Awareness around the devastating effects of climate change has been growing dramatically, leading to countless global initiatives to combat it. However, the global polluters that contribute the most to climate change continue to receive literally trillions of dollars in funding from world banks, most of which are household names. For example, since the 2015 Paris Agreement, the world’s biggest banks as a whole have poured $2.7 trillion into the oil and gas industries, with JPMorgan Chase responsible for about 10% of that. If, as an investor, you don’t want to help fund oil and gas producers that contribute to global climate change, you might want to reconsider your investment in these and other banks.
JPMorgan Chase is one of the biggest banks in the world, and it’s also the single biggest funder of the oil and gas industries. According to the Banking on Climate Change 2020 report, JPMorgan Chase has put a whopping $268 billion into these industries from 2016-2019, by far the biggest contributor. However, the Sierra Club notes that JPMorgan’s overall fossil fuel financing did fall by 20% in 2020 amid a corporate commitment to adopt more environmentally friendly policies in line with the goals of the Paris Agreement. For example, the company has reduced exposure to projects such as drilling in the Arctic National Wildlife Refuge.
Wells Fargo isn’t too far behind JPMorgan Chase when it comes to funding oil and gas companies, with nearly $198 billion financed from 2016-2019. Of note is that Wells Fargo reduced its 2019 contribution by nearly 30% from 2018. However, according to the Sierra Club, Wells Fargo is the No. 1 supporter of the fracked gas industry.
Citibank is the second-worst offender when it comes to 2019 levels of oil and gas financing, behind JPMorgan Chase. Citibank increased its fossil fuel financing four years in a row, jumping from $43.066 billion in 2016 to $52.409 billion by 2019.
Bank of America
Bank of America is seemingly moving in the other direction of some banks when it comes to financing fossil fuel companies. Its 2019 financing level of $48.075 billion was a whopping 37% above its 2018 financing level of $34.926 billion.
Other Top Banks That Finance Oil and Gas Companies
These well-known banks are just a few that finance oil and gas companies. Other banks that financed more than $30 billion in oil and gas in 2019 alone include RBC, MUFG, Mizuho and BNP Paribas. Barclays, TD and ScotiaBank rounded out the top 10 in terms of cumulative financing for fossil fuel enterprises from 2016 to 2019.
Why Is This a Concern?
For those looking to help stop climate change, recycling, using more fuel-efficient cars and reducing the use of plastics can all help. But the real change will come when companies that pollute either stop receiving funding or are otherwise forced financially to change their practices. If you believe strongly in this issue, curtailing your support of banks that finance the oil and gas industry can help as well.
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