Institutions have played a prominent role since the Paris Agreement at end-2015 in enabling global warming
As executives from JPMorgan Chase & Co, Citigroup, Deutsche Bank and other lenders prepare for the most important UN climate summit in six years, their companies continue to help provide almost as much money for fossil fuels as for green projects.
Now, as global leaders prepare to descend on Glasgow, Scotland, for the COP26 climate talks, a growing chorus of investors and activists are demanding that banks stop funding polluters — before it is too late. “At the top of many big banks, there is a realisation that they will have to step back from financing certain fossil-fuel projects, but many are only just beginning this journey,” said Jessica Ground, the London-based global head of environmental, social and governance at Capital Group, which has $2.6-trillion of assets under management.
Banks will often respond to criticisms of their fossil-fuel financing by citing their commitment to funding clean energy, Sunrise Project said. But the group characterised this as a “distraction”. Investing in clean energy doesn’t alleviate the effects of lending to the world’s worst polluters, it said.
There are weaknesses in the data set. For example, it is possible some portion of a loan to an oil company might have been used on a clean-energy project. Bloomberg started tracking fees that banks earn from extending loans in 2018, so fees from 2016 and 2017 might be underrepresented. But none of that changes the overall picture left by the data — namely that banks have financed hundreds of billions of dollars worth of carbon emissions.
JPMorgan said in May that it plans to report a 35% reduction in “operational carbon intensity” for its oil and gas portfolio by the end of the decade. The commitment followed the company’s announcement last year that it was aligning its financing activities with the Paris Agreement.
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