Major Banks Bend The Knee To Climate Activists, Accelerate Plans To Cut Coal Investments
Both U.S.-based bank Citi and German Deutsche Bank announced plans to reduce investments in coal this week, the latest step in the movement amongst major banks to reduce their funding of fossil fuels and other industries that produce greenhouse gasses.
Citi announced plans to reduce emissions from its coal mining investments by 90% by 2030, while Deutsche announced that it would no longer finance companies that generate more than 30% of their revenue from coal, down from 50%, if they have no “credible plans” to reduce their dependence by 2025. Both banks are founding members of the United Nations’ Net Zero Banking Alliance, which requires its 126 members to set goals and disclose financial data related to their efforts to reduce the emissions of their lending portfolio to net zero by 2050.
Banks have been increasingly investing in green energy, investing $0.81 in the sector for every $1 spent on fossil fuels in 2021, Reuters reported Tuesday, citing a report from BloombergNEF. The same report found that Deutsche invested $2.2 in green energy for every $1 in traditional fossil fuels.
“Addressing the world’s energy and climate needs will be a balancing act,” said Jane Fraser, CEO of Citigroup, in a press release. “On the one hand, investing in energy security is essential – the global economy still runs primarily on oil and natural gas and many developing nations have neither the resources nor the infrastructure to make a quick shift to renewables. At the same time, investment in clean energy technologies is critical to addressing climate change, and support for companies working to dramatically reduce their carbon footprints must continue wherever they may be on their respective journeys.”
Deutsche bank in particular drew some criticism from activist groups that considered the move to be insufficient, since it did not include similar cutbacks in oil and gas, Reuters reported. Activist groups had previously hailed the decision from major British bank HSBC in December to not fund new oil and gas investments and move to overhaul existing businesses it finances, joining fellow British bank Lloyds.
U.S. banks, such as JP Morgan Chase, Wells Fargo, Bank of America, Citi, Goldman Sachs and Morgan Stanley — all members of the Net Zero Banking Alliance — have faced pressure from activist investors to be more aggressive with their plans to cut fossil fuels from their investment portfolios, Bloomberg reported in January. New York City Comptroller Brad Lander in January filed a series of such shareholder resolutions in January, and threatened to pull pension funds from investment managers who failed to support the resolutions.
The Federal Reserve launched a pilot program in January, requiring the six largest U.S. banks — all named above — submit data regarding the impact of climate change on their investment portfolios by July 31. The Fed expects to publish the results of and insights gained from the pilot program at the end of 2023.
Deutsche Bank declined to comment. Citi did not immediately respond to the Daily Caller News Foundation’s request for comment.
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There’s a sucker born every minute. Some of them run banks.