The World Agreed to Not Burn Most Fossil Fuels. Why Aren’t These Banks Listening?

Last December, the world agreed in the historic Paris climate accord not to burn most fossil fuels.  To do that, some of the lowest-hanging fruit is halting the investment of hundreds of billions of dollars into the most expensive and extreme fossil fuels:  coal, Arctic oil drilling, tar sands, deep offshore drilling, and liquefied natural gas (LNG) export.

So how is the world doing?

“Needs improvement” would be putting it charitably, according to a new report looking at the world’s biggest private-sector banks, which are still funding the industries that drive climate change to the tune of hundreds of billions of dollars.

Shorting the Climate is the seventh edition of an annual report by Rainforest Action Network, BankTrack, Sierra Club, and Oil Change International that evaluates how exposed big banks are to the worst fossil fuel investments.  In finance terms, “short-selling” means to bet on, or profit from, failure.

The researchers provided grades on bank involvement with coal mining, coal power, extreme oil, and LNG exports.  They did this by examining the publicly available data associated with the 25 largest global private commercial and investment banks based in Europe, Canada, and the United States.  They graded banks in each category A through F, reflecting “the degree of a bank’s alignment with the Paris Agreement’s 1.5° (or 2°) climate target.”

Amanda Starbuck, Climate and Energy Program director at Rainforest Action Network (RAN), told ThinkProgress that she was in Paris for the climate talks last year and found herself asking, “if we limit warming to 2 degrees C, what bank investments are going to prove to be bad investments?”  The report went in “a really different direction this year” as a result of this new global dynamic.  She said the big question is “which banks are effectively gambling that we’re going to fail” by investing in the fossil fuel industries that have to stay in the ground: coal power, coal mining, tar sands, deep oil, Arctic oil, and LNG.

“Too many banks are risking resources on unstable fossil fuel companies and exposing investors and customers to greater financial risks while financing dirty, dangerous projects that threaten our planet,” Cindy Carr, spokesperson for the Sierra Club, told ThinkProgress.

The results show that, through hundreds of billions in investments, some of the world’s top banks are helping lock the world into a high-emissions pathway that makes it extremely difficult to limit global warming to less than 2 degrees Celsius.  In the last three years, banks have sunk $154 billion in the biggest coal-fired power producers, $42 billion in companies active in coal mining, $282 billion in businesses building LNG export infrastructure, and $306 billion into companies engaged in the most extreme forms of oil extraction.

Read more at The World Agreed to Not Burn Most Fossil Fuels.  Why Aren’t These Banks Listening?