Behind every ecological crisis is a bank and a banker.
3 top environmental problems funded by Big Banks
93% of Americans have money in a bank account. Even if each person is banking just a small amount of money, the collective savings of over 300 million people adds up. And it gives the big banks a lot to play with.
While you’re making sacrifices to reduce your environmental impact, your bank is quietly using your money to fund deforestation, fossil fuels, water pollution, and air pollution.
Let’s start with fossil fuels.
Big banks love them; the planet does not.
Many of the ecological crises we’re currently facing have their roots in fossil fuel extraction, transportation, and burning. It’s a key factor in air pollution, water pollution, global warming, and ocean acidification.
In 2016 as part of the Paris Agreement, countries around the world pledged to “[make] finance flows consistent with a pathway towards low greenhouse gas emissions”. So why have big banks been increasing their investment in fossil fuels year after year?
Since then, the world’s top banks have steadily increased the amount of money they put into fossil fuel financing. In the past three years, banks have financed fossil fuels with over $1.9 trillion, a sum bigger than all the currency in circulation in the U.S.
In fact, the four biggest bankers of fossil fuels are all US banks; JPMorgan Chase, Wells Fargo, Citibank and Bank of America are the world’s “dirtiest” banks, pouring money into the fossil fuel industry. The worst of these, JP Morgan Chase, holds 11% of all U.S. bank deposits. And between 2016-2018 they used these deposits to funnel over $195 billion into funding fossil fuels.
Some estimates show that tropical tree cover alone could go 23% of the way to meeting climate goals. But in 2018 the world lost 30 million acres of forest, in large part due to deforestation, and things are not looking any better for 2019.
The leading cause of this tree loss? Agriculture. In particular, cattle ranches in the Amazon, and palm oil production in Indonesia are the key drivers of rainforest loss.
Unfortunately for the climate, the big banks are also financing deforestation in a big way. Of 150 key financial institutions, 64% have no policy at all covering the main forest-risk commodities; beef, soy, palm oil, and timber. Those that do have a policy regularly breach it.
Between 2013 and 2019, six of the most environmentally damaging agribusinesses received $44 billion from banks, investment firms, and pension funds. Banks such as HSBC, Barclays, Morgan Stanley and Bank of America are supporting companies known to be contributing to the destruction of the world’s most biodiverse and fragile forests.
Most of the biggest issues plaguing the planet’s oceans can be traced back to the burning of fossil fuels and chemical runoff from agriculture; two of big banking’s favorite industries. But there’s also the unending onslaught of plastic pollution in the ocean.
At this stage, we’ve all accepted that single-use plastic is bad. But nowhere in the environmental policies of either JP Morgan Chase, Citibank, Wells Fargo or Bank of America, will you find a single reference to assessing a company’s contribution to plastic pollution.
We know it’s possible; Norway, home to the largest sovereign wealth fund in the world, has announced plans to divest from companies harming the oceans through plastic pollution and overfishing. But the big banks don’t seem too bothered.
Big banks are tricking their customers into a dark paradox; encouraging them to save for the future and then using the money their customers save to fund the destruction of that future.
To really know how environmentally friendly your bank is, you need them to show you where they put your money. It’s time for us all to demand that our banks divest from the planet’s destruction, and encourage them to use our money for good.
Just imagine the impact it would have if the world’s big banks started investing in climate solutions instead of funding the climate crisis.