in fossil fuel financing in 2021 alone. This report examines commercial and investment bank financing for the fossil fuel industry — aggregating their leading roles in lending and underwriting debt and equity issuances — and finds that even in a year where net-zero commitments were all the rage, the financial sector continued its business-as-usual driving of climate chaos. Fossil fuel financing plateaued last year, amid a lagging recovery from the COVID-19 pandemic — yet at levels still higher than in 2016, the first year after the Paris Agreement was adopted.
These findings underscore the need for banks to immediately implement policies that end their financing for fossil fuel expansion and begin to zero out their support altogether. Overall fossil fuel financing remains dominated by four U.S. banks — JPMorgan Chase, Citi, Wells Fargo, and Bank of America — who together account for one quarter of all fossil fuel financing identified over the last six years. RBC is Canada’s worst banker of fossil fuels, with Barclays as the worst in Europe and MUFG as the worst in Japan.
These banks may tout their commitments to helping their clients transition, and yet the 60 banks profiled in this report funneled $185.5 billion just last year into the 100 companies doing the most to expand the fossil fuel sector, such as Saudi Aramco and ExxonMobil — even when carbon budgets make clear that we cannot afford any new coal, gas, or oil supply or infrastructure.
The gasoline price board is shown at a gas station in Menlo Park, Calif., March 21, 2022. (AP Photo/Jeff Chiu) Then, after demonizing fossil fuels and even hydraulic fracturing, which is responsible for the U.S. reaching energy independence for the first time in decades and, under the Trump administration, a net exporter of fossil fuels, the report offered a list of demands that banks must meet “to align their policies and practices with a world that limits global warming to 1.5°C and fully respects human rights, and Indigenous rights in particular”: • Prohibit all financing for all fossil fuel expansion projects and for all companies expanding fossil fuel extraction and infrastructure along the whole value chain. • Immediately begin zeroing out all financing for fossil fuel extraction, combustion, and infrastructure, on an explicit timeline that is aligned with limiting global warming to 1.5°C, starting with coal mining and coal power, as well as financing for existing projects and companies active in tar sands oil, Arctic oil and gas, offshore oil and gas, fracked oil and gas, and LNG. As part of this process, banks must require all fossil fuel clients to publish plans to zero out fossil fuel activity on a 1.5°C-aligned timeline. • Measure, disclose, and set targets to zero out the absolute climate impact of overall financing activities on a 1.5°C-aligned timeline, including short-, medium-, and long-term targets. Long- term climate impact commitments must be paired with immediate action on fossil fuels, the single largest source of financed emissions.
The final demand accuses banks of not respecting human rights, “particularly the rights of Indigenous Peoples, including their rights to their water and lands and the right to Free, Prior, and Informed Consent, as articulated in the U.N. Declaration on the Rights of Indigenous Peoples.” As Breitbart News reported, domestic oil supplies are already suffering and the efforts to damage and even destroy the domestic fossil fuel sector has been under way for years: U.S. crude-oil stockpiles plunged last week as a pick-up in refining was not matched by a pickup in extraction, which remains paralyzed due to pressure on banks and investors to cut off access to credit and capital for fossil fuel companies. Crude-oil inventories fell by 3.4 million barrels to 410 million barrels, according to data released Wednesday by the Energy Information Administration. That was a bigger drop than the 2.5 million decline forecast by analysts surveyed by Econoday.
The American left has campaigned for years to reduce the supply of oil, gas, and coal, especially by reducing domestic production through tightening financial conditions, raising the price of leases or curtailing leasing on federal lands, tax increases on fossil fuel companies, and thwarting the Keystone Pipeline.
These are referred to as “restrictive supply side” policies. Other activists groups credited in the report include the Rainforest Action Network Indigenous Environmental Network, Reclaim Finance, and urgewald. Follow Penny Starr on Twitter.
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References:
- https://www.banktrack.org/download/banking_on_climate_chaos_2022/2022_banking_on_climate_chaos.pdf
- https://media.breitbart.com/media/2022/03/russia-ukraine-war-energy-security-pumpjack-extracts-crude-at-an-oil-field-emlichheim-germany-march.png
- https://www.breitbart.com/economy/2022/03/30/u-s-crude-oil-inventories-plunge-and-prices-jump/
- https://www.breitbart.com/economy/2022/03/17/oil-prices-surge-higher-again/
