Maaike Beenes, Campaign Lead Banks and Climate
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A global emergency…
The world is facing an acute and rapidly accelerating climate crisis. With each passing year, the number and severity of heatwaves, hurricanes, floods, forest fires and other climate-related disasters is increasing, already disrupting the lives of millions of people. Despite the goal of the Paris Climate Agreement to limit global warming to 1.5°C, the average global temperature is now 1,1 degrees higher than in 1990, with polar areas warming three times as fast and other areas facing ever more extreme heatwaves, opening the very real risk of them becoming uninhabitable.
For the world to still have a two-thirds chance to limit temperature rise to 1.5°C, global greenhouse gas emissions must be brought to net zero by 2050 latest, with over half of that reduction achieved by 2030. The latest IPCC and International Energy Agency reports are both crystal clear that this requires an immediate end to all new fossil fuel exploration and development, and a rapid phase-out of all remaining fossil fuel use.
…linked to other emergencies
The climate crisis poses a huge threat to nature, with forests being destroyed by wildfires or turning into savannah, tundras and alpine permafrost areas thawing, coral reefs bleaching and oceans getting both warmer and more acidic, thus becoming uninhabitable for many species while also releasing even more greenhouse gases into the atmosphere.
A warming planet is also expected to face more pandemics. Changing weather patterns, forest fires and other climate-related habitat destruction will set animals on the move, from bats to rodents to mosquitoes, leading to contact between animals and with humans that normally don’t interact, physically bringing together pathogens and potential new hosts.
Above all, the climate crisis poses massive risks to people and communities globally, especially poor, marginalised and/or Indigenous communities who bear very little responsibility for causing the crisis, yet are faced with destruction of their homes, land and livelihoods. The consequences of global warming, including desertification and extreme weather, will lead to water and food scarcity, forcing many people from their lands. Areas already affected by conflict will be disproportionately impacted because of the decreased “adaptive capacity” of both people and institutions already under stress.
Meanwhile, the fossil fuel industry that is at the heart of the climate crisis also impacts directly on human rights, as it penetrates Indigenous and communal lands for exploration and pollutes water and agricultural land. Even in the global North, its heavily polluting industries disproportionately impact poor, marginalised communities and especially communities of colour. Similarly, low-income and working-class communities disproportionately suffer the consequences of current spiking energy prices, and have less access to energy-saving measures. The welfare of fossil fuel industry workers worldwide must also be at the heart of any just transition towards a green economy.
Role of banks
Banks must play a key role in tackling the climate emergency. Despite all the rhetoric coming from banks committing to become net zero by 2050, trillions of dollars in bank finance still keeps the coal, oil and gas industry that is at the heart of the crisis afloat, and even helps expand it. No climate commitment of any bank is complete without a pledge to urgently phase out this finance and commit to financing a just transition to a zero-carbon society.
Banks also act as financiers of other high-emitting business sectors, such as steel, cement, petrochemicals, manufacturing, transport, real estate, etc. They must use their leverage over clients to rapidly steer these industries towards zeroing out their emissions, including by providing the finance for this transition.
Finally, banks have a responsibility to address their continued financing of business sectors that impact on natural forests and other ecosystems critical for climate mitigation and adaptation, including agricultural commodities such as soy, sugar, rubber, and beef and timber.
What banks must do
The overall aim of the Banks and Climate campaign is for banks to end their finance for the fossil fuel industry. In order to achieve this, banks must:
- Immediately end all financing for fossil fuel expansion projects and for all companies expanding fossil fuel extraction and infrastructure, along the whole fossil fuel value chain;
- Phase out all ongoing financing for fossil fuel projects and companies, on a timeline aligned with limiting global warming to 1.5°C, starting with an immediate end to finance for coal mining and coal power, as well as projects and companies active in tar sands oil, Arctic oil and gas, offshore oil and gas, fracked oil and gas, and LNG;
- Require all their existing clients to publish phase out plans for their fossil fuel activities on a 1.5°C-aligned timeline;
- Commit to zero out the climate impact of their entire finance portfolio before 2050, and to halve this impact by 2030 at the latest, without relying on discredited offset schemes;
- Immediately end all financing for fossil fuel projects and companies that abuse human rights, including Indigenous rights, and;
- Publicly and comprehensively report on all the previous steps.
These demands are set out in more detail in the Global Call on Banks, supported by over 260 organisations around the world They also reflect the ‘Principles for Paris Aligned Financial Institutions’, which were developed collaboratively by 60 NGOs with expertise on fossil fuel financing.
What BankTrack does
BankTrack’s Banks & Climate campaign challenges commercial banks to act urgently and decisively to help limit global warming to 1.5°C by ending finance for the fossil fuel industry and phase out all financed emissions to net zero by 2050. We do this through:
Monitoring bank finance for fossil fuels. Together with partners we each year publish the authoritative Banking on Climate Chaos report, providing an up-to-date overview of the fossil fuel portfolio of the 60 largest banks globally.
Monitoring bank policies on climate and fossil fuels, including specific high-risk sub-sectors. Our exclusion tables provide an accessible tool for activists and other audiences, showing whether banks have in place policies for the fossil fuel industry and for specific high impact sub sectors. We also provide an up-to-date overview of Net Zero commitments and membership of industry initiatives including the Net Zero Banking Alliance. In combination with tools developed by partners like the Coal Policy Tool and Oil and Gas Policy Tracker, the exclusion tables and climate commitment monitoring are a key resource for pushing banks to strengthen their policies on fossil fuels and climate.
Engaging with banks and industry initiatives to raise standards, either in banks’ own policies or as part of financial sector initiatives. Together with partners, BankTrack has pushed initiatives like the Net Zero Banking Alliance, the Equator Principles and the Principles for Responsible Banking) to strengthen their commitments on climate action.
Campaigning on Dodgy Deals to stop bank financing for projects and companies with significant adverse climate impacts. BankTrack campaigns in collaboration with affected communities and other partners for banks to address the negative impacts of specific projects and companies on climate, human rights and nature, either by engaging to ensure the negative impacts are stopped, or by ruling out finance altogether.
Supporting the global climate finance movement with research, tools and collaboration. BankTrack’s website provides an extensive database of bank policies, finance data and Dodgy Deal information that aims to support other civil society organisations, agents of change within the financial sector, media and other stakeholders. The Fossil Banks No Thanks Platform showcases the work of organisations working to stop bank financing for fossil fuels and provides campaign tools including a calendar of bank annual shareholder meetings. We also take part in global and regional coalitions including Europe Beyond Coal, Beyond Gas, the Climate Safe Lending Network and the European Responsible Investment Network (ERIN).