World's Biggest Banks Claim to Go Net Zero While Investing $742 Billion in Fossil Fuels
According to a new report, in the last six years, the world’s most powerful banks -- JPMorgan Chase, Citi, Wells Fargo, and Bank of America -- have put $4.6 trillion into fossil fuel projects despite being signees of an international climate initiative of banks committed to reaching "net zero.” Also disconcerting, in 2021, 60 of the world’s largest banks invested $742 billion in financing for fossil fuel projects, $52.9 billion of which went into offshore oil drilling, with JPMorgan Chase and Citi leading the pack, despite their supposed climate commitments.
UNEP FI: Net-Zero Banking Alliance, November 16, 2021.
Our Eden: Your Bank is Funding Climate Change, November 13, 2021.
Why This Matters
Banks and private equity firms play important roles in either mitigating or contributing to climate change. A recent investigation found that some of the largest private equity firms in the US are responsible for financing and profiting from fossil fuel projects that heavily contribute to the country's greenhouse gas emissions. In pouring $7 trillion in assets away from public markets, the firms ensure their investments are exempt from most financial disclosure regulations. Even when banks make net-zero promises, they don’t tend to keep them -- 25 European banks that are members of the Net-Zero Banking Alliance have provided $400 billion dollars for fossil fuel projects since 2016.
R3 Boomerang: Global carbon dioxide emissions reach highest level in history, March 9, 2022.
How To Hold Banks Accountable
A group of countries, led by the US and the UK, agreed last year at COP26 to end funding for fossil fuel projects abroad. But greenwashing allows them to skirt these regulations and fly under the radar.
On March 31, the UN launched a task force to implore businesses to make good on their climate promises. The group will draft standards to assess claims by non-state groups -- including cities and companies -- that they are cutting their emissions.
"Banks largely like to say that they are supporting their clients in the transition to a low-carbon economy,” Alison Kirsch, the Research and Policy Manager at the Rainforest Action Network told Earther. "However, if that support doesn’t have teeth -- requirements around ending fossil fuel expansion that companies must meet in order to continue receiving financing -- then we are just going to see more business as usual.”
NowThis: Sheldon Whitehouse on Greenwashing and Fossil Fuel Industry, May 14, 2021.
Reuters: 2021 saw jump in greenhouse-gas emissions, says report, January 10, 2022.
NBC: Are Major Companies Living Up To Their Net-Zero Pledges To Combat Climate Change?, February 10, 2022.