U.N. Secretary-General Antonio Guterres recently called on banks and other financial firms to stop financing the expansion of fossil fuels.
“For too long,” he said, “the financial services sector has enabled the world’s fossil fuel addiction. … The scientific and moral imperative is clear: There must be no new investment in fossil fuel expansion, including production, infrastructure and exploration.”
Read: ‘Don’t work for the climate wreckers’: U.N.’s António Guterres to 2022 graduates
Guterres adds to a growing chorus of voices — including the World Council of Churches, Muslim Council of Elders and New York Board of Rabbis, whose statement he was speaking in support of. He also broadly aligns with the Science-Based Targets Initiative meant to unify the reporting on greenhouse gas (GHG) emissions and other impacts, and the Oxford Sustainable Finance program.
They join the U.N.’s Intergovernmental Panel on Climate Change (in April), the International Energy Agency (in 2021), and a range of Indigenous and environmental advocates (over the last many years) in calling for an end to expansion of fossil fuels.
The direction of travel is unmistakable: to bend the curve toward a zero-carbon future, stopping the buildout of new fossil fuels must be the next step.
There’s a hard, undeniable fact driving this consensus: Potential emissions from fossil fuels already in production — the wells already drilled, the mines already dug — takes the world well past 2°C of average dangerous warming targeted at the Paris climate summit and the backbone target of most policy.
Even if coal went to zero tomorrow — which it is far from doing — in-production oil BRN00,
Banks have to stop financing expansion of fossil fuels. If they don’t, their net-zero commitments are greenwash. Those commitments largely target the direct pollution that banking operations, at branches, for instance, create. And some banking sector commitments have pulled financing from coal expansion and target renewable-energy projects.
(Editor’s note: JPMorgan Chase late last year signed a pledge to align its lending and investment portfolios with net-zero emissions by 2050, joining more than 40 rival financial firms in the Net-Zero Banking Alliance. JPM has pledged to ‘finance and facilitate’ more than $2.5 trillion over 10 years through the end of 2030 to advance long-term solutions that address climate change and contribute to sustainable development.)
Related: Banks are still working with oil and gas companies, despite joining climate pledge
It is in the best interest of all business and the global economy to stop fossil expansion and curb runaway climate change. Increasingly frequent and severe heatwaves, droughts, fires, storms and floods destroy value in sectors from real estate to agriculture DBC,
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A remarkably small group of bad actor corporations are driving fossil expansion and threatening the stability of the economy.
Just 20 oil and gas companies, including Saudi Aramco, Russia’s Gazprom RU:GAZP and ExxonMobil XOM,
The top lender is JPMorgan Chase JPM,
These are the top five companies in terms of bringing new oil and gas reserves online, and account for more than a third of projected expanded upstream supply. JPMorgan Chase’s support, which the bank targets for its oil and gas portfolio, saying it has a commitment to diverse investments, make a mockery of its rhetoric on climate.
Read: ‘They are lying. And the results will be catastrophic’: U.N. climate panel warns emissions pledges are not action
In recent weeks, CEO Jamie Dimon has doubled down on his support for expansion of fossil fuels. In March, he reportedly pushed President Biden to expand U.S. fracked gas production, and build out new liquefied natural gas infrastructure – despite new LNG terminals taking years to come online, making them useless for addressing immediate energy demand.
At the bank’s latest shareholder meeting, responding to a general question about fossil-fuel financing, Dimon cast doubt on whether the bank will meet even its current weak climate targets: “These goals set a high bar and are also subject to other prerequisites and considerations both within and outside of our control.”
Two weeks ago, a crucial constituency — the bank’s shareholders — helped put JPMorgan Chase on the right course. Investors Mercy and Harrington introduced a resolution calling on the bank to ensure that its financing does not contribute to the expansion of fossil-fuel supply.
For any investor with a broad portfolio, climate change is a clear and present threat to its holdings overall, and ending fossil expansion is an urgent imperative. The JPMorgan resolution garnered solid minority support, including from the New York state pension fund, which manages hundreds of billions of dollars. Similar resolutions found traction at Citi C,
Read: ‘Tectonic shift’ to green stocks: BlackRock chart looks beyond oil and gas earnings, momentum
More and more shareholders are rising up to their fiduciary duty in demanding banks make a just energy transition a reality by investing in renewable sources rather than expanding fossil fuels. Our portfolios depend on it.
Jason Disterhoft is senior climate and energy campaigner for the Rainforest Action Network, at RAN.org
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