More and more attention has been paid recently towards the massive impact of banks and other big investors on climate change due to their continuing funding of fossil fuel expansion.
This article from VICE news last year sums up the problem nicely: The world’s biggest banks are still investing billions in fossil fuels, despite years of pledges on climate change. An excerpt:
It has been almost three years since the UN’s Intergovernmental Panel on Climate Change (IPCC), issued a stark warning: By 2030, the world must cut its carbon emissions by almost half of 2017 levels to keep global warming to 1.5 degrees above pre-industrial temperatures. Beyond this point, the risk of droughts, floods, famines and other ecological disasters becomes significantly higher. To adhere to the 1.5 degree target, the IPCC said the global economy must reach the point of carbon neutrality by 2050 – a date that has since become a de facto finish line for countries and corporations.
These days, almost everyone has a net zero by 2050 target, even airlines and oil majors. However, very few governments or companies have detailed exactly how they’ll get nearly halfway to carbon neutral in the coming decade. If the transition away from fossil fuels was truly underway, you’d expect to see financiers retreating from oil and gas and shifting ever-greater sums of capital towards renewable energy. That just isn’t the case for now.
According to Banking on Climate Chaos 2021, a report authored by the Rainforest Action Network and five other NGOs, fossil fuel financing from the world’s 60 largest commercial and investment banks was higher in 2020 than it was in 2016.
The numbers got even worse in 2022, especially for Canada’s banks who doubled down on fossil fuels and the tar sands in particular more than almost any other country on Earth.
Now about those Canadian banks, the National Observer recently wrote a great piece explaining the issue in Canada:
Despite making promises to achieve net-zero greenhouse gas emissions, Canada’s biggest banks play an outsized role in propping up the global fossil fuel economy: RBC, TD, Scotiabank, BMO and CIBC all find themselves among the world’s top 20 financiers of fossil fuels.
These five banks alone have pumped approximately $911 billion into coal, oil and gas companies since the Paris Agreement was signed in late 2015, and they are on track to cross the $1-trillion threshold later this year. That money is used to expand fossil fuel production, build new pipelines, construct liquefied natural gas (LNG) facilities and more, frequently at the expense of Indigenous rights.
Now, with a global energy transition underway, Canada’s bankers find themselves neck-deep in oil money with a choice to make: Turn their backs on fossil fuels — the main driver of climate change — or continue financing the very activity threatening all life on Earth.
Most banks don’t appear to want to make this choice. Instead, they’re trying to thread the needle by delaying climate action so there’s more time to squeeze revenue out of existing investments that can’t transition to a world without fossil fuels. Unfortunately for them, and us, time is running out to slash greenhouse gas emissions in half by 2030 — the only way scientists say the planet can buy time to prevent catastrophic warming.