Republican Claim That Big Us Banks Are 'Boycotting' Fossil Fuels Is Just Latest Flavor of Climate Denial

Today it was revealed that big US banks and asset managers communicated with West Virginia Treasurer Riley Moore and state officials in Texas to reassure them the banks were not restricting fossil fuel financing, despite having net-zero pledges. Two major US banks, Morgan Stanley and Goldman Sachs, cited their role as the top fossil fuel financiers in the US as evidence, according to documents revealed in a recent Reuters report. 

Read the Reuters article: In West Virginia, banks cite green criticism as red state credential

In response to the news, the Sierra Club and Rainforest Action Network issued the following statements:

“Wall Street banks are the largest funders of fossil fuels in the world. The bizarre notion that banks are ‘boycotting’ energy companies is just the latest flavor of climate denial cooked up by extreme politicians and their fossil fuel industry donors. It’s part of a broader attempt to prevent free-market businesses from addressing urgent climate-related financial risks,” said Ben Cushing, the Sierra Club’s Fossil-Free Finance campaign manager. “Financial institutions made net-zero commitments because of the very real risks to their bottom line posed by the climate crisis and the inevitable transition away from fossil fuels. But the actions they've taken so far are totally inadequate, so pressure will continue to grow for them to adopt credible transition plans. Grandstanding from Republican politicians like Riley Moore isn't going to change that.”

"Reuters' revelation about how Morgan Stanley presents itself to clients when it thinks no one is looking shows the shallowness of Wall Street banks' current climate commitments,'' said Laurel Sutherlin with Rainforest Action Network. "These desperate actions by pro-fossil fuel actors like West Virginia are totally disproportionate to the middling actions the banks have taken so far to distance themselves from dirty energy, but they can see the writing on the wall that an unstoppable movement is building to truly cut off the spigot of mass finance to fossil fuels."

BACKGROUND

According to documents provided to Reuters under a public records request, Morgan Stanley and Goldman Sachs referenced their inclusion in the Banking on Climate Chaos report released in March 2022, in response to inquiries by officials in West Virginia and Texas. Those inquiries come as part of a broader strategy by the fossil fuel industry and Republican state officials to challenge US banks and asset managers over their incorporation of climate-related financial risk considerations into their investment decisions.

The Banking on Climate Chaos was co-authored by Rainforest Action Network, Sierra Club, and several other climate advocacy groups. It is a comprehensive global analysis on fossil fuel banking that underscores the disparity between public climate and net-zero commitments made by banks versus the reality of their business-as-usual financing of the fossil fuel industry. 

It documents that in the six years since the Paris Agreement was adopted, the world’s 60 largest private banks financed fossil fuels with USD $4.6 trillion, with $742 billion in 2021 alone. Overall fossil fuel financing remains dominated by four U.S. banks, with JPMorgan Chase, Citi, Wells Fargo, and Bank of America together accounting for one quarter of all fossil fuel financing identified over the last six years.