Major banks pour billions into "extreme" fossil fuels
New report outlines the extent of the problem
A report released this week by Rainforest Action Network (RAN), BankTrack, Sierra Club and Oil Change International shows that the world's biggest banks are driving climate change by pumping hundreds of billions of dollars into extreme fossil fuels.
The seventh edition of an annual report, Shorting the Climate: Fossil Fuel Finance Report Card 2016, evaluates the bank policies and the exposure of 25 U.S., European and Canadian banks to, what researchers dub, "extreme fossil fuels" - defined as "the most carbon intensive, financially risky, and environmentally destructive sub-sectors. This includes coal mining, coal power, extreme oil (tar sands, Arctic oil, ultra-deep drilling) and North American liquefied natural gas export."
The report, which also graded banks on their human rights policies, shows that banks performed poorly in all sectors. Levels of exposure to extreme fossil fuels were high across the board with researchers saying that tens or hundreds of billions of dollars are invested by the largest 25 banks in companies involved in these sectors, with a vast majority of banks having no significant policies in place to stop funding extreme fossil fuels.
Yann Louvel, BankTrack's Climate and Energy Campaign Coordinator commented:
"Many banks announced a move away from coal in the run up to COP21 and after, but most of these focused only on coal mining. Our assessment clearly shows that they still have a long way to go to concretely exit this industry, and even more for the other extreme fossil fuel sectors.
None of these banks can claim to support the Paris Agreement, to be aligned with a 2° scenario or to be fighting climate change - as we too often read in their sustainability reports - if they continue to finance these destructive sectors."
The report's authors show that even after the climate talks in Paris last December, leading financial institutions have continued business as usual - investing in fossil fuels in direct contradiction to global consensus.
In just the past three years, these banks have sunk:
- $42 billion into companies active in coal mining
- $154 billion into the 20 largest coal-fired power producers
- $306 billion into companies that drill extreme oil
- $282 billion into companies building liquefied natural gas export infrastructure
Of the banks featured in our latest banking report :
- HSBC invested $1.46 billion between 2013-15
- Barclays invested $1.11 billion between 2013-15
- RBS invested $0.86 billion between 2013-15
- Santander invested $0.19 billion between 2013-15
In a statement on the BankTrack website, the campaign group added that:
"The report card does reflect bank movement on coal mining, where ten of the biggest U.S. and European banks committed to reduce funding for the coal mining sector in the last year.
Based on their ability to quickly switch their stance on coal over the last year alone, banks are capable of making the critical choice to cut out extreme fossil fuel investments. Not only can they do it, it is a critical step to follow through on promises made in Paris to stabilize the climate."
Discover how you can have fossil free personal finances in our guide to personal carbon divestment >