While France just ratified the Paris Climate Agreement Wednesday, big banks across the world keep pouring billions of dollars into the fossil fuel industry, revealed a recent report. The agreement is meant to hold climate change below 1.5°C above pre-industrial levels,
The report by the Rainforest Action Network, known as RAN, BankTrack, the Sierra Club and Oil Change International is titled “Shorting the Climate."
“Shorting” or “short-selling,” in the financial world, refers to a transaction through which an investor profits if a company or asset declines in value.
The authors focused on 25 large U.S., Canadian and European banks, finding that they spent all together US$784 billion from 2013 to 2015 on “extreme” oil projects—including Arctic drilling and Canadian oil sands mining—as well as infrastructure to export liquefied natural gas, or LNG, coal mines and large coal-fired power plants.
In other words, the financial sector is deliberately betting that climate change policies will fail to maintain global temperatures under 2°C, hoping that investments in the fossil fuel industries will pay off.
“These investments are only going to pay off for the financial industry if these fossil fuels get burned,” said Amanda Starbuck, the San Francisco-based climate and energy program director for Rainforest Action Network, one of the authors of Tuesday’s report.
“Banks are placing a bet that we are going to fail to address climate change,” she added.
According to the latest scientific research, at least 82 percent of what remains of fossil fuel now has to be left underground in order to stave off catastrophic levels of global warming.
“Banks have started to take coal so seriously, yet the other fuels seem to be complete blind spots for them right now,” Starbuck said.
Over the past years, several U.S. and European big banks have expressed commitments to not invest in the coal industry anymore, which has been predicted to die out soon, yet they are still financing other projects involving the massive use of fossil fuels.
RAN issued a petition online to stop this funding and encouraged citizens to spread the hashtag #shortingtheclimate on social media.
The record of various U.S. and European big banks
in coal mining | Photo: RAN