The hypocrisy of the world’s biggest banks on climate change keeps mounting. Last month, the British-based Bureau of Investigative Journalism (TBIJ) reported that London-based HSBC, one of the world’s top-10 biggest banks, has helped raise $47 billion for the fossil fuel industry since its 2022 announcement that it would not finance new gas and oil infrastructure.
Some of HSBC’s dealings were on behalf of Saudi Aramco, the world’s second-ranked company in Fortune’s Global 500 and often dubbed the world’s biggest polluter for being the largest corporate emitter of greenhouse gases. In response to the report, the bank told TBIJ that its investments remain “science-based,” under a presumption that “net zero-aligned scenarios require continued, though declining, financing of fossil fuel supplies to meet energy demand, security, and affordability during the transition.”
It was another corporate spit in the face of science. The United Nations’ Intergovernmental Panel on Climate Change warns that all scenarios to meet the Paris Agreement’s targets for holding planetary temperatures under 1.5 degrees Celsius, or 2.7 degrees Fahrenheit from pre-industrial levels require “rapid and deep and, in most cases, immediate greenhouse gas emissions reductions in all sectors this decade.”
Many UN documents say emissions should be cut by 45 percent by 2030. Modeling by the Union of Concerned Scientists says it is possible to slash heat-trapping emissions by more than half by 2030, with “deep” and “direct” reductions.
It also requires a deep reduction in fossil fuel finance and an opening of the vaults for clean energy. The International Energy Agency said the world last year saw record growth in solar power, adoption of electric vehicles, and global clean energy investments that outstripped fossil investments last year by $1.74 trillion to $1 trillion. But it is not even close to enough. For the world to truly be on a path to net zero carbon emissions by 2050, the IEA says clean energy spending needs to soar to $4.5 trillion per year by the 2030s.
Fill ‘er up at the bank
It is hard to see that happening when banks like HSBC remain filling stations for the oil and gas industry. Nearly every major bank these days claims to have net zero financing and operations policies. UN Secretary-General António Guterres said about those policies,
We must have zero tolerance for net-zero greenwashing.
So far, the pledges aren’t worth a plug nickel.
A November report by the United Nations and several other climate science groups found that government plans add up to increases in coal production through 2030 and in oil and gas production through 2050—a date by which we’re supposed to be at net zero. A report this past fall by the human rights group ActionAid, says that the world’s biggest banks have poured $3.2 trillion into oil and gas development in the Global South in the seven years since the Paris Agreement was signed. Many nations in the Global South, which tend to be lesser resourced countries than industrialized Europe and the United States, are at the most risk of tragic consequences from the heat, rising seas and extreme weather of runaway climate change.
Another report this past summer by the Sierra Club found that the four biggest banks in the United States—JPMorgan Chase, Citi, Wells Fargo, and Bank of America, and the British-based Barclays—are the top five financial institutions propping up the coal power industry in the United States. All of that is on top of reports earlier in 2023 by consortiums of environmental groups.
One said the world’s 60 largest banks, led by JPMorgan Chase, Citi, Wells Fargo and Bank of America, have poured an overall $5.5 trillion into fossil fuel projects since the Paris agreement went into effect in 2016. Another said financial institutions in the Glasgow Financial Alliance for Net Zero have financed more than 200 of the world’s largest companies involved with the extraction, transport and production of coal, oil, and gas.
Banking on pseudoscience
The banks justify this by clinging to a stale “all of the above” energy strategy that too often leaves loopholes big enough to shove pipelines and coal trains through. In rationalizing their strategy, they often grasp for pseudoscience that is years behind the real science. Leading the way is the CEO of the world’s biggest financier of fossil fuels. In a 2022 House hearing, Jamie Dimon of JPMorgan Chase said ending fossil fuel investments is the “road to hell.” He added that investing in oil and gas “is good for reducing CO2,” to get away from coal.
Dimon obviously missed—or dismissed—the memo that the benefits of swapping out coal for natural gas evaporated years ago and that the methane from gas production now shares top billing with CO2 in frying the planet and harming human health. His counterparts, such as Bank of America’s Brian Moynihan, Citi’s Jane Fraser, and Wells Fargo’s Charles Scharf, all use the same type of excuses used by Fortune 500 companies and the Reagan administration in the 1980s to reject divestment from apartheid South Africa.
At the same 2022 House hearing in which Dimon said divestment was the road to Hades, Moynihan, Fraser and Scharf all claimed that financial engagement with oil, gas, and coal companies would nudge them to produce less oil, gas, and coal. Huh? While companies like ExxonMobil keep expanding?
The CEOs keep snubbing their noses at studies such as the 2022 report by the federal National Renewable Energy Laboratory saying there were multiple pathways for the United States to achieve 100 percent clean electricity by 2035. They also purposely ignore the IEA when it says “No new oil and natural gas fields are needed in the net zero pathway.” Similarly, a UCS analysis in November found at least two pathways to net zero, but said they cannot happen “if we simultaneously keep expanding fossil fuel infrastructure, production, exports, and use.”
Funding needless death
Worst of all, the banks’ continued support of fossil fuels is literally immoral as mounting studies tie fossil fuel burning to millions of deaths a year. The latest, from an international team of researchers in the British Medical Journal, found that 5.1 million people die prematurely from the ambient air pollution from the burning of fossil fuels. The study said that phasing out fossil fuels would be an “effective intervention.”
For now the banks actions are making this effective intervention impossible. That fact should raise public ire considering that the nations of the world agreed at the latest round of international climate talks to transition away from fossil fuels and the majority of people in the United States want action on climate change. In one of the most recent surveys, a December CNN poll found that 73 percent people think the United States should design its federal policies to cut greenhouse gas emissions by half by 2030—the current target of the Biden administration.
The big question now is whether international pressure and U.S. public engagement can build enough momentum to put us on the path to fossil fuel phase out we urgently need. The banks have a huge role to play. They can either choose to be part of the solution or, to borrow from Jamie Dimon, they can continue to propel us down the road to hell.
Derrick Z. Jackson is a UCS Fellow in climate and energy and the Center for Science and Democracy. Formerly of the Boston Globe and Newsday, Jackson is a Pulitzer Prize and National Headliners finalist, a 2021 Scripps Howard opinion winner, and a respective 11-time, 4-time and 2-time winner from the National Association of Black Journalists, the National Society of Newspaper Columnists, and the Education Writers Association.