Banks Fund Fossil Fuels But Say They Support Renewables

It’s Really Quite Hypocritical. Why Say You Support Renewables, Then Fund Fossil Fuels?

What You'll Discover Here:

Major banks fund fossil fuels – big time. They poured almost $ 2 trillion (yes, trillion) into the fossil fuels industry during 2016 – 2018. The worst offenders? US banks, according to a report published by a group of environmental organizations.

The hypocrisy of these banks is astonishing. The biggest funders – JP Morgan Chase, Wells Fargo, Citi, Bank of America, Morgan Stanley and Goldman Sachs, published a joint statement at the time of the Paris Agreement. They acknowledged the threat of climate change, pledged financial support for solutions, and called for a “more sustainable, low-carbon economy.” Yet they invest in fossil fuels.

When banks fund fossil fuels, the industry can grow. So more oil, coal and gas is exploited. And climate change and pollution get worse.

What about non-US banks? See below.

Do Non-US Banks Fund Fossil Fuels?

Yes, they do. However, there’s been a lot of public pressure to stop banks funding oil, coal and gas. It has worked well in Europe –

The World Bank announced that it would no longer finance oil and gas extraction.
France-based PNB Paribas committed to end support of shale and tar sands businesses
British multinational HSBC stopped financing offshore oil and gas projects in the Arctic.

But analysts say US banks simply don’t feel the same sort of public pressure – and there’s certainly little or no political pressure.

There have been protests in the US against banks funding the Dakota Access Pipeline, as well as against Chase and Wells Fargo funding fossil fuels.

But Big Oil is very powerful in the US. There’s lots of money for lobbying. So many politicians resist climate action. Even though we know have so little time left to avert catastrophe. It’s all about short-term profit.

The Banks Say They Care

Many large banks have made very public investments in sustainability. For example-

Wells Fargo (the second biggest fossil fuel funder), committed $200 billion to finance projects that will help us to transition to a low-carbon economy. It also invested $12 billion in sustainable businesses — but it put more than four times that toward financing fossil fuels the same year.
Chase committed $200 billion in clean energy financing by 2025. But it has spent almost the same amount financing fossil fuels in just the past three years, including Arctic oil and gas.

It Doesn’t Make Sense!

It’s not necessarily logical for the banks to fund fossil fuels. Coal is now more expensive than renewables. Oil and gas companies could face stranded assets if energy demand moves to renewables (although that doesn’t seem likely in the short term). And it’s harder for Big Oil to make money now because much of the “easy” oil is already tapped.

Those are economic considerations, but why would they do this morally? The people who run the banks have children and grandchildren – why would they wish a ruined world upon them? Short-term thinking I suppose.

Banks Could Really Make a Difference

Banks could make a significant impact on climate change. If big banks don’t fund fossil fuels, then extracting more oil and gas becomes more risky and costly. If we don’t extract, and “keep it in the ground” as we’re supposed to, we’ll have a better change of fighting global warming.

The sad part is that if we’re still building new oil and gas fields, all our renewable energy is fighting a losing battle.

Start making a difference today – download your FREE report on the 3 big things that you can do to help slow climate change. (Spoiler alert:- recycling is great, but it won’t make a big difference).