Rainforest Action Network Calls Out Big Banks On Fossil Fuel Spending

    A Study By The Rainforest Action Network Shows That The World’s 60 Largest Banks Have Poured US$3.8 Trillion Into Fossil Fuels Since The Ratification Of The Paris Agreement

    (Image Courtesy Of Rainforest Action Network)

    The 12th edition of the self-proclaimed most comprehensive report on fossil fuel bank financing by the Rainforest Action Network (RAN) documents an alarming disconnect between the global scientific consensus on climate change and the continued practices of the world’s largest banks. This year’s report, titled Banking On Climate Chaos 2021 expands its focus from 35 to 60 of the world’s largest banks. The report reveals that in the five years since the Paris Agreement was adopted, these banks have pumped over US$3.8 trillion into the fossil fuel industry. The report also concludes that fossil fuel financing was higher in 2020 than in 2016, a trend that stands in direct opposition to the Agreement’s stated goal of rapidly reducing carbon emissions, with the expressed goal “to limit global warming to well below 3.6°F (2°C), preferably to 2.7°F (1.5°C) compared to pre-industrial levels.”

    The report names the largest funders of fossil fuels around the world, with JPMorgan Chase the highest contributor overall, RBC the highest Canadian contributor, Barclays the largest UK contributor, BNP Paribas the highest contributor from the European Union, MUFG the highest contributor from Japan, and the Bank of China as the highest contributor from China.

    Sustained Funding

    The report demonstrates that, even amidst a pandemic-induced recession that resulted in an across-the-board reduction of fossil fuel financing of roughly 9%, the world’s 60 largest banks still increased their financing in 2020 to the 100 companies most responsible for fossil fuel expansion by over 10%. According to RAN, these banks have poured nearly US$1.5 trillion over the past five years into 100 top companies expanding fossil fuels. This includes companies behind 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 nearly 20 case studies featured in the report.

    Bank Breakdown

    US-based banks continue to be the largest global drivers of emissions in 2020, with JPMorgan Chase (Chase) remaining the world’s largest supporter of fossil fuels. Chase recently committed to align its financing with the Paris Agreement, and yet, continues fossil fuel financing. From 2016 through 2020, Chase’s lending and underwriting activities have provided nearly US$317 billion to fossil fuels, 33% more than Citi, the next highest-supporting fossil bank over this period.

    Wells Fargo’s total fossil financing plunged by 42% in 2020. As a result, Wells Fargo dropped from the fourth biggest fossil fuel-supporting bank in 2019, to ninth most in 2020. This is the only time over the past five years that Wells Fargo has not been one of the four most supportive fossil banks. BNP Paribas (whose US subsidiary is Bank of the West, which advertises its responsibility on climate) came in as the fourth-most fossil bank in 2020. BNP Paribas provided US$41 billion in fossil financing in 2020, a 41% increase over its 2019 activity. This means the biggest absolute increase in fossil financing last year came from BNP Paribas, despite the bank’s strong policy commitments restricting financing for unconventional oil and gas.

    Cognitive Dissonance

    The report also examines existing climate policy commitments by banks and finds them grossly insufficient and out of alignment with the goals of the Paris Agreement across the board. Recent high profile bank policies focus either on the distant and ill-defined goal of achieving “net zero by 2050” or on restricting financing for unconventional fossil fuels. In general, existing bank policies are strongest with regards to restrictions for direct project-related financing. And yet, project-related financing made up only 5% of the total fossil fuel financing analyzed in this report.

    Expert Commentary

    The authoring organizations behind this report are united in their demand that respect for Indigenous rights, including the right to free, prior, and informed consent, and human rights must be a non-negotiable requirement for all bank financing decisions.

    “The unprecedented COVID-19 dip in global financing for fossil fuels offers the world’s largest banks a stark choice point going forward; they can decide to lock in the downward trajectory of support for the primary industry driving the climate crisis or they can recklessly snap back to business as usual as the economy recovers,” said RAN Executive Director Ginger Cassady. “US-based banks continue to be the worst financiers of fossil fuels by a wide margin. Going into the Glasgow climate summit at the end of the year, the stakes could not be higher. Wall Street must act now to stop financing fossil expansion and commit to fossil zero, so as to truly align its financing practices with keeping our planet from heating up more than 1.5 degrees.”

    “We must understand that by bankrolling the expansion of oil and gas the top banks of the world have blood on their hands and no amount of greenwashing, carbon markets, unproven techno-fixes, or net-zero commitments can absolve their crimes against humanity and Mother Earth,” said Tom Goldtooth, executive director of the Indigenous Environmental Network. “Indigenous lands globally are being plundered, our inherent rights are being violated, and the value of our lives has been diminished to nothing in the face of fossil fuel expansion. For the sacredness and the territorial integrity of Mother Earth, these banks must be held accountable for covering the cost of her destruction.”

    “These numbers expose the hollowness of banks’ ever-multiplying commitments to be net-zero or align with the Paris Agreement climate targets,” said Lucie Pinson, founder and executive director of Reclaim Finance. “A perfect example can be found in France. Finance Minister Bruno Le Maire is fond of calling Paris the capital of green finance, but this data exposes it as 2020’s capital of climate hypocrisy, with four unscrupulous banks making France the largest backer of oil, gas, and coal in Europe. BNP Paribas merits singling out as the world’s fourth-largest fossil financier in 2020, having funneled multi-billion-dollar loans to oil giants like BP and Total. Nonetheless, it’s clear that all banks need to replace empty promises with meaningful policies enacting zero tolerance for fossil fuel developers.”

    “Many of the world’s largest banks, including all six major US banks, have made splashy commitments in recent months to zero-out the climate impact of their financing over the next 30 years,” said Sierra Club Financial Advocacy Campaign Manager Ben Cushing. “But what matters most is what they’re doing now, and the numbers don’t lie. This report separates words from actions, and the picture it paints is alarming: major banks around the world, led by US banks in particular, are fueling climate chaos by dumping trillions of dollars into the fossil fuels that are causing the crisis. Big banks don’t deserve a pat on the back if their 2050 pledges are not paired with meaningful 2021 actions to cut fossil financing.”

    “As the date of the crucial Glasgow Climate Summit approaches, and God forbid the global corona crisis prevents the world from meeting to address that other, much bigger existential crisis, we witness one bank after another making solemn promises to become ‘net zero by 2050,’” said BankTrack Director Johan Frijns. “There exists no pathway toward this laudable goal of a generation away that does not require dealing with bank finance for the fossil fuel industry right here and now, yet too many current promises lack precisely that; a firm commitment to start severing ties with all coal, oil, and gas companies that plan on continuing their climate wrecking activities in the years to come.”

    “This report serves as a reality check for banks that think that vague ‘net-zero’ goals are enough to stop the climate crisis,” said Lorne Stockman, senior research analyst at Oil Change International. “Our future goes where the money flows, and in 2020, these banks have ploughed billions into locking us into further climate chaos. Banks need to be focused on reducing fossil fuel production now, rather than on a far off and insufficient goal in the distant future. The time for half-measures is over.”

    Banking on Climate Chaos 2021 was authored by RAN, BankTrack, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club, and is endorsed by more than 300 organizations from 50 countries around the world.