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morgan stanley
Morgan Stanley Latest Wall Street Giant to Ditch Net-Zero Coalition
Earlier this week, Bank of America and Citigroup also said they were leaving the Net-Zero Banking Alliance.
Jan 02, 2025
On Thursday, the Wall Street titan Morgan Stanley became the latest financial institution to leave the Net-Zero Banking Alliance, a United Nations-convened group of banks committed to "aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050."
The defections keep piling up. Earlier this week, Bank of America and Citigroup said they were leaving the alliance, and earlier in December Goldman Sachs Group and Wells Fargo announced they were doing the same.
“We will continue to report on our progress as we work towards our 2030 interim financed-emissions targets,” Morgan Stanley told Bloomberg in an email.
While Morgan Stanley didn't offer an explanation for the exit, according to Reuters, financial firms have repeatedly found themselves in the crosshairs of some members of the GOP who argue that corporate efforts to limit fossil fuels run afoul of antitrust law.
Last summer, the Republican members of the House Judiciary Committee published a report accusing financial institutions colluding to impose "radical environmental, social, and governance (ESG) goals on American companies." Their probe was largely focused on another climate group, Climate Action 100+, which is made up of financial institutions who strive to engage companies they invest in on climate issues. That coalition has also experienced a number of defections.
In December, 11 GOP-led states sued three asset managers in federal court, arguing that the firms had "artificially constrained the supply of coal, significantly diminished competition in the markets for coal, increased energy prices for American consumers, and produced cartel-level profits" for the firms in violation of antitrust law.
Despite the stated goals of the Net-Zero Banking Alliance, Morgan Stanley and other firms who are a part of the alliance have remained a major financial life lines for fossil fuel companies.
According to a report published by a group of NGOs in 2023, 56 of the largest banks in the Net-Zero Banking Alliance—including Morgan Stanley—have provided nearly $270 billion in the form of loans and underwriting to more than 100 "major fossil fuel expanders," from Saudi Aramco to ExxonMobil to Shell.
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Analysis Details How Wall Street Underwriting Quietly Funnels Billions Into Fossil Fuels
"Underwriting is a huge missing piece of net-zero transition plans, allowing big U.S. banks to continue to help fossil fuel companies raise billions of dollars with limited scrutiny," said one campaigner.
Jul 24, 2023
A report out Monday sheds light on how big U.S. banks' underwriting of bonds and equities for polluting corporations constitutes a "hidden pipeline" for fossil fuel financing.
It's no secret that financial institutions play a leading role in driving the climate emergency. Since 2016, the year the Paris agreement took effect, the world's 60 largest private banks have provided more than $5.5 trillion in financing to the fossil fuel industry, flouting their pledges to put themselves and their clients on a path to net-zero greenhouse gas emissions as the window to avert the worst consequences of the intensifying climate crisis rapidly closes.
But banks' underwriting activities receive far less attention than their direct lending practices, even though both are instrumental in enabling fossil fuel expansion and must be reformed to rein in the industry most responsible for imperiling the planet's livability.
That's the key takeaway from a new analysis of Wall Street's participation in capital markets published by the Sierra Club's Fossil-Free Finance campaign.
"By only focusing on emissions reduction targets for their lending activities, banks are conveniently excluding half of their fossil fuel financing from their climate commitments."
"Banks play a vital role in capital markets," the report explains. "Acting as underwriters, they are the gatekeepers of fossil fuel companies: they advise companies issuing bonds and equities, hold the vital information on the issuer, and help market the instruments to investors disclosing only the necessary risk."
Since 2016, the six largest U.S. banks—JPMorgan Chase, Citi, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs—have provided more than $433 billion in lending and underwriting to 30 of the companies doing the most to increase fossil fuel extraction and combustion worldwide, the report notes. More than three-fifths (61%) of that financing comes from underwriting, with those half-dozen banking giants issuing $266 billion in new bonds and equities for the world's top 30 fossil fuel expansion firms.
Climate justice advocates have long criticized the concept of "net-zero" because, they argue, allowing planet-heating pollution to be "canceled out" via dubious carbon offset programs or risky carbon removal technologies is an accounting trick that doesn't guarantee the significant emissions cuts needed to avoid the climate emergency's most destructive impacts.
But even if one accepts the premise of net-zero, big U.S. banks' policies on the topic are misleading.
"Despite the importance of capital markets activities in helping fossil fuel companies secure new funding, banks focus primarily on lending, while downplaying the importance of underwriting, when setting their emissions reduction targets," the report says. "Banks are performing sleight of hand, distracting investors and regulators with net-zero transition plans that are half-finished, while continuing to funnel money to fossil fuel companies via capital markets with limited scrutiny."
In a statement, Adele Shraiman, senior campaign strategist with the Sierra Club's Fossil-Free Finance campaign, said that "without banks, fossil fuel companies cannot raise money through capital markets."
"By downplaying their role in capital markets and refusing to include facilitated emissions in their climate targets, big U.S. banks are intentionally sidestepping a major source of real-world emissions and making it impossible to meet their own net-zero commitments," said Shraiman.
According to the report: "Only three of the six major Wall Street banks include bond and equity underwriting in their sectoral emissions reduction targets—JPMorgan Chase, Goldman Sachs, and Wells Fargo. The remaining three banks have so far chosen to only apply emissions reduction targets to lending activities."
However, "even among those who have set emissions reduction targets that include underwriting, insufficient disclosures and lack of standardization make it difficult to understand how robust banks' facilitated emissions accounting methodologies are, and what progress they are making toward achieving their emissions reduction targets," the report adds.
In a blog post, Shraiman wrote that "banks don't want us to know all of the ways they help fossil fuel companies raise funds to continue building the pipelines, oil rigs, fracking wells, and coal mines that are destroying the climate and hurting communities."
"But investors, regulators, and customers around the world see through their duplicity," she continued. "We are demanding complete, robust, and transparent net-zero plans that cover all types of financing activities and will lead to real-world emissions reductions in line with our global climate goals."
"Banks don't want us to know all of the ways they help fossil fuel companies raise funds to continue building the pipelines, oil rigs, fracking wells, and coal mines that are destroying the climate."
Monday's report comes at a key moment in the fight to stop Wall Street from continuing to fund climate chaos.
As the Sierra Club observed, "Banks currently point to a lack of industry standards on underwriting to justify why they do not disclose or set targets for facilitated emissions." However, the industry-led Partnership for Carbon Accounting Financials is expected to release its updated methodology on accounting for and reducing facilitated emissions in the near future.
"Underwriting is a huge missing piece of net-zero transition plans, allowing big U.S. banks to continue to help fossil fuel companies raise billions of dollars with limited scrutiny," Shraiman said. "By only focusing on emissions reduction targets for their lending activities, banks are conveniently excluding half of their fossil fuel financing from their climate commitments."
"It's time," she added, "for the major Wall Street banks to adopt a robust and consistent methodology for accounting facilitated emissions, and take full responsibility for the climate impacts of their underwriting decisions."
The International Energy Agency has stated unequivocally that there is "no need for investment in new fossil fuel supply in our net-zero pathway."
After the Intergovernmental Panel on Climate Change released its latest assessment in March, United Nations Secretary-General António Guterres said that limiting temperature rise to 1.5°C is possible, "but it will take a quantum leap in climate action," including a ban on approving and financing new coal, oil, and gas projects as well as a phaseout of existing fossil fuel production.
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Climate Coalition Targets Big Banks and Insurance Giants With New Shareholder Campaign
"The planet is running out of time and the banks are running out of excuses," said climate leader Bill McKibben.
Mar 01, 2023
A coalition of more than 240 advocacy groups on Wednesday launched a "Shareholder Showdown" campaign in support of shareholder resolutions urging climate action and respect for Indigenous rights at major U.S. and Canadian banks and insurance companies.
According to campaign coordinator Stop the Money Pipeline, the resolutions—which were filed by investors including the New York City and state pension funds, Sierra Club Foundation, and others—would require banks and insurance companies to "phase out their financing of companies engaged in fossil fuel expansion, report on projects that could violate Indigenous rights, use absolute emissions rather than emissions intensity targets, disclose 2030 transition plans, and hold directors accountable at banks that are not aligned with 1.5°C pathways."
The resolutions were timed to precede the companies' annual general meetings.
"This campaign is called Shareholder Showdown because we're in for a real fight—we're up against some globally powerful institutions," Arielle Swernoff, Stop the Money Pipeline's U.S. banks campaign manager, explained in an opinion piece published Wednesday by Common Dreams. "But organized people can achieve anything, and together we will stop the flow of money to fossil fuels and climate destruction."
Bill McKibben, co-founder of the climate group 350.org, said in a statement that "the planet is running out of time and the banks are running out of excuses—everyone from the pope to the secretary-general of the [United Nations] have called on them finally to act with clarity and conviction to help with the planet's greatest crisis, and shareholders should demand no less."
Among the resolutions filed are:
- An Indigenous rights reporting requirement filed by Sisters of St. Joseph for Peace at Citigroup;
- An absolute emissions target disclosure mandate filed by New York City Comptroller Brad Lander and three city pension systems at Bank of America, Goldman Sachs, JPMorgan Chase, and Royal Bank of Canada; and
- Measures filed by As You Sow requiring JP Morgan Chase, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley to publicly disclose their 2030 plans for transitioning lending and investment portfolios away from fossil fuels.
" Climate change is an existential crisis that can overwhelm a person in scale and size, impossible to address," said Tara Houska of the Giniw Collective, an Indigenous women and two-spirit-led frontline resistance group fighting fossil fuel projects like Line 3 in Minnesota.
"Big bank shareholders possess an enormous amount of influence on the world's emissions," Houska added. "A roomful of people can impact the disastrous course we are currently on. No more lip service or empty greenwashing—we need action, now."
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Shareholder Showdown: The Most Important Climate Votes You’ve Never Heard Of
Without Wall Street cash, the world's most polluting companies wouldn't get the capital they need to finance their toxic expansion.
Mar 01, 2023
Today, a coalition of over 240 organizations across North America announced a new campaign on big banks and insurance companies: Shareholder Showdown. This spring, we’re calling for shareholders to step up and push major corporations to start taking the climate crisis seriously.
Every year, shareholder season runs from April to June. It’s the time of year when the country’s biggest corporations hold their annual general meetings, where shareholders vote on all sorts of proposals: how companies should be governed, who should be in charge, and how they should relate to climate, racial, and economic justice.
Shareholder activism has been a tried and true technique of progressive movement organizations for years. Labor unions, environmental activists, and human rights campaigners have won big change by combining filing shareholder resolutions with public pressure and grassroots campaigns.
This year, the climate movement is hoping to turn off the flow of Wall Street money to destructive fossil fuels. Investors have filed shareholder resolutions at the largest North American banks and insurance companies calling on the firms to phase out their financing of fossil fuel expansion, protect Indigenous rights, and stop greenwashing.
This campaign is called shareholder showdown because we’re in for a real fight – we’re up against some globally powerful institutions.
These resolutions are just one part of a multi-faceted campaign to stop the flow of money to oil, gas, and coal. Shareholder season is the time when all eyes are on Wall Street, and an opportunity for activists to call out big banks and insurance companies for their greenwashing, denialism, and continued support of climate destruction.
Wall Street matters in the climate fight because fossil fuel companies simply don’t have the cash on hand to build new coal mines, oil fields, refineries, or pipelines whenever they want. Like other businesses, they need to go to the bank for financing, often in the billions of dollars. Despite pledges to align their business models with the goals of the Paris Agreement, the six largest American banks – JP Morgan Chase, Citigroup, Bank of America, Wells Fargo, Morgan Stanley, and Goldman Sachs – have provided nearly $500 billion in lending and underwriting to the 100 corporations most aggressively expanding fossil fuel operations since 2016.
That’s billions to fossil fuel companies such as ExxonMobil, BP and Gazprom, the Russian state-owned oil company which is helping to finance the murderous invasion of Ukraine. It’s money to companies like Energy Transfer Partners, the operator of the Dakota Access Pipeline, Enbrige, the owner of Line 3 and Line 5, and GeoPark, which is drilling for oil on Indigenous lands in the Amazon.
Fossil fuel expansion isn’t just bad for our carbon budget – although according to the International Energy Agency, in order to have a fifty percent chance of limiting global warming to 1.5°C, we have to stop fossil fuel expansion now – it’s devastating to Black, Indigenous, and communities of color on the frontlines. Polluting fossil fuel infrastructure is disproportionately likely to be sited in communities of color, causing negative impacts such as heart disease, asthma, and cancer, poisoning land, air, and water, and disrupting community cohesion.
Without Wall Street cash, these companies wouldn’t get the capital they need to finance their toxic expansion.
That’s why this spring, climate activists are campaigning hard to get major investors such as pension funds, asset managers, and universities to vote yes on these climate and Indigenous rights resolutions. This vote isn’t like a regular election – they don’t need to pass with more than fifty percent to become policy. Even results in the teens and twenties send a strong signal to companies that people are ready for change. After all, what company would ignore the demands of one in five of its shareholders?
Activists are especially focused on pushing public pension funds, which are large, long-term investors, to vote yes, and it’s already paying off. After coming out publicly in favor of a series “no fossil fuel expansion” resolutions last year, New York City Comptroller Brad Lander filed resolutions at Bank of America, Goldman Sachs, JPMorgan Chase, and Royal Bank of Canada calling on the banks to use absolute targets to track their emissions, rather than the emissions intensity targets that allow them to put out greenwashing statements while insidiously increasing their investment in fossil fuels.
New Yorkers should be proud of their city for this leadership, but those of us in the Big Apple needn’t have all the fun – anyone who lives in a state or city with a public pension can get involved by calling or writing to their Treasurer’s office demanding they support these critical resolutions. People who have public pensions or are public sector employees, including educators, nurses, bus drivers, and administrators can reach out to their pension fund directly and demand that their retirement not be used to uphold Wall Street’s greenwashing and lies.
This campaign is called shareholder showdown because we’re in for a real fight – we’re up against some globally powerful institutions. But organized people can achieve anything, and together we will stop the flow of money to fossil fuels and climate destruction.Keep ReadingShow Less
Shareholder Resolutions Push Big Banks to Phase Out Fossil Fuel Financing
"Any climate commitment from a bank that is still financing fossil fuel expansion is greenwashing, pure and simple," said a Stop the Money Pipeline campaigner.
Jan 24, 2023
Taking aim at Wall Street banks financing the oil, gas, and coal extraction fueling the climate crisis, a coalition of institutional investors on Tuesday announced the filing of climate-related shareholder resolutions in an effort to force "more climate-friendly policies that better align with" the firms' public commitments to combating the planetary emergency.
In the resolutions, members of the Interfaith Center on Corporate Responsibility (ICCR) and Harrington Investments asked six banks—Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Citigroup, and Wells Fargo—to enact policies phasing out fossil fuel finance, disclose plans for aligning their financing with their stated near-term emissions reduction goals, and to set absolute end-of-decade emissions reduction targets for their energy sector financing.
Shareholders also filed climate resolutions at four companies—Chubb, Travelers, The Hartford, and Berkshire Hathaway—that insure fossil fuel projects.
"Each of the major banks has publicly committed to aligning its financing with the goals of the Paris agreement to achieve net-zero emissions by 2050, a target widely considered imperative to avoid catastrophic climate impacts and financial losses," ICCR said in a statement. "Scientific consensus shows that new fossil fuel expansion is incompatible with achieving net-zero by 2050, yet these banks continue to invest billions of dollars each year in new fossil fuel development—a fact corroborated by a new Reclaim Finance report released last week."
As Stop the Money Pipeline—a coalition of over 200 groups seeking to hold "financial backers of climate chaos accountable"—noted:
A slate of resolutions calling for policies to phase out financing for fossil fuel expansion was filed by the same investors at U.S. banks in 2022. They received between 9% and 13% support, which was a significant milestone for these first-of-their-kind proposals. This year's fossil fuel financing proposals have been updated to encourage banks to finance clients' low-carbon transition so long as those plans are credible and verified. The previous resolutions were supported by many major institutional investors, including the New York State and New York City Common Retirement Funds.
New in 2023 are the resolutions on absolute emissions reduction targets for energy sector financing filed by the New York City and New York State comptrollers, and the resolutions calling for disclosure of climate transition plans filed by As You Sow. The day before the resolutions were filed, Denmark's largest bank, Danske, announced a phaseout of corporate financing for companies engaged in new coal, oil and, gas development.
"Any climate commitment from a bank that is still financing fossil fuel expansion is greenwashing, pure and simple," Arielle Swernoff, U.S. banks campaign manager at Stop the Money Pipeline, said in a statement. "By supporting these resolutions, shareholders can hold banks accountable to their own climate commitments, effectively manage risk, and protect people and the planet."
Dan Chu, executive director of the Sierra Club Foundation—which led the filing at JPMorgan Chase—lamented that "all major U.S. banks continue to finance billions of dollars for new coal, oil, and gas projects every year. Such financing undermines the banks' net-zero commitments and exposes investors to material risks."
"These shareholder resolutions simply ask banks to align their promises with their actions and to adopt policies to phase out the financing of new fossil fuel development," Chu added.
Referring to a warning from the International Energy Agency, Kate Monahan of Trillium Asset Management—which spearheaded the Bank of America filing—said that "we will not be able to achieve the Paris agreement's goal of limiting warming to 1.5°C if banks continue to finance new fossil fuel exploration and development."
"Bank of America has publicly committed to the Paris agreement but continues to finance fossil fuel expansion with no phaseout plan, exposing itself to accusations of greenwashing and reputational damage," Monahan contended. " By continuing to fund new fossil fuels, Bank of America and others are taking actions with potentially catastrophic consequences."
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Despite Net-Zero Vows, Wall Street 'Climate Arsonists' Still Pumping Billions Into Fossil Fuels
"It is business as usual for most banks and investors who continue to support fossil fuel developers without any restrictions, despite their high-profile commitments to carbon neutrality."
Jan 17, 2023
Top banks in the United States and around the world have made a show of embracing net-zero emissions pledges, portraying themselves as allies in the fight against the global climate emergency.
But a new analysis published Tuesday by a group of NGOs makes clear that the world's leading financial institutions—including major Wall Street banks such as Citigroup, JPMorgan Chase, and Bank of America—are still pumping money into fossil fuel expansion, bolstering the industry that is primarily responsible for worsening climate chaos.
According to the report, 56 of the largest banks in the Net-Zero Banking Alliance (NZBA)—a coalition convened by the United Nations—have provided nearly $270 billion in the form of loans and underwriting to more than 100 "major fossil fuel expanders," from Saudi Aramco to ExxonMobil to Shell.
Additionally, 58 of the biggest members of the Net-Zero Asset Managers (NZAM) initiative—including the investment behemoths BlackRock and Vanguard—held at least $847 billion worth of stocks and bonds in more than 200 large fossil fuel developers as of September.
Both the NZBA and the NZAM are under the umbrella of the Glasgow Financial Alliance for Net-Zero (GFANZ), a campaign launched in 2021 with the goal of expanding "the number of net zero-committed financial institutions." Climate advocates have long argued that net-zero pledges are fundamentally inadequate to the task of stopping runaway warming.
"The science is very clear: we need to stop developing new coal, oil, and gas projects as soon as possible if we want to meet our climate goals and avoid a worst-case scenario," said Lucie Pinson, the executive director and founder of the watchdog group Reclaim Finance. "Yet, it is business as usual for most banks and investors who continue to support fossil fuel developers without any restrictions, despite their high-profile commitments to carbon neutrality."
"Their greenwashing is all the more damaging as it casts doubt on the sincerity of all net-zero commitments and undermines the efforts of those who are truly acting for the climate," Pinson added.
The groups found that the U.S.-based Wall Street giants Citigroup, JPMorgan Chase, Bank of America, Morgan Stanley, and Wells Fargo provided nearly $90 billion in total financing for fossil fuel expansion between the dates they joined the NZBA and August 2022.
Citigroup, which touts its net-zero commitments on its website, led the pack with $30.5 billion in fossil fuel financing from April 2021 to August 2022.
"The U.S. financial sector cannot be taken seriously on climate change until it stops investing in new fossil fuel projects," said Adele Shraiman, a representative for the Sierra Club's Fossil-Free Finance campaign. "We need an urgent transition to a green economy and the financial sector must help deliver that."
Overall, according to the new report, "229 of the world's largest fossil fuel developers received finance from the 161 GFANZ members covered... which will support them to develop new coal power plants, mines, ports, and other infrastructure, as well as new oil and gas fields and pipelines and LNG terminals."
"These new fossil fuel projects are incompatible with the objective of limiting global warming to 1.5°C, as confirmed in the latest International Energy Agency's World Energy Outlook published in October 2022," the report states. "They will lock in greenhouse gas emissions for decades, despite the adoption of decarbonization targets by some GFANZ members."
Paddy McCully, a senior analyst at Reclaim Finance, said in a statement that "GFANZ members are acting as climate arsonists."
"They've pledged to achieve net-zero but are continuing to pour hundreds of billions of dollars into fossil fuel developers," said McCully. "GFANZ and its member alliances will only be credible once they up their game and insist that their members help bring a rapid end to the era of coal, oil, and fossil gas expansion."
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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.
Nov 09, 2022
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 1.5degC, 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, Citigroup, 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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Biden Treasury Urged to Act as US Banks Help Big Oil 'Torch Our Planet'
"Until Wall Street firms are held to account," says a new letter, "no amount of investment in renewables can credibly undo the damage that their fossil fuel financing does to the climate."
Nov 02, 2022
An analysis of the financial sector's net-zero emissions commitments out Wednesday reveals that the six biggest U.S. banks' climate pledges and actions fall far short of what's needed to stave off catastrophic levels of planetary heating, prompting dozens of progressive groups to call on the Treasury Department to take steps to ensure a swift and just clean energy transition.
"2030 targets should be based only on actual emissions reductions, and not rely on carbon removal or offsets."
Published just days before the Net Zero Banking Alliance (NZBA) is expected to release an update on its members' progress toward their net-zero commitments at the United Nations COP27 climate summit, a new report by the Sierra Club's Fossil-Free Finance campaign sheds critical light on the targets and policies of a half-dozen U.S. banks--JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs.
Although all six banks have pledged to reach net-zero financed emissions by 2050, they continue to dump trillions of dollars into expanding fossil fuel extraction, jeopardizing the future of humanity and making a mockery of their purported commitments. Climate justice advocates have long argued that the pursuit of "net-zero" is flawed because it is "premised on the notion of canceling out emissions in the atmosphere rather than eliminating their causes."
Despite repeated warnings from climate and energy experts that new fossil fuel projects are incompatible with limiting global warming to 1.5degC above preindustrial levels, U.S. banks remain the world's biggest backers of coal, oil, and gas production. Chase, Citi, Wells Fargo, and Bank of America alone are responsible for roughly a quarter of the $4.6 trillion in global fossil fuel financing since the 2015 adoption of the Paris agreement.
"The science is clear that in order to reach net-zero by 2050--and help steer the world away from climate disaster--banks must stop funding fossil fuel expansion," Adele Shraiman of the Sierra Club's Fossil-Free Finance campaign said in a statement. "But big U.S. banks have fallen far behind the best practices of their global peers, setting only weak targets and policies riddled with loopholes that allow billions of dollars in new fossil fuels projects each year."
As part of their 2050 pledges, Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs have established interim emissions reductions targets for 2030 in two key polluting industries: oil and gas and power generation.
According to the report, "All six major U.S. banks' 2030 targets fall well short of what scientists say is needed in order to actually meet the goal of net-zero emissions by 2050, though some are doing significantly better than others."
In order for their end-of-decade goals to be credible and robust, the Sierra Club's Fossil-Free Finance campaign urges financial institutions to develop stronger targets that:
- Disclose methodology and high-quality data;
- Cover both lending and underwriting; and
- Use a carbon dioxide equivalent metric to assess and reduce multiple sources of greenhouse gas pollution, including methane;
- Measure and pursue "absolute emissions reductions" rather than "intensity-only emissions reductions," which are relative to total dollars financed or units of energy produced and therefore allow for an increase in fossil fuel financing; and
- Cover the entire oil and gas supply chain--including emissions generated in scopes 1, 2, and 3--to prevent the bankrolling of pipelines, export terminals, and tankers.
Notably, the report states that "the most ambitious 2030 targets should be based only on actual emissions reductions, and not rely on carbon removal or offsets."
In addition to setting emissions reductions targets, Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs have also created so-called "exclusion policies," which are intended to "delineate which types of projects they will finance within the fossil fuel industry," the report explains.
According to the report, policies guiding the six banks' financing decisions in key sub-sectors, including coal, and high-risk geographies, such as the Arctic, fall "seriously short of what is needed to meet global climate goals."
As the Sierra Club explained, "The vast majority of bank financing for oil and gas is in general corporate financing, not project financing, meaning that exclusion policies focused on project financing allow the banks to continue pouring billions into fossil fuels in places like the Arctic and in dirty energy sources like coal."
The report makes two key recommendations:
- At minimum, all six banks should tighten their Arctic exclusion policy to restrict corporate financing for any company expanding in Arctic oil and gas production, and broaden their definition of 'Arctic' in order to ensure more complete coverage; and
- A robust exclusion policy for coal mining companies should restrict financing for companies that derive over 20% of their revenue from coal mining, with the ambition of gradually decreasing this threshold over time. It is essential that the policy not only apply to new clients, but to existing clients as well.
"The yawning chasm between the stated climate commitments of the big U.S. banks and their actual policies and targets lies in sharp contrast to the increasingly robust fossil fuel policies of many large European financial institutions," said Paddy McCully, senior analyst at Reclaim Finance. "U.S. banks should follow the lead of their European peers, rather than continue with the anti-science fallacy that expanding fossil fuel production is in any way compatible with a livable climate."
Soon after the Sierra Club published its report detailing how "all six big U.S. banks are severe laggards when compared to the best practices set by some of their international counterparts," it joined more than 70 other advocacy organizations in sending a letter imploring Treasury officials to "clearly and publicly communicate that it expects financial firms to rapidly transition their business to support and advance a green economy."
"Until Wall Street firms are held to account," says the letter, "no amount of investment in renewables can credibly undo the damage that their fossil fuel financing does to the climate, to U.S. climate leadership, and to our chances of meeting the goals of the Paris agreement."
Signatories, who requested an immediate meeting between Treasury officials and key frontline groups, said the department's expectations should include:
- Direction to financial firms that the transition plans they are developing relate not only to their own transition risks, but also to risks banks pose to the health of our planet-health necessary for the health of other financial entities and the financial system. Transition plans must be aligned to credible scientific scenarios, not just aligned to the needs of the institution creating the plan.
- Transition plans must be consistent with achieving a rapid phase-out of fossil fuels and deforestation and include the following: an immediate end to financing for fossil fuel expansion; a complete exit from sectors such as coal mining, coal power, tar sands oil, extractive industries in the Arctic and Amazon, fracked oil and gas, offshore oil and gas, and liquified natural gas; and a phase-out of all financing for existing fossil fuel projects and companies.
- Clarification to banks that net-zero plans cannot rely on forest offsets, unproven carbon capture and storage technologies, and removal and trade schemes to "compensate"--falsely--for a lack of emissions reductions.
- Support for a precautionary approach to managing climate-related financial risk, as the uncertainty inherent in the effects of the climate crisis make it unsuitable for managing via risk modeling and quantification alone.
- Guidance to ensure banks adopt strong, binding policies to respect Indigenous peoples' right to sovereignty and self-determination. Guidelines must make clear that financial firms have a responsibility to ensure that corporations both consult and obtain the consent of potentially impacted Indigenous communities before any proposed activity occurs on community lands.
" Climate change is not a far-off threat--it's impacting communities and our economy now," the letter continues. "Treasury plays a critical role in fulfilling the goals of President [Joe] Biden's executive order on climate-related financial risk and ensuring that financial institutions' net-zero goals are achievable and reduce greenhouse gas emissions without relying on false or unproven solutions."
As Public Citizen, one of the groups behind the letter, made clear, "the critical need for Treasury to act is underscored by actions of the Texas attorney general and other Republican attorneys general" who--as part of a broader GOP push to pressure financial institutions to keep supporting the fossil fuels driving the climate emergency--recently launched a probe into the involvement of Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs in the U.N.-backed NZBA.
Akiksha Chatterji, lead campaigner at Positive Money U.S., said that "as COP27 approaches, financial institutions continue to torch our planet and devastate communities all around the world by pouring billions of dollars into fossil fuels and deforestation, leaving those least responsible for the crisis to pick up the bill."
"We need an all-hands-on-deck approach to rein in Wall Street's destructive and dangerous behavior," said Chatterji. "The Treasury must make clear that it expects financial institutions to immediately stop funding oil and gas expansion, and start supporting clean energy and green jobs instead. Treasury must also meaningfully engage with the communities and groups most impacted by the climate crisis and the predatory actions of big finance, and reflect their concerns in policy decisions."
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Activists Call Fed Pilot Program to Assess Banks' Climate Risk a 'Welcome First Step'
"To truly safeguard financial stability," said one campaigner, "the Fed must further introduce policies that reflect the high risk of fossil fuel investments."
Sep 29, 2022
Members of the Stop the Money Pipeline coalition on Thursday welcomed a U.S. Federal Reserve pilot program to study banks' exposure to climate risks while warning that more robust action from the Fed and the nation's banking system is needed to rein in Wall Street's fossil fuel funding.
"Big banks still pour billions into fossil fuels, ignoring the serious risks posed by climate change and threatening the savings of everyday Americans in the process."
According to the Fed, the "pilot climate scenario analysis exercise," which will begin early next year, is "designed to enhance the ability of supervisors and firms to measure and manage climate-related financial risks" amid a worsening planetary emergency fueled, in part, by the policies and activities of central and commercial banks.
Six of the biggest U.S. banks--Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo--will participate in the program, which "is exploratory in nature and does not have capital consequences."
Akiksha Chatterji, lead campaigner at the advocacy group Positive Money U.S., said in a statement that "the new climate scenario exercise is a welcome first step and indicates that the Fed is finally beginning to take climate risks seriously, after lagging behind international counterparts."
"Climate scenario analysis is a useful exercise to assess some of the serious risks that climate change poses to financial institutions, but we need the Fed to move from exploring to acting," Chatterji added. "We have enough information about the dangers of climate change to justify regulatory and supervisory action now, such as penalizing banks' excessive and reckless fossil fuel lending. To truly safeguard financial stability, the Fed must further introduce policies that reflect the high risk of fossil fuel investments."
The pilot program comes as the world's 100 largest banks are on pace to set new commodity trading profit records this year amid soaring food and energy prices--even as many millions of people face starvation--and as financial institutions keep pouring billions of dollars into fossil fuel investments, despite deceptive net-zero pledges.
Earlier this month, the Stop the Money Pipeline coalition--which includes more than 200 advocacy groups--launched a new "Blame Wall Street" campaign aimed at holding banks that have invested more than $1 trillion in oil and gas projects in recent years.
Responding to the new Fed program, Adele Shraiman, campaign representative for the Sierra Club's Fossil-Free Finance campaign, said that "the climate crisis already affects financial institutions and the broader economy, but banks are seriously unprepared to respond and adapt."
"In fact, big banks still pour billions into fossil fuels, ignoring the serious risks posed by climate change and threatening the savings of everyday Americans in the process," she continued.
"As the country's most powerful financial regulator, the Federal Reserve is finally sending a strong signal to banks to start taking climate risk seriously and prepare for the clean energy transition," Shraiman added. "This is a promising first step in the urgent effort to rein in Wall Street's dangerous and reckless behavior and protect our financial system from a climate-driven economic crash."
Emily Park, senior organizer at the climate action group 350.org's Fossil-Free Fed campaign, said her group was "excited to learn about the pilot climate scenario risk analysis exercise with the Fed and six of the U.S.' largest banks."
"While we applaud this first step, it's not enough," Park stressed. "Hurricane Ian is showing us that the American economy and the American people can't wait any longer for stronger action from the Fed and the U.S. banking system. We need the Federal Reserve to do more. Now."
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New 'Blame Wall Street' Campaign Launched as Climate Emergency Grips Planet
"These companies could stop the flow of money to fossil fuels today, but they are choosing greed instead," said organizers with the Stop the Money Pipeline coalition.
Sep 01, 2022
Hundreds of organizations announced plans on Thursday to launch a mass mobilization this fall aimed at holding accountable those that allow destructive fossil fuel extraction to continue, specifically the Wall Street banks that have poured more than $1 trillion into oil and gas projects in recent years.
The Stop the Money Pipeline coalition, which includes more than 200 climate action groups, called on people across the U.S. to join "Blame Wall Street" public actions that are already planned in New York, Los Angeles, San Francisco, and other cities where campaigners will "connect the dots between the extreme weather events harming communities and the corporations fueling the climate crisis."
"There are plenty of people to be angry at: fossil fuel companies, which exist to make massive profits off of poisoning our air, water, and planet," Alec Connon and Arielle Swernoff, organizers with Stop the Money Pipeline, wrote at Common Dreams Thursday. "Politicians, who are bought and sold by wealthy tycoons, and whose climate policy--years in the making--was still riddled with giveaways to the fossil fuel industry. And finally: Wall Street."
As the Rainforest Action Network showed in a report released earlier this year, since the Paris climate agreement was forged in 2015, JPMorgan Chase has invested $382 billion in fossil fuel projects. Citigroup is the second-largest funder of oil and gas extraction, pouring $285 billion into projects, and Wells Fargo follows close behind at $275 billion.
Bank of America, Barclays, TD, and Morgan Stanley are also part of what the report labeled the "Dirty Dozen" and are among the banks Stop the Money Pipeline will target with their "Blame Wall Street" campaign this fall.
Fossil fuel companies also rely on insurance to build their infrastructure, and BlackRock and Vanguard are two of the largest investors in oil and gas projects, Connon and Swernoff wrote.
"These companies could stop the flow of money to fossil fuels today, but they are choosing greed instead," they said. "When we look around at the devastation caused by heat, flooding, hurricanes, and climate disaster, and we think about who to blame, Wall Street should sit at the top of the list."
This fall, the Stop the Money Pipeline will welcome anyone concerned about the climate crisis, extreme weather like the monsoons that recently caused unprecedented flooding and killed more than 1,000 people in Pakistan, and the fossil fuel investments made by banks that millions of Americans rely on to join or organize public actions across the country.
"Wherever you live--and regardless of whether you're new to activism or have been organizing for years--we want to support you in organizing to hold the funders of climate chaos accountable," wrote Connon and Swernoff, noting that Stop the Money Pipeline will be offering training and 1:1 coaching for anyone new to organizing.
Although Pakistan is responsible for just 0.3% of greenhouse gas emissions in the Earth's atmosphere, they said, it is currently suffering a humanitarian disaster induced by the fossil fuel-driven heating of the planet.
Catastrophes like Pakistan's, Europe's historic drought, and the drying-up of China's rivers and lakes "are happening because of a political and economic system designed to make some (mostly white, mostly male) people exceptionally rich from extracting and burning fossil fuels, while the rest of the world is left to suffer," wrote Connon and Swernoff.
"It's time to get angry, take to the streets, and hold those responsible for the climate crisis responsible," they wrote.
The coalition is also planning to hold an organizing call on September 7 to explain how advocates can organize "Blame Wall Street" demonstrations in their own communities.
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