September, 23 2021, 02:59pm EDT
Bank of America Renews Funding for Line 3 Pipeline Company While Sponsoring New York Climate Week
The "sustainability-linked" loan demonstrates serious greenwashing loopholes in private sector climate pledges ahead of COP26.
WASHINGTON
The theme of this year's New York Climate Week is "getting it done." However, one of the event's corporate sponsors, Bank of America (BofA), just closed a deal this week to underwrite a new CAD $1.5 billion bond for Enbridge Inc. Enbridge is infamous as the company building the Line 3 tar sands pipeline and reimbursing Minnesota law enforcement for cracking down on unarmed Indigenous water protectors. Enbridge is also a part owner of the Dakota Access Pipeline.
"Bank of America's client, Enbridge, has paid out over $2M to local law enforcement here in my people's territory," said Tara Houska, Giniw Collective, "We've been tortured, shot at, maced, and jailed. Over 800 arrests and gross human rights violations alongside the irrevocable harm to our land, our water, our wild rice. To call any part of this tar sands company 'sustainable' is unconscionable. To fund its destruction of what ecosystems remain against the will of multiple tribal nations is abhorrent."
Bank of America is the only US-based bank underwriting the bond. The majority of the bond is "sustainability-linked," meaning Enbridge will face increased interest rates if it does not meet goals set for itself, described below.
Alison Kirsch, Research and Policy Manager at Rainforest Action Network who has been tracking commercial bank financing of Enbridge says, "For Bank of America to provide new financing for Enbridge as the company puts the final touches on Line 3 - despite Indigenous opposition and the increasingly urgent need to end fossil fuel expansion - is unconscionable in any context. But the fact that this bond is billed as 'sustainability-linked' rubs salt in the wound. Bank of America's underwriting of this bond means sanctioning Enbridge's greenwashing and committing climate trickery of its own, as it continues to finance fossil fuel expanders despite a net zero emissions pledge."
The smoke and mirrors of sustainability
CAD $1.1 billion of the Enbridge bond is "sustainability-linked," meaning Enbridge must achieve self-imposed goals or face higher interest rates in five or ten years. These targets include a 35% reduction in greenhouse gas intensity of Scope 1 and Scope 2 emissions relative to 2018 by 2030. If greenhouse gas intensity doesn't sound like greenhouse gas emissions, that's because they are completely different.
Decreased greenhouse gas intensity is entirely compatible with increased emissions. That's why advocates have raised the alarm bells about this trickery straight out of the oil industry playbook. Furthermore, Scope 1 and Scope 2 refers only to the intensity of emissions that come from the company's operations--not the tar sands oil flowing through the Line 3 pipeline that will emit the greenhouse gas equivalent of 50 new coal-fired power plants.
Other banks underwriting the bond are Bank of Montreal, CIBC, National Bank Financial, RBC, Scotiabank, TD, ATB Financial, Desjardins, and HSBC.
Sustainability commitments versus actions
On the New York Climate Week website, BofA's profile reads that in 2021, the company "set a $1.5 trillion sustainable finance goal by 2030 to deploy, mobilize and scale capital for both environmental transition and social inclusive development purposes."
According to a report by Rainforest Action Network, just last year BofA poured USD $42 billion into fossil fuels and has shoveled a total of nearly USD $200 billion into the fossil fuel sector in the five years after the Paris Climate Agreement was adopted in 2015. BofA's top ten fossil fuel clients since Paris include Exxon, Occidental, Marathon Petroleum, BP, Southern Co, Chevron, Pemex, Petrobras, and ConocoPhillips.
Enbridge and Energy Transfer--two of the companies behind the Dakota Access Pipeline--come in at #11 and #14, respectively. Many of BofA's fossil fuel clients have committed to minor reductions in the carbon intensity of their upstream operations while planning massive expansion of oil and gas extraction. BofA's acceptance of its client's carbon intensity targets amounts to a fig leaf for the bank to continue business-as-usual fossil fuel financing. If BofA continues to encourage and endorse deals like this greenwashed "sustainability-linked" bond issued by Enbridge, frontline communities and the fate of our planet remain in grave danger.
"In Canada, the Minister of Environment recently claimed the government-owned Trans Mountain Pipeline expansion project currently under construction is necessary to help pay for the country's climate reduction targets. At the same time, all of Canada's largest banks continue to offer the worst climate criminals like Enbridge 'sustainability-linked' loans for their operations. We're seeing the tar sands industry ramp up production while being labeled as sustainable. This kind of climate denial from the public and private sector is dangerous and seeing it creep across borders is disheartening and shows that we are moving in the wrong direction at a time when bold climate action is imperative," said Evelyn Austin, Banking on a Better Future, Divest Canada.
"With the construction of their Line 3 tar sands pipeline, Enbridge is trampling on the rights of Indigenous people, destroying critical clean water resources, and exacerbating the climate crisis," said Sierra Club Fossil-Free Finance Campaign Manager Ben Cushing. "Bank of America should be ashamed of their continued support for this disastrous project."
"In the five years since the Paris Agreement was signed, Bank of America has provided $199 billion in financing to the fossil fuel industry. That's more than the sharemarket value of Chevron," said Alec Connon, Stop the Money Pipeline Coalition Coordinator. "Having a company that is so centrally complicit in the climate crisis sponsor NY Climate Week undermines the entire event."
"Once again, we are seeing a major bank fail to make good on their half-baked climate pledges. BOA's backing of Enbridge along with a host of Canadian banking laggards like RBC is a disgrace and pure greenwash. It is time for banks to stop hiding behind so-called sustainable financing in an attempt to counteract their continued investments in fossil fuel companies expanding oil and gas production and building new pipelines. You cannot claim to be taking climate seriously while financing violations of Indigenous rights and environmental degradation," said Richard Brooks, Director of Climate Finance, Stand.earth
The Stop the Money Pipeline coalition is over 160 organizations strong holding the financial backers of climate chaos accountable.
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