WASHINGTON – Released today, the 12th edition of the most comprehensive report published to date on fossil fuel financing documents an alarming disconnect between the global scientific consensus on climate change and the continued business practices of the world’s largest financial institutions.
This year’s report, titled Banking on Climate Chaos 2021, expands its focus from 35 to 60 of the world’s largest banks and reveals that in the 5 years since the Paris Agreement was adopted, these banks have pumped over $3.8 trillion dollars into the fossil fuel industry. The report also concludes that even in the midst of a pandemic-induced recession fossil fuel financing was higher in 2020 than in 2016, a trend that stands in direct opposition to the paris Agreement’s stated goal of rapidly reducing carbon emissions to ensure an under 2°, as close as possible to 1.5° Celsius maximum global temperature rise.
The report also examines emerging climate policy commitments by banks on the distant and ill-defined goal of alignment with Paris Agreement objectives and achieving ‘net zero by 2050’ or on restricting financing for unconventional fossil fuels. The Report finds these trends grossly insufficient to reduce global warming and out of alignment with the goals of the Paris Agreement.
U.S.-based banks continue to be the largest global drivers of emissions in 2020, with JPMorgan Chase remaining the world’s worst fossil bank. Chase recently committed to align its financing with the Paris Agreement and yet continues essentially unrestrained financing of fossil fuels. From 2016 through 2020, Chase’s lending and underwriting activities have provided nearly $317 billion to fossil fuels, fully 33% more than Citi, the next worst fossil bank over this period.
A surprising result from the 2020 data is that BNP Paribas, (whose U.S. subsidiary is Bank of the West), came in as the fourth-worst fossil bank in 2020. BNP did $41 billion in fossil financing in 2020, a huge 41% increase over its 2019 activity – the biggest absolute increase in fossil financing.
These banks have poured nearly $1.5 trillion over the past 5 years into 100 top companies expanding fossil fuels. This includes companies behind highly controversial projects like the Line 3 tar sands oil pipeline and the expansion of fracking on the land of Indigenous Mapuche communities in Argentina’s Patagonia region, which are just two of the over twenty case studies featured in the report.
Authored by Indigenous Environmental Network, Rainforest Action Network, BankTrack, Oil Change International, Reclaim Finance, and Sierra Club the report demonstrates that to align their policies and practices with a world that limits global warming to 1.5°C banks must abjure carbon offsets and credits, and reject other false solutions, such as geo-engineering and bio-energy to the climate crisis. Human and Indigenous Rights must be observed in all climate action and investments. Particularly, Indigenous rights such as the rights of Self Determination, and Free, Prior, and Informed Consent must be factored into all bank financing decisions.
“Ill conceived carbon offset schemes and market-based mechanisms are ‘oil business as usual’ and not real emissions reductions,” said Alberto Salamando, Indigenous Environmental Network’s Counsel on Climate Change and Indigenous and Human Rights. “Banks must not continue to be complicit in the greater suffering of humanity and bring life as we know it closer to its destruction. Humanity itself is a threatened species.”
To limit global warming to 1.5°C-all banks must:
- Commit to phase out all financing for fossil fuel extraction and infrastructure, on an explicit timeline that is aligned with limiting global warming to 1.5°C, starting with financing for existing projects and companies active in tar sands oil, Arctic oil and gas, offshore oil and gas, fracked oil and gas, liquefied natural gas, coal mining, and coal power.
- Fully respect all human rights, particularly the rights of Indigenous peoples, including their rights to food and food sovereignty, their rights to water and lands and the right to Free, Prior, and Informed Consent, as articulated in the UN Declaration on the Rights of Indigenous Peoples. All financing for projects and companies that abuse human rights, including Indigenous rights must be rejected.
The Indigenous Environmental Network continues to call for divestment from these banks and financial institutions. We know that greenwashing and other false solutions will not bring the hard change of direction necessary to mitigate climate change.
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Common Dreams | Radio Free (2021-03-24T14:50:19+00:00) World’s 60 Largest Banks Have Poured $3.8 Trillion Into Fossil Fuels Since Paris Agreement. Retrieved from https://www.radiofree.org/2021/03/24/worlds-60-largest-banks-have-poured-3-8-trillion-into-fossil-fuels-since-paris-agreement/
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