Al Gore has struck at the banking industry claiming it was still making profits from the oil and gas industry despite a climate crisis allegedly caused by that industry.
Speaking to Bloomberg, the prominent climate activist said that bankers were “profiting hugely” from financing and advising oil and gas companies.
Gore acknowledged, however, that it is “a bit unrealistic to expect fossil fuel companies to solve this crisis for us when they’re incentivized to do otherwise,” and it would also be unrealistic to expect banks to just stop lending to the oil and gas industry.
The comments come amid a shift within the oil and gas industry to refocus on its core business rather than prioritize low-carbon ventures. BP said as much earlier this year after its CEO admitted the low-carbon business was not doing great in terms of returns. Shell’s CEO made a similar statement, saying Shell will not cut its oil and gas production as much as previously planned.
Both moves reflected robust and resilient demand for oil and gas that led to considerable price jumps last year, bringing oil and gas companies billions in extra profits—which they shared with their shareholders. For a while, the energy segment was the best performer of the S&P 500.
Yet according to campaigners such as Gore, this has to change in the name of reducing human CO2 emissions to a net zero by 2050. According to BloombergNEF, this would require banks to pour four times as much money into low-carbon energy as they currently pour into oil and gas, by 2030. Currently, they are channeling some $800,000 into wind, solar, and similar for each $1 million they channel into oil, BloombergNEF said.
The banking industry is already turning away from oil, however. France’s biggest lender, BNP Paribas, said this year it would not fund new oil and gas field projects. Barclays, for its part, said it would quit financing oil sands projects.
Wall Street banks, meanwhile, are experiencing growing pressure from activists to stop funding the oil and gas industry. It may have been this pressure that led to BlackRock and Vanguard reducing shareholder support for climate-related resolutions at this year’s general meetings, and leaving a net-zero asset managers’ grouping.
By Irina Slav for Oilprice.com
Charles is a writer for Oilprice.com