FOR IMMEDIATE RELEASE
September 21, 2022
Media contact: Jackie Fielder, jackie@stopthemoneypipeline
Climate groups excoriate banks for threatening to abandon climate commitments; bank CEOs grilled in Congressional hearing
Today Financial Times, Reuters and Bloomberg reported that JPMorgan Chase & Co., Morgan Stanley, Bank of America and other unnamed US banks are threatening to leave the Glasgow Financial Alliance for Net Zero over strengthened criteria that would hamper and limit their fossil fuel financing. The new criteria are a part of the Race to Zero initiative, the UN-backed global campaign rallying non-state actors to take rigorous and immediate action to halve global emissions within this decade. This presents a major internal crisis for GFANZ, whose co-chairs Mark Carney and Michael Bloomberg are speaking today at a Race to Zero and Resilience Forum in New York.
The protest from banks comes after Bloomberg, Carney, and GFANZ vice chair Mary Schapiro issued a statement calling all members to end financing of new coal projects. In a report published on Monday by Reclaim Finance, major US banks were exposed for pumping billions of dollars into companies that are developing new coal mines, plants, and infrastructure.
CEOs testify before House Financial Services Committee
The threats also come as bank CEOs of Bank of America, JPMorgan Chase, Citigroup, Wells Fargo & Company, and U.S. Bancorp testified before the House Financial Services Committee. At the hearing, Rep. Brad Sherman cornered J.P.Morgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser on both banks’ extant ties to Russian fossil fuel companies.
Forbes reported: Rep. Brad Sherman (D-Calif.) sparred with JPMorgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser over whether the banks have cut ties with Russian energy companies Gazprom and Vitol, with Fraser saying Citigroup is working on a plan to reduce the company’s “exposure” in Russia.
— Stop the Money Pipeline (@StopMoneyPipe) September 21, 2022
Rep. Sean Casten also asked J.P.Morgan Chase & Wells Fargo CEOs about their sponsorship of the State Financial Officers Foundation (clip here). SFOF, the Koch & ALEC aligned alliance organizing Republican State Financial Officers whose demands contradict the realities of climate financial risk. The CEOs’ yielding responses left the door open for the banks to cancel their sponsorships. Rep. Tlaib had the final statement on the issue of fossil fuel finance and said, “If your financial institutions are going to follow through on your own net zero commitments, then regulators, including the Federal Reserve and Congress must step in and make them.”
Members of Stop the Money Pipeline coalition responded to the day’s news:
“Banking executives find it immoral for banks and shareholders to face legal risk for funding climate destruction?” asked Tara Houska, Giniw Collective. “What’s immoral is continuing to prop up the fossil fuel industry despite the science, climate disasters, gross human rights violations and destruction of what remains. We have one home.”
Beau O’Sullivan, senior strategist of Bank on our Future, said, “The penny has dropped that banks actually need to phase out fossil fuels and direct funding for clean energy to be credibly net zero, and they can’t just greenwash their way through it. It’s curious that US banks raise legal concerns now just as ambitions are raised: they would do well to remember that they only face legal risks if they have no intention of meeting their climate commitments. GFANZ leadership needs to hold firm, tighten requirements, and lead an alliance that will genuinely and authentically play its part in averting climate catastrophe. At the same time, governments need to regulate the banks funding fossil fuel expansion – voluntary initiatives won’t cut it on their own.”
Richard Brooks, Climate Finance Director of Stand.earth said, “US banks need to stop whining like babies, threatening to quit when the going gets tough. Communities around the world are experiencing climate chaos – and banks are enabling this through financing billions in fossil fuels. Climate justice and science are clear: business-as-usual needs a total overhaul. Standards of global initiatives like GFANZ can’t be weakened just because the likes of JPMorgan Chase and Bank of America refuse to step up. Rather, it’s time to enforce, via regulation, that banks cut fossil fuel financing once and for all. This greenwashing is a dangerous delay.”
“If these banks are truly worried that their voluntary commitments may not be backed up by robust government action on climate change, then they should be actively advocating for government action. Instead, these banks are trying to pass the blame for their continued investments into fossil fuels and the other industries destroying the climate, forests, and communities. For those of us who do want to ensure a liveable planet for all, we must not back down on our demands for an immediate phase out of fossil fuel finance,” said Moira Birss, Climate Finance Director of Amazon Watch.
“The biggest fossil financiers in the world are panicking because they might have to stop greenwashing and actually meet their decarbonisation commitments. Climate-fuelled disasters are uprooting and devastating communities across the world, and it’s getting worse. It’s time for big banks like JP Morgan Chase to put their money where their mouth is and phase out financing for all new coal, oil and gas projects. Because voluntary commitments are clearly insufficient, it’s imperative that GFANZ leaders hold the course and solidify strong requirements to stave off the worst impacts of climate change,” said Akiksha Chatterji, Campaigner with Positive Money US.
“Last year the world’s major banks seized a historic opportunity to finance a decarbonized future. US banks finance the fossil fuel industry the most, so it gave the world some hope that they would be more responsible. They owe it to their customers, to their shareholders, and to themselves not to back down now. Banks must take the very real risks of climate chaos seriously. They must stop financing fossil fuel expansion, and they must make those commitments public. Communities ravaged by climate disasters are counting on it. GFANZ was a first step. Banks cannot back down now,” said Ruth Breech, Climate and Energy Campaigner of Rainforest Action Network.
“By withdrawing from GFANZ and diluting international standards aimed at averting the climate crisis, Wall Street banks will only increase the risk of being sued by their shareholders and customers, and penalized by regulators. Banks appear to be hiding behind the current Republican anti-ESG rhetoric to justify their continued financing of fossil fuels. But they will not be able to evade accountability for the environmental and human rights harms caused by their financing, which are becoming more evident and costly by the day,” said Hana Heineken, Senior Attorney at Center for International Environmental Law
“It would be disconcerting for US Banks to withdraw from the broadest financial industry effort yet on climate,” said Mary Cerulli, Executive Director of Climate Finance Action. “The goal of GFANZ has always been to add methodological rigor to climate pledges and accelerate the transition to a net zero economy. It should be no surprise that GFANZ is focused on decarbonize lending portfolios starting with phasing out new coal, oil and gas projects. That’s just what’s required to limit global warming to 1.5 degrees C. We need banks to deliver on their commitments and governmental policies to ensure the energy transition happens as quickly as is feasible.”
The Stop the Money Pipeline coalition is a coalition of more than 230 organizations working to hold the financial backers of climate chaos accountable.