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Demonstrators protest Chase and Wells Fargo's complicity in the climate emergency in Newark, New Jersey on April 21, 2022. (Photo: Dave Kotinsky/Getty Images for Dayenu)

US Mega-Banks Behind 1/3 of Climate-Destroying Oil and Gas Expansion: Report

"The outsized role of Wall Street in driving fossil fuel expansion globally is deeply alarming," said one expert.

Brett Wilkins

Wednesday is Finance Day at COP27, the United Nations climate summit in Sharm El-Sheikh, Egypt, and the advocacy group Rainforest Action Network published a report exposing how major U.S. banks are financing hundreds of billions of dollars worth of fossil fuel projects—even as they tout their purported commitment to a low-carbon future.

"Global banks' top fossil fuel clients amount to a rogues' gallery of bad actors."

"The world's climate and energy scientists have set forth a clear mandate: In order to maintain a livable planet and prevent the global average temperature from increasing more than 1.5°C, we must rapidly and dramatically decrease greenhouse gas emissions," the RAN report—entitled Wall Street's Dirtiest Secret: How Fossil Fuel Expansion Depends on Big Bank Finance—states.

"To meet this goal, the vast majority of oil, gas, and coal must stay in the ground," the publication continues. "We must phase out production of some oil and gas reserves before they are fully exploited. We must stop building new infrastructure that relies on fossil fuels."

The paper notes that "the top six U.S. banks financed $445 billion to the top 100 companies expanding in oil, gas, and coal globally since the Paris climate agreement," and that financing from the institutions—JPMorgan Chase, Bank of America, Citi, Wells Fargo, Morgan Stanley, and Goldman Sachs—"accounts for a whopping 33% of the funding provided" to the world's 60 leading banks, as determined by their assets.

According to the report:

Fossil fuel expansion is an important litmus test for the seriousness of banks' climate commitments. In 2021, over 100 banks signed on to the Net-Zero Banking Alliance, thereby committing to achieving net-zero emissions by 2050, transparent emissions reporting, and interim targets for a transition to a low-carbon future. But virtually every single one of the world's top banks by assets continues to fund fossil fuel expansion.

Many banks justify business-as-usual financing to their fossil fuel clients by assuring the public that they are working with their clients to transition away from fossil fuels. But global banks' top fossil fuel clients amount to a rogues' gallery of bad actors. The clients—including Exxon, Saudi Aramco, BP, Shell, and TotalEnergies—not only are not transitioning away from fossil fuels, these companies are some of the world's biggest expanders.

RAN research manager April Merleaux said in a statement that the report shows "exactly how much the top U.S. banks contribute to the expansion of fossil fuels."

"Companies aiming for a sustainable future must reconcile their aspirations with their profit motives," she added. "Banks say a lot, but unless their financial actions are drastically altered we can't take them seriously when it comes to climate. Billions must be invested in a just transition, not in polluters' endless expansion of fossil fuels and their short-term profits."

The new report is endorsed by groups including Giniw Collective, Indigenous Environmental Network, Mazaska Talks, BankTrack, Healthy Gulf, Louisiana Bucket Brigade, Oil Change International, Reclaim Finance, Sierra Club, the Sunset Project, Urgewald, and the Vessel Project of Louisiana.

Paddy McCully, senior analyst at Paris-based Reclaim Finance, said in a statement that "the outsized role of Wall Street in driving fossil fuel expansion globally is deeply alarming."

"U.S. banks lack policies even to stop finance to the companies expanding coal mines and power—while globally more than 40 banks, investors, and insurers have already stopped financing coal developers," McCully added. "Given the U.S.' historic responsibility for CO2 levels in the atmosphere, climate justice means that the U.S. financial sector must lead a massive redirection of funding from fossil fuels to clean energy."

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