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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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U.S. Banks Face Pressure To Cut Fossil Fuel Funding

  • Environmental groups are proposing non-binding resolutions to cut fossil fuel funding by top US banks, including Citigroup, Bank of America, and Wells Fargo.
  • These banks have funded $5.5 trillion in fossil fuel projects in the seven years since the adoption of the Paris Agreement.
  • The resolutions aim to pressure banks to adopt more climate-friendly policies and better align with their public commitments to net-zero by 2050.

Citigroup, Bank of America, and Wells Fargo shareholders are voting on Tuesday on non-binding resolutions proposed by environmental groups and ESG investors to wind down or phase out financing for fossil fuels. 

At last year’s shareholders’ meetings of some of the biggest American banks, similar resolutions won no more than 13% of shareholder support, Reuters notes

Early this year, As You Sow, Harrington Investments, The Sierra Club Foundation (SCF), and Trillium Asset Management filed two shareholder proposals at six of the top U.S. banks “to move them toward more climate-friendly policies that better align with their public commitments to net zero by 2050.” 

Resolutions were filed for shareholder votes at Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo. 

Fossil fuel financing from the world’s 60 largest banks hit $673 billion in 2022. These banks have funded $5.5 trillion in fossil fuels projects in the seven years since the adoption of the Paris Agreement, according to the annual Banking on Climate Chaos report by environmental groups published earlier this month.     

To compare, the previous edition of the report from last year showed that the 60 largest banks in the world poured as much as $742 billion in fossil fuel financing in 2021. 

For the first time since 2019, JP Morgan dropped from the top spot of the biggest backer of fossil fuels. JP Morgan is no longer the world’s biggest financier of fossil fuels. Last year Royal Bank of Canada (RBC) became the top bank funding oil and gas, the report showed. 

Overall, U.S. banks dominated fossil fuel financing, accounting for 28% of all fossil fuel financing in 2022. JPMorgan remains the world’s biggest funder of fossil fuels since the Paris Agreement, while Citi, Wells Fargo, and Bank of America are still among the top 5 fossil financiers since 2016, the report found.    

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on April 25 2023 said:
    To what useful purpose? Pressure on banks to cut fossil fuel funding is foolish and futile. This has contributed to the global energy crisis through underinvestment in the exploration for oil and gas and the expansion of their production capacities thus casing oil and gas prices to soar and inflicting extensive damage on the global economy.

    And since environmental groups are proposing non-binding resolutions to cut fossil fuel funding by top US banks, it makes the whole initiative the more farcical since banks will simply ignore them.

    Oil and gas will continue to drive the global economy throughout the 21st century and probably far beyond. If this is the case, then he global oil and gas industry has a responsibility to satisfy global demand for energy but without investments and bank funds it will fail to meet that goal.
    If banks want to help the global economy grow, then the onus is on them to provide funds to the oil industry.

    Still, the oil industry can help reduce emissions by increasing investments in carbon capture, utilization and storage (CCUS). This is a very rational way of combatting climate change and also extending the life of oil and gas fields because captured carbon is used for enhanced oil recovery (EOR).

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • Rob Grant on April 26 2023 said:
    Why are environmental groups being listened to by the banks when their option ie green energy can not begin to supply the required energy needs for our country.

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