Examining the Banks’ Climate Policies Critically
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Examining the Banks’ Climate Policies Critically

It is pretty clear at this stage that those of us alive today and our children, grandchildren and their descendants are facing a climate crisis unlike anything the inhabitants of Earth have ever faced. It is also very clear that this crisis largely emanates from our addiction to fossil fuel over the last half century.

As we begin to grapple with the challenges we face, there is an increasing desire to blame the major money center banks for their continued funding of fossil fuels. In fact, if you drive down the west side of Manhattan you will see advertisements for a smart-up mobile app that will keep deposits away from fossil fuels (and but pay a rate below leading online savings rates).

We have all made mistakes in our reliance on fossil fuels in the past. That includes the banks. I myself worked for major European banks that were funding BP and Royal Dutch Shell’s exploration around the world. I also practiced law in Russia where I advised Exxon on Sakhalin 1. If I had understood the consequences of those operations, I would have refused to do the work, and that is true of everybody who I worked with. We are all guilty of recognizing the crisis much too late. The banks too.

But, our path to transitioning out of fossil fuels to renewable energy is also going to rely on established banking systems. There is such an extraordinary amount of investment that is going to need to made immediately to effect this transition that there simply is no other source that can lead in this arena.

I performed a little bit of research recently to learn more about the progress that major global banks are making in their lending to renewable projects worldwide. I came across multiple reports on the banking industry’s current loans to the fossil fuels industry. These reports all slam JP Morgan Chase, which is now the largest bank in the US and hence the largest covered by BestCashCow, for its outsized and outstanding loans to companies like Chevron and Exxon without, at the same time, recognizing the history of these loans (i.e., when these loans were placed). None of these reports asks whether the bank can even divest itself of these loans. One report (Banking on Climate Chaos by the Rainforest Action Network) goes so far as to attack Chase for lending to Iberdrola, Orsted and Siemens Energy. Iberdrola and Orsted, of course, are now the largest offshore wind operators in the world and will be vital in the US’s efforts to transition away from fossils. Siemens Energy, likewise, is a manufacturer of solutions relating to wind, solar and energy storage and transmission. Quite simply, it would be irresponsible for Chase not to be increasing its lending to these three companies right now.

The point is simple. We need leadership from the banks on the climate crisis. Rather than rushing to judgment, we need to give them the opportunity to outline their actions and their forward plans to address the climate crisis. Banks are now free to outline their policies on BestCashCow for their customers and potential customers. Read what they have to say on their bank pages on this site or ask them directly for their policy, if they haven’t outlined it. Examine their actions critically, looking at the investment to renewable companies as well as fossil fuel companies. And, only then should we hold them to account.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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