Major western banks continue to pour hundreds of billions of dollars into fossil fuels and are driving climate change with their investments, argues a new report from a group of environmental organisations.
Major banks in the west continue to finance fossil fuels — and are completely undermining the Paris Climate Agreement in the process, finds a report produced by the Dutch organisation BankTrack together with Rainforest Action Network, Sierra Club and Oil Change International. The seventh annual report “Shorting the Climate: Fossil Fuel Finance Report Card 2016” looks at 25 US, European and Canadian banks and their bank policies and exposure in fossil fuels.
The report found that in the past three years alone, these banks have invested USD 42.39 billion in companies active in coal mining. The biggest investor in this area is Deutsche Bank, with investments of USD 6.73 billion. It was followed by Goldman Sachs and Bank of America, with USD 5.67 billion and USD 3.92 billion respectively.
In that same period of time, USD 154 billion was poured into the 20 largest coal-fired power producers. Citigroup was the top investor with USD 24.06 billion, followed by Barclays (USD 13.44 billion) and JPMorgan Chase (USD 13.41 billion).
If these investments continue at that rate and size, it will be impossible already by the end of 2017 to achieve the target set in Paris to limit global temperature rise to 2 degrees Celsius, concludes the report.
This is clearly the case when it comes to investments in so-called extreme fossil fuels, what BankTrack calls “the most carbon intensive, financially risky, and environmentally destructive sub-sectors”: tar sands, Arctic oil and ultra-deep drilling. Banks have invested over USD 306 billion in companies that drill extreme oil. JPMorgan Chase was the biggest financier at USD 37.77 billion, followed by Royal Bank of Canada with USD 33.97 billion and Barclays at USD 26.49 billion.
According to Yann Louvel of BankTrack, many banks announced they would move away from coal in the run up to COP21, but this related mostly only to coal mining. “None of these banks can claim to support the Paris agreement, to be aligned with the 2 degree scenario or to be fighting climate change – as we too often read in their sustainability reports – if they continue to finance these destructive sectors.”
All of the banks performed poorly in all sectors, including human rights policies. The average grade was D, indicating that the vast majority of banks have no meaningful policies in place to stop funding fossil fuels.
Image credit: Kris Krüg, flickr/Creative Commons