It’s clear: banks are just as guilty for the destruction of our climate as the fossil fuel companies that they fund.
Since the Paris climate agreement in 2015, where the world agreed to avert the worst effects of climate breakdown, the world’s top banks have poured $1.9 trillion into fossil fuel financing. And that’s not even counting their 2019 investments which are still being calculated.
While many banks may invest in renewable energy too, the bad far outweighs the good. In the last three years, global banks have only put $130 billion into green projects. That’s less than 7% of what they pump into oil, gas and coal.
Cashing in on climate change
According to research by Banktrack and other organisations, the US is home to some of the worst banks for fossil fuel funding. Names like JP Morgan, Chase, Wells Fargo and Citi sit right at the top of the leaderboard. They may not be household names here in the UK but they are nonetheless fuelling our climate breakdown.
And the worst bank in Europe? Barclays is just behind the US banks for fossil fuel financing – and shows no signs of slowing down.
For example, in just three years from 2016 to 2018, Barclays provided $85 billion in funding to fossil fuel companies. This includes companies involved in coal, fracking, tar sands, and Arctic oil projects. Of this, $24 billion was for companies heavily involved in expanding the extraction and use of fossil fuels – which is the exact opposite of what should be happening.
Destroying the forests needed to combat climate change
Banks also fund projects that contribute to forest destruction. In 2019, Global Witness found that more than 300 banks and investors are funding businesses that drive deforestation.
The relentless funding by investment banks of commodities like palm oil, soya and beef is destroying ecosystems across the world. According to one study, these same ecosystems could make up more than a third of much-needed carbon emissions mitigation by 2030 to limit warming to 2ºC.
Destroying forests damages the world’s chances of beating climate change, and is linked to human rights violations – for example against Indigenous Peoples who rely on those ecosystems to survive.
The damage done to forests by the activities of major agribusiness firms – and the banks that fund them – was made clear in August 2019 when images of the Amazon in flames spread around the world. These fires were largely started to clear land for crops and cattle, to meet the demand from food companies around the world for cheaper meat and dairy products.
And some of the biggest names in global finance – Bank of America, Deutsche Bank, HSBC, Santander and Standard Chartered among them – have channelled tens of billions into these companies that contribute to forest destruction and disastrous fires caused by industrial agriculture.
Is your money financing climate change?
Money deposited into your bank account on the high street isn’t part of investment bank funding, which is where money for fossil fuel companies comes from. But major banks like Barclays have investment arms, which are a core part of the system causing climate change.
It’s high time banks like Barclays were held up alongside fossil fuel companies as the main architects of the climate crisis. Instead of bankrolling oil drilling and deforestation, they should be pumping billions into renewable energy and forest restoration.