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Clouds of smoke and fire emerge during a controlled burn in an effort to clean up oil in the Gulf of Mexico following the Deepwater Horizon explosion. Justin Stumberg/U.S. Navy
Clouds of smoke and fire emerge during a controlled burn in an effort to clean up oil in the Gulf of Mexico following the Deepwater Horizon explosion. Justin Stumberg/U.S. Navy

Fossil Fuels

Banks Love Renewable Energy, But Their Boardrooms Are Still Linked With Fossil Fuels Corporations

Big banks are talking the talk about clean, renewable energy and sustainability, but many of them still have members who have major ties to some of the world’s largest fossil fuel corporations.

Image courtesy Justin Stumberg/U.S. Navy

Big banks are talking the talk about clean, renewable energy and sustainability, but many of them still have members who have major ties to some of the world’s largest fossil fuel corporations. These ties linking the bank boardrooms to the fossil fuel industry are subtle but can affect board and banking decisions — swaying them in favor of the fossil fuel industry, for example.

An analysis from Bloomberg notes that Goldman Sachs and JPMorgan Chase may have made public statements about their goals to be more climate friendly, but talking about things and doing them are two very different things.

The analysis by Bloomberg reported that the world’s largest banks issued billions in loans to sustainable businesses and have even taken steps to limit funding for some of the world’s worst polluters, but this mentality hasn’t reached the boardroom. Many executives who sit on the boards at 20 of the leading banks in both the U.S. and Europe have more ties to the fossil fuel industry than not. Bloomberg analyzed past and present professional affiliations of over 600 executives and directors at these banks, and the findings are a bit alarming.

73 of those analyzed held a position at some point in time with one or more of the largest corporate greenhouse gas polluters — 16 were connected to oil or refining companies. These same 20 banks have helped create $1.4 trillion of debt financing for fossil fuel producers since the signing of the Paris agreement in 2015.

A Quick Glance At Key Points From Bloomberg‘s Analysis

JP Morgan Chase

Lee Raymond is a former CEO and chairman of Exxon Mobil Corp. Since 2013, he’s been the lead independent director at the bank and is an advisor on long-term strategy, and a sounding board for JPMorgan’s CEO, Jamie Dimon. Bloomberg notes that Raymond is a “legendary oilman and climate skeptic” and has been a presence on the board for more than three decades.

ING Groep NV

This bank has six members of its board with ties to Royal Dutch Shell, Daimler, and other polluters. Bloomberg reported that none of these bank members have links to renewable energy, with the exception of Chairman Hans Wijers, who served as chair of an environmental association, Natuurmonumenten, up until 2019. However, on the positive side, ING has still addressed climate risks well ahead of its rivals. In 2005, it also disclosed its carbon footprint and is focusing more than €600 billion of loans to companies that are working toward meeting goals that are outlined in the Paris Agreement.

Banking Executives That Do Have Ties To Renewables

There is an extensive list of several banking executives who do have sustainable connections. Many of these connections are with organizations that are not well-known or considered large. Sharon Allen is a board member at Bank of America is also a member of Firt Solar Inc’s board. Lena Wilson, a board member of the Royal Bank of Scotland, is also on the board of Iberdrola SA’s ScottishPower Renewables unit. Michael Klein, a board member at Credit Suisse, is also on the board of Conservation International. You can see the full list here.

Renewable and sustainable energy as an idea has come a long way. It has gone from being a green, tree hugger, to a movement that our very existence depends on us adopting if humanity wants to continue living on this planet. However, like one of the worst addictive drugs, the fossil fuel industry is hard to let go of. There are so many things that we use right now that are made from these industries. Simple things like your toothbrush, that plastic mug you got a Goodwill for $2 or the plastic in your electronics.

The tapestry of humanity is threaded with these connections with the fossil fuel industry. One major piece of thread is the banking system and if our banks were to focus on funding greener initiatives, this could send a powerful message to the fossil fuel industry: Evolve, now, please. Or else, we won’t fund you anymore.

Here in Louisiana, ExxonMobil stepped up during the COVID-19 crisis and turned its chemical plant into a hand sanitizer manufacturing plant. Oil drums were filled with hand sanitizer that was given to first responders. I bring this up because, just imagine if the oil refinery companies were to fully embrace renewables. They would have to stop producing oil and take on the challenge of creating clean energy products that would replace their fossil fuel output. We are going to have to work through the knots, challenges, and creatively innovate if we really, truly want to embrace renewables.

One key starting place for unraveling of the intricate tapestry is in the boardrooms of our largest banks.

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