Named and Shamed: the Banks Most Responsible for Increasing Global Warming
Protesters against coal investment outside Bank of America.
Can a city claim that it is working for sustainability if the bank it uses invests in the coal industry? A new report identifies the banks which contribute most to this climate-destroying activity, enabling public financiers to switch their business to clean banks.
According to the report, last year 92 leading banks provided at least €66 billion to the industry, a record year for financial support to the top 65 coal companies in the coal mining and power sectors.
BankTrack's 'Banking on coal 2014' report, published on behalf of the World Development Movement, also reveals that this figure is four times the amount invested in 2005.
Coal is the dirtiest of fuels, and the burning of it is responsible for much of our contemporary greenhouse gas emissions, contributing to global warming. According to the International Energy Agency, 44% of global emissions from fossil fuels come from coal. Since 2000, global coal production has grown by over 69% and now amounts to a staggering 7.9 billion tons annually.
And since 2005, when the Kyoto Protocol came into force, the installed capacity of coal-fired power plants has increased worldwide by 35%. Coal has been the fastest growing energy source for every year of the last decade.
Climate Action Tracker has recently produced evidence showing that phasing out coal by 2050 will be essential to successfully limiting dangerous temperature rises. According to the International Energy Agency investment worth $44 trillion up to 2050 are now needed to decarbonise the energy sector, a figure up a staggering 22% from the one it gave only two years ago. The more coal-fired power generation there is, the more expensive it becomes to decarbonise.
The new BankTrack research accompanies the launch of the 'Banks: Quit Coal' campaign that aims to pressure commercial banks to cut their ties with the coal industry and instead divert capital to clean energy and energy efficiency.
This new 'Coal banks' website provides extensive data about the banking industry's ongoing deep links with the coal industry, and gives everyone, including city leaders, an opportunity to directly encourage banks to finally end their coal financing.
It names the banks with the dirtiest hands: JPMorgan Chase, Citi, RBS and Barclays, as well as several Chinese banks and the Bank of America. The full list is below.
The hypocrisy of these banks is astonishing, as they profess to be doing the opposite of what they actually are. Here are some of their recent statements from annual reports, collected by BankTrack:
- The number 1 'coal bank' JPMorgan Chase claims it is: "Transitioning to a low carbon economy."
- The number 2 'coal bank' Citi insists that: "We have made tremendous progress in reducing our environmental footprint."
- The number 3 'coal bank' RBS believes it is: "Delivering a low carbon economy."
- The number 5 'coal bank' China Construction Bank is confident it is: "A low-carbon, environmentally friendly bank."
- The number 6 'coal bank' Bank of America acknowledges the climate change reality and its own responsibilities: "We agree that climate change is happening, society needs to transition from high-carbon to low-carbon energy, and the bank has a responsibility to accelerate this transition."
There has been some hope expressed today that because Chad Holliday, former chair of Bank of America, has been appointed as the new chairman of Royal Dutch Shell, then Shell might become a little more green than it has in the past. Shell has repeatedly come under fire from environmentalists over issues such as pollution of the Niger delta river in Nigeria or its Arctic drilling campaign after the company's huge rig run aground in Alaska last year.
According to Reuters Holliday is "widely credited for his sustainable energy vision". He previously headed the 10-member executive committee of the United Nations' and World Bank's Sustainable Energy for All initiative, launched in 2009. Yet one wonders how Holliday squared this position with his Bank's massive investment in fossil fuel industries?
Divestment is growing
The movement to divest from financing the fossil fuel industry is growing. In September the heirs to the Rockefeller oil fortune withdrew their funds from fossil fuel investments, withdrawing a potential $50bn ahead of the United Nations summit on climate change. Glasgow University became the first European University to divest from fossil fuels last month, and a number of Anglican Church dioceses are doing the same.
"The new BankTrack data issues a timely warning to the public and global decision-makers alike that rising coal financing, via banking giants like JPMorgan Chase, Citi and RBS as well as an increasing number of Chinese banks, continues to provide a vital lifeline to the increasingly beleaguered coal industry, while at the same time placing the planet in climate jeopardy," said Yann Louvel, BankTrack's Climate and Energy Campaign coordinator.
Alex Scrivener, policy officer at the World Development Movement, agreed: "Apart from two US banks, RBS and Barclays are the most responsible for providing finance to coal operations all over the world. Expanding coal isn't just a disaster for the climate, it's also responsible for all manner of injustice inflicted on communities in the global south who have been devastated by the impacts of mining. Barclays and RBS should be deeply ashamed to find themselves so high in these rankings. Any notion of 'ethical banking' is incompatible with financing an energy source like coal."
The 'Coal banks' data and campaign website resource is live at: www.coalbanks.org