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Introduction: Banks and climate change
Climate change, a manmade phenomenon, is one of the greatest environmental threats of our time. According to the Intergovernmental Panel on Climate Change (IPCC), failure to reduce ever-growing greenhouse gas emissions may result in a global temperature increase of up to 6°C by the end of this century. To prevent the worst impacts on ecosystems and society from climate change, greenhouse gas emissions need to be reduced by 80% by 2050. Achieving this goal requires drastic action on each level of society.
Sadly, the world is quickly reaching a point of no return for preventing the worst impacts of climate change. Continuing on the current course will make it difficult, if not impossible, to prevent the widespread and catastrophic impacts of climate change. The costs will be substantial: billions spent to deal with the destruction of extreme weather events, untold human suffering and the deaths of tens of millions from the impacts.
The international community agreed to confront this issue in the Paris Climate Agreement, which stipulates: "The Paris Agreement central aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius".
Banks, like all companies, produce greenhouse gases (GHG) directly from their activities. Their most important contribution to GHG emission is indirect, through the financing of clients and projects that generate GHG emissions. Banks also continue to play a key role as major financiers of the coal and oil and gas industry, effectively delaying the much needed shift away from a fossil fuel-based to an efficient and renewables economy.
The "Fossil Banks, No Thanks!" campaign
Private sector banks must stop financing the fossil fuel industry. But this is not happening! Each new bank-financed oil well, coal power plant, gas terminal or coal mine delays the end of the fossil fuel era. Between 2016 and 2018, just 33 global private sector banks funnelled a staggering US$1.9 TRILLION into fossil fuel projects and companies, according to our latest report "Banking on Climate Change - Fossil Fuel Finance Report Card".
Banks explain that they increase their lending for renewable energy, that they ‘engage with clients on emissions reduction’, or that they change their light bulbs. Some have moved further and no longer finance coal mines, tar sands, or oil projects in the Arctic, but no large bank has yet committed to end its financing of the fossil fuel industry altogether.
That's why the core focus of BankTrack climate work has been since 2018 the "Fossil Banks, No Thanks!" campaign.
We want banks to clearly and publicly acknowledge that stopping climate breakdown requires putting an end to the exploration and burning of fossil fuels, as well as their support for the fossil fuel industry.
Bold steps to make
We therefore demand by the 25th UN Climate Summit in November 2019 at the latest, that banks:
- publicly clarify their position on the relation between climate change and the extraction and burning of fossil fuels
- publicly commit to immediately end their support for all new fossil fuel projects, including exploration, extraction, transportation and power
- publish a robust plan for phasing out their support for all existing fossil fuel projects and companies on a timetable consistent with what is necessary to meet the Paris targets.