Published on March 22nd, 2019 | by Joshua S Hill0
Banks Funneled $1.9 Trillion Into Fossil Fuels Since Paris Agreement
March 22nd, 2019 by Joshua S Hill
A new report published this week shows that 33 global banks provided $1.9 trillion to fossil fuel companies since the adoption of the Paris Climate Agreement at the end of 2015 and that the amount of fossil fuel financing has increased in each of the past two years.
The new report, Banking on Climate Change 2019, is the tenth annual fossil fuel report card and the first-ever analysis of funding from the world’s major private banks for the fossil fuel sector as a whole. The report was released Wednesday by Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Sierra Club, and Honor the Earth, and endorsed by over 160 organizations around the world.
In addition to finding that 33 of the world’s top banks are supplied $1.9 trillion to fossil fuel companies since the adoption of the Paris Agreement, the report also found that of that $1.9 trillion, $600 billion went to 100 companies that are most aggressively expanding fossil fuels, highlighting business-as-usual practices that fly in the face of the latest scientific warnings from the Intergovernmental Panel on Climate Change (IPCC) which warned that “Limiting global warming to 1.5°C would require rapid, far-reaching and unprecedented changes in all aspects of society.”
That same report not only outlined the dangers ahead if we remain committed to business-as-usual practices but also highlighted the fact that we need $2.4 trillion worth of clean energy investments each year up to 2035 to stave off the worst of the effects of climate change. That so much money is still being funneled towards the fossil fuel energy sector speaks volumes about how banks and energy companies are responding to the need for renewable energy.
“Alarming is an understatement. This report is a red alert,” said Alison Kirsch, Climate and Energy Lead Researcher at Rainforest Action Network. “The massive scale at which global banks continue to pump billions of dollars into fossil fuels is flatly incompatible with a livable future. It’s an insult to logic, to science and to humanity that since the groundbreaking Paris Climate Agreement, financing for fossil fuels continues to rise. If banks don’t rapidly phase out their support for dirty energy, planetary collapse from man-made climate change is not just probable — it is imminent.”
Tellingly, the report also found that the four biggest global bankers of the fossil fuel energy sector are all US banks — JPMorgan Chase, Wells Fargo, Citi, and Bank of America. This is not to say that banks in the rest of the world aren’t also making nuisances of themselves, with Barclays of England, Mitsubishi UFJ Financial Group (MUFG) of Japan, and RBC of Canada all continuing to heavily finance the industry. But, as highlighted by the authors of the report, “The massive economic weight of the US oil and gas industry can be easily seen in the fact that the top four bankers of climate change are all headquartered in the United States” and, further, two more US banks — Morgan Stanley and Goldman Sachs — serve to fill out the top 12, meaning that “all six of the US banking giants are in the top dirty dozen fossil banks” and “account for an astonishing 37% of global fossil fuel financing since the Paris Agreement was adopted.”
US banking giant JPMorgan Chase is also highlighted in the report as “very clearly the world’s worst banker of climate change,” having funneled $196 billion into the fossil fuel industry between 2016 and 2018 “is nearly a third higher than the second-worst bank, Wells Fargo” — another US bank.
Total Fossil Fuel Financing by Year
“We’re faced with ever-worsening climate change impacts worldwide, and the latest IPCC report provides a stark 2030 deadline for the deep cuts in global CO2 emissions needed to avoid full climate breakdown,” said Johan Frijns, Director of BankTrack. “Yet banks continue to throw their billions at the fossil fuel industry while announcing minor policy tweaks here and endorsements of the latest toothless ‘responsible finance’ initiative there. One wonders what on earth it will take for banks to finally change course and fully abandon the fossil fuel sector. Campaigners will be demanding exactly this at this year’s upcoming bank AGMs, armed with this report’s shocking new findings.”
RBC of Canada was ranked fifth and is the world’s top banker of tar sands and funneled a total of $101 billion into the fossil fuel industry. England’s Barclays is the top European banker of fracking and coal and is the worst European bank for climate change, having poured $85 billion into fossil fuels and $24 billion into expansion. Japan’s worst fossil fuel bank was MUFG, which funneled $80 billion into fossil fuels overall and $25 billion into fossil fuel expansion specifically, while China’s top banker of coal power was Bank of China, qualifying it as the country’s worst banker of fossil fuels with $17 billion poured into expansion.
“At a time when science tells us we need to rapidly transition to clean energy, major American banks are placing themselves on the wrong side of history by continuing to offer a blank check to the fossil fuel industry,” concluded Ben Cushing, Sierra Club Beyond Dirty Fuels Campaign Representative. “The global outcry for financial institutions to stop financing climate destruction will only grow louder and more powerful until these banks get the message and pull their support for dirty fossil fuels once and for all.”