Banks Face Growing Pressure to Align with Climate Goals as Four Lenders Join New Initiative

Strategic Insights -

The climate crisis is taking a toll on the fossil fuel industry, and the banks that finance it are facing increasing pressure to change their ways. Four of America's largest banks, JPMorgan Chase, Wells Fargo, Bank of America, and Goldman Sachs, have joined forces with the Rocky Mountain Institute (RMI) to launch the Center for Climate Aligned Finance. This new initiative aims to promote sustainability and reduce the banks' carbon footprint, but climate activists are warning that it may not go far enough.

Key Takeaways:

  • The four founding partner banks, JPMorgan Chase, Wells Fargo, Bank of America, and Goldman Sachs, are responsible for more than $700 billion in fossil financing since Paris.
  • These banks bank a clear majority of the companies doing the most to expand oil, gas, and coal.
  • The banks must take clear steps to align their financing with 1.5°C, including immediately stopping support for projects and companies expanding fossil fuels.
  • Climate activists are warning that the initiative must not become a diversion from the core task of phasing out fossil financing on a 1.5°C-aligned timeline.

Statistics:

  • $700 billion: The total fossil financing of the four founding partner banks since Paris.
  • 25%: The share of fossil financing from major global banks that the four banks account for in that period.
  • 1.5°C: The temperature increase target that the banks must align their financing with.
  • 2020: The year in which the banks' total fossil financing peaked at $94 billion.

Sources:

  • Rainforest Action Network (RAN)
  • Rocky Mountain Institute (RMI)