Banks are backing the fossil fuel industry
Banks are backing the fossil fuel industry: From 2016 to 2020, the world’s 60 largest banks invested $3.8 trillion into fossil fuel projects and companies. That’s a lot of coal mines, pipelines, and dirty factories. While many of us do our part to slow climate change, banks use our money — the cash we deposit or pay on our mortgages — to prop up the very companies making climate change worse.
Banks need to stop lending money to fossil fuel companies and their endless expansion projects. What does that look like? These four steps would harness the power of finance to halt the climate crisis, and ensure a healthier, safer, fairer world for everyone.
Banks need to:
- CREATE SHORT-TERM REDUCTION TARGETS: Present short-term fossil fuel financing reduction targets and implementation plans that cover all of their financial services. Many banks are making vague net zero commitments for 2050, but every year counts – and 2050 is too late. Banks should be setting clear targets to phase out fossil fuels and cut the emissions they finance, across all their lines of business: investments, bonds, and lending.
- STOP FUNDING NEW FOSSIL FUELS: Integrate the findings of the IEA Net Zero scenario into their climate strategies, including a ban on financing new fossil fuel projects or financing companies expanding fossil fuel production. The International Energy Agency’s 2021 Net Zero Emissions Scenario states that to meet the goals of the Paris Climate Agreement, there’s no room for further fossil fuel development. Banks need to align this scenario with their climate strategies, and rule out reliance on discredited offsetting and other unproven carbon dioxide removal schemes.
- IMMEDIATELY PHASE OUT ALL COAL: Immediately phase out financing of thermal coal companies, including utilities without short-term plans to shut coal, and make a plan to phase out oil and gas financing. Coal is on its way out. Its dirty extraction is on a downward trend, but banks should be stamping it out a lot faster. The bigger danger is oil and gas extraction, which banks are still financing across the world. That’s why, together, we’re pushing banks to scrap all fossil fuel funding.
- PROTECT INDIGENOUS RIGHTS AND BIODIVERSITY: Ensure the free, prior, and informed consent of Indigenous communities and their lands in all financing activities. Indigenous peoples have long lived in harmony with their lands, but many fossil fuel projects are threatening the land and way of life. Banks must only fund clean energy activities that respect Indigenous rights to free, prior, and informed consent.
Bank On Our Future
From 2016 to 2020, the world’s 60 largest banks invested $3.8 trillion into fossil fuel projects and companies. That’s a lot of coal mines, pipelines, and dirty factories. While many of us do our part to slow climate change, banks use our money (the cash we deposit or pay on our mortgages) to prop up the very companies making climate change worse.