Don't believe the banks.
Because the banking industry is betting on disaster.
For the past six years, Rainforest Action Network has evaluated the top global private banks on their financing for the coal sector. But as we heard last December during the U.N. Paris Climate Summit, more urgent action is needed if we are to have any hope of avoiding a 2°C, or even higher, increase in global temperatures.
That's why our report card this year looks to meet the ambition set out in Paris, with a focus on bank investments in sectors that are most incompatible with a climate stable future. This includes coal mining, coal power, extreme oil extraction (tar sands, Arctic and ultra-deepwater drilling), and the exportation of liquefied natural gas (LNG) that comes from fracking.
We found that in the last three years alone, 25 major banks have sunk billions into fossil fuels that are guaranteed to worsen our situation, including: $42 billion for companies active in coal mining; $154 billion for the 20 largest coal-fired power producers; $306 billion for companies that drill extreme oil; and $282 billion for companies that are building liquefied natural gas export infrastructure. Effectively, these banks are shorting the climate.
In finance industry terms, "shorting" is when an investor profits if a company or asset declines in value. In other words, it means betting on failure. Here, these bets are literally against the viability of our climate. They are also at the expense of some of the most vulnerable communities living in fossil fuel "sacrifice zones" around the world. This includes towns in Appalachia where the mountaintops are blasted off to mine coal, coastal regions off the Gulf of Mexico exploited for export terminals and offshore drilling, First Nations whose lands and waters are contaminated by tar sands mines in Canada, and communities from Poland to Indonesia to Bangladesh who breathe dirty air and drink contaminated water from smokestacks, oil spills, and all-too-common disasters caused by fossil fuel infrastructure.
And with global greenhouse gas concentrations rising steadily, the atmosphere itself and acidifying oceans are also becoming sacrifice zones, with devastating consequences for low-lying island nations and coastal communities worldwide.
Despite month-on-month record breaking temperatures, clear scientific data on human-caused climate change, and global consensus that we need urgent action, banks like JPMorgan Chase, Citigroup, and Deutsche Bank continue to pour billions into these dirty energy projects.
The banks will say "It's impossible. We cannot turn around on such short notice. Many projects have already been planned and even approved." But don't believe them, because that is what the banking industry said five years ago when Rainforest Action Network and activists around the world turned up the pressure on the coal industry. Since that time, bank after bank stepped away from financing coal mining companies. Just last year, five of the six largest banks in the U.S. including Bank of America -- previously the number one financier of coal in this country -- announced they were pulling out of coal.
Now, we need to fastrack the transition to a clean and just energy economy. That starts with rejecting the false narrative that the old dirty energy economy is our only option. When the banking community tells us that it is not possible to pull out of these dangerous extreme investments, that selling off our climate for short term financial gain is good for the economy, that climate change is either a hoax, inevitable, or simply not their problem, don't believe them.
Tell them instead that their days of shorting the planet are over.