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Climate Change

Don’t Be Fooled — Investment Bankers Still Love Fossil Fuel Companies

Savvy promises about zero emissions goals do not hide the fact that major world banks still are propping up the fossil fuel industry through robust financing.

The noble road to divestment is paved with uneven curves. While many investment bankers will accrue handsome profits from selling green bonds, their real payback comes from arranging debt issues and loans for fossil-fuel companies. According to Bloomberg Green, the $887 million of revenue investment bankers derived from green bond customers can’t compare with the $1.4 billion drawn from fossil-fuel clients. The lowdown is that banks are garnering about 40% more in fees from helping out fossil-fuel companies.

Gulp. So how are major investment bankers rationalizing such fossil fuel funding while at the same promoting the environment?

It’s all about the profits, stupid.

JPMorgan Chase & Climate Culpability

Investment bankers hold tremendous power in affecting climate change. JPMorgan Chase remains the world’s worst banker of fossil fuels, though its funding did drop significantly last year. Citi follows as the second most awful fossil fuel bank, shadowed by Wells Fargo, Bank of America, RBC, and MUFG. Barclays is the culprit in Europe, and Bank of China is the most dismal in China. From 2016 to 2020, Postal Savings Bank of China had the largest percent change in fossil fuel financing — it increased over 1,200% from $168 million in 2016 to $2.2 billion in 2020, according to CNBC.

JPMorgan’s Jamie Dimon mentioned the word “climate” at least 10 times in a letter he sent to shareholders last month. “We are dedicated to addressing climate and sustainability around the world,” Dimon wrote. He added, however, that he considers the issue complex, because “we need to acknowledge that the solution isn’t as simple as walking away from fossil fuels.”

Dimon was quick to mention that addressing climate change doesn’t mean “abandoning” companies that produce and use fossil fuels. Instead, JPMorgan will work with them to reduce their environmental impact. He sees a “huge opportunity in sustainable and low-carbon technologies and businesses” and plans to evaluate clients’ progress according to reductions in carbon intensity.

JPMorgan is the top financier to energy companies since the Paris climate agreement in 2015; it ranks as the No. 2 underwriter of green bonds behind France’s Credit Agricole SA. “We will need resources such as oil and natural gas until commercial, affordable, and low-carbon alternatives can be developed to meet all of our global energy needs,” Dimon wrote. “This is where business and government leaders need to focus their time and attention.”

In the past 4-plus years, New York-based JPMorgan earned about $903 million of revenue from working with non-renewable energy companies, compared with $228 million from advising on green bond transactions for companies and governments, according to data compiled by Bloomberg. By comparison, Credit Agricole collected $227 million from fossil-fuel companies and $212 million from green bond customers in the same period, Bloomberg data shows.

Investment Bankers Buy Into Climate Chaos

Two banks that decreased their fossil fuel financing the most are based in Europe. French cooperatively owned bank Crédit Mutuel had the largest drop in fossil fuel financing, with a 100% decline from $19 million in 2016 to zero in 2020. CNBC also calculated that Zürich, Switzerland-headquartered investment bank UBS decreased fossil fuel financing by 73%, from $7.7 billion in 2016 to $2.1 billion in 2020.

The 60 largest commercial and investment banks have collectively financed $3.8 trillion in fossil fuel companies between 2016 and 2020, the 5 years since the Paris Agreement was signed. That and other data was included in a report titled “Banking on Climate Chaos 2021.

This report tracks funding for 100 top fossil fuel expansion companies and finds significant increases in funding last year despite investment bankers voicing their support for the Paris Agreement. The Banking on Climate Chaos 2021 report also assesses banks’ future-facing policies to restrict financing for fossil fuels, and finds that UniCredit has the strongest policy overall, though it only earned about half of the available points — underscoring that the banking sector remains far from committing to a complete exit from fossil fuel financing.

The report assesses bank financing for and policies regarding top companies in key fossil fuel sectors and details case studies where this financing has resulted in harmful impacts on communities around the world.

  • Tar sands oil: 2016–2020 financing was dominated by the Canadian banks, led by TD and RBC, as well as JPMorgan Chase. The Line 3 pipeline is an example of how bank financing backs tar sands expansion and Indigenous rights violations.
  • Arctic oil and gas: Banks have made recent policy progress in this area by restricting direct financing for projects in the region. JPMorgan Chase, ICBC, China Minsheng Bank, and Sberbank are the biggest funders since the Paris Agreement of companies with major operations in the Arctic.
  • Offshore oil and gas: Though it has strong policies on unconventional oil and gas, BNP Paribas’s largely unrestricted financing for the super majors allowed it to emerge as the world’s worst banker of offshore oil and gas over the last 5 years.
  • Fracked oil and gas: From development of Argentina’s Vaca Muerta shale field, to pipelines like Mountain Valley and Coastal GasLink, the fracking sector presents health hazards to local communities on top of rights and climate impacts. US banks like Wells Fargo and JPMorgan Chase dominate fracking financing, with Barclays, MUFG, and Mizuho as the biggest funders outside of North America.
  • Liquefied natural gas (LNG): Reflecting the “misguided notion” that gas will serve as transition fuel for the coming decades, the report discusses how the bank financing for the 30 largest LNG companies was higher in 2020 than in any year since the Paris Agreement’s adoption. The sector’s biggest bankers over the last half decade, Morgan Stanley, Citi, and JPMorgan Chase, don’t have policies restricting financing for LNG.
  • Coal mining: Chinese banks Industrial Bank, China Construction Bank, and Bank of China lead financing for coal mining and lack policies to rein in this financing. BNP Paribas, BPCE/ Natixis, Crédit Mutuel, and UniCredit have best-in-class coal mining policy restrictions.
  • Coal power: Coal power financing post–Paris Agreement is led by Bank of China, ICBC, and China CITIC Bank. Multiple coal power case studies are highlighted in the pages of the report, demonstrating in particular Chinese and Japanese bank support for new coal projects even in our climate-constrained world.

The Banking on Climate Chaos 2021 report authors argue, until the investment bankers prove otherwise, the “net” in “net zero” leaves room for emissions targets that fall short of what the science demands, based on “copious offsetting or absurd assumptions about future carbon-capture schemes, as well as the rights violations and fraud that often come hand in hand with offsetting and carbon markets.”

When will financial institutions be required to measure their financed emissions? Individuals who rely on investment bankers must speak up so that funds they control address rather than perpetuate climate impact.

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Written By

Carolyn Fortuna (they, them), Ph.D., is a writer, researcher, and educator with a lifelong dedication to ecojustice. Carolyn has won awards from the Anti-Defamation League, The International Literacy Association, and The Leavy Foundation. Carolyn is a small-time investor in Tesla. Please follow Carolyn on Twitter and Facebook.


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