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Report alleges major banks contribute to climate change through increased funding of fossil fuels

In May 2019, a group of NGOs led by Rainforest Action Network published research findings that suggest some of the biggest banks around the world are financing fossil fuels more than ever before. Since the Paris Agreement took effect in 2016, 33 of the top banks have contributed $1.911 trillion in fossil fuel financing. 

Full report | Executive summary

Business & Human Rights Resource Centre reached out to the top banks named in the report for a public response:

  1. Bank of America has not yet responded
  2. Bank of China did not respond
  3. Bank of Montreal response
  4. Barclays response
  5. Citi response
  6. Deutsche Bank response
  7. Goldman Sachs did not respond
  8. HSBC response
  9. JPMorgan Chase response
  10. Mizuho response
  11. Morgan Stanley response
  12. MUFG has not yet responded
  13. RBC (Royal Bank of Canada) response
  14. Scotiabank response
  15. SMBC Group did not respond
  16. TD Bank response
  17. Wells Fargo response
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Company response
5 June 2019

Response by ScotiaBank

Author: ScotiaBank

Through our Sustainable Business strategy, we are working hard to address the environmental, social and governance (ESG) topics that matter most to our business and to our stakeholders. Climate Change is one of our four strategic pillars. We set greenhouse gas reduction targets to address our own footprint, have an internal price on carbon to support more energy efficiency in our operations and financed $8.5 billion in the renewable energy sector in 2018. At Scotiabank, respect for human rights is fundamental to the way we do business, and is part of our core values across all of our business activities and operations. Consistent with that commitment, we published our Human Rights Statement, signed by our President and CEO, in 2016. The Statement is consistent with the framework established by the UN Guiding Principles on Business and Human Rights. This Statement was further updated in February 2019 to reflect our commitment to respect the rights of Indigenous Peoples.

Download the full document here

Company response
4 June 2019

Response by HSBC

Author: HSBC

We are intent on playing our part in the transition to a low carbon economy – which is why we committed in 2017 to provide US$100 billion in finance to develop clean energy and lower-carbon technologies by 2025...Our 2016 Mining and Metals policy prohibits involvement in new thermal coal mines or new customers dependent on thermal coal mining; the Energy Policy further limits our involvement in coal-fired power plants (‘CFPPs’)...Prohibition of the ‘bad’ is only one side of the climate change equation. It is also important that the financial sector contributes positively to the transition by helping capital flows go to, for example, the renewables sector...HSBC’s Climate Change Centre of Excellence has long been the top-rated research provider on climate change issues, including highlighting the risk presented by stranded fossil fuel assets to both the asset owners and the finance behind them. Our newly established Centre for Sustainable Finance will augment this with forward-looking, debate-shaping contributions on, for example, unlocking capital, the low-carbon transition, and climate risk and disclosure.

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Company response
3 June 2019

Response by Bank of Montreal

Author: Bank of Montreal

...BMO’s activities are guided by our strategic priorities and sustainability principles of social change, financial resilience, community-building and environmental responsibility.  This includes reducing our environmental footprint while considering the impacts of our business activities as we work with stakeholders who share our commitment to sustainability... Our approach to responsible lending is set out in our Environmental, Social and Governance Report (ESG Report)... This is an important issue for BMO, especially as we consider how we can best support the transition to a lower-carbon economy in partnership with our clients... This sustainable finance activity is an important way that BMO positively contributes to the global transition to a lower carbon economy. We are also signatories to the Equator Principles agreement, which is the world’s leading framework for environmental and social risk management for projects within its scope...BMO is committed to operating in a manner that balances our commitments to all stakeholders as we pursue our business strategy and strive to fulfill our broader social responsibilities. We take this commitment seriously and will continue to do so.

Download the full document here

Company response
3 June 2019

Response by Barclays

Author: Barclays

Please see our response at the following link: https://home.barclays/news/2019/04/supporting-the-transition-to-a-low-ca...

We are determined to do all we can to support the transition to a low carbon economy, while ensuring that global energy needs continue to be met...Regarding fossil fuels, we expect there to be a significant shift away from carbon-based fuel use in the long term, and our financing activity will reflect that change. In most scenarios, however, oil and gas are expected to continue to be relied upon as a main source of energy for some time to come. The reliance on gas as a transition fuel, and a partial replacement for oil, is expected to increase over this period... We have placed specific restrictions on what we will finance, ensuring we are balancing our responsibility to help keep the lights on and to support economic prosperity. Our new approach is laid out in our Energy and Climate Change Statement We take an enhanced due diligence approach to many projects in high carbon sectors and those that have a direct impact on indigenous peoples... We are also fully committed to operating in accordance with the Universal Declaration of Human Rights and our approach is outlined in a Human Rights statement (PDF 245KB).

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Company response
3 June 2019

Response by Deutsche Bank

Author: Deutsche Bank

Unfortunately, we are not able to comprehend the numbers mentioned in the report why we do not agree with the conclusions drawn by the authors of the report. Our portfolio with coal miners is negligibly low. We finance neither new coal-fired power plants nor new thermal coalmines. Since our latest coal-policies came into force, we have not financed any new project in that area. Furthermore, we are committed to reducing our business with coal mining companies, which we continuously realize. In addition to that, we have reduced the limit for our credit exposure with the oil, gas and utilities sectors. The report explicitly criticizes Deutsche Bank for its involvement in the extraction of tar sands oil and arctic oil and gas. In both areas, we did not provide any direct financing for such a project. However, we have business relationships with conglomerates with various business divisions, including those mentioned before. From our point of view, we cannot follow the conclusion that due to those business relationships we are one of the largest supporters of these extraction technologies. Our policies define different minimum standards for environmental and social factors that have to be considered in our business decisions. Those minimum standards also exist for the oil, gas and utilities sectors. We plan to further strengthen our policies for our business with the fossil fuel industry.

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Company response
3 June 2019

Response by Morgan Stanley

Author: Morgan Stanley

...Morgan Stanley is committed to respecting and supporting the protection and advancement of human rights. Morgan Stanley also recognizes that climate change is occurring and seeks to be a part of the solution, working alongside public policy makers, regulators, civil society and the private sector... Our Environmental Policy Statement sets forth our environmental guidelines, including diligence guidelines where indigenous tribes are impacted. Our Statement on Human Rights articulates our commitment to respect, protect, and advance human rights. Our Coal/Oil and Gas Policy Statement outlines how we evaluate transactions involving coal or oil and gas companies... we analyze environmental and social risks through our due diligence processes that incorporate international frameworks, such as the International Finance Corporation's Performance Standards and Equator Principles. We engage with stakeholders, including indigenous tribes, and incorporate their perspectives and insights into our transaction review. If potentially significant issues, such as potential indigenous rights or human rights violations, are flagged, our Environmental and Social Risk Management (ESRM) Group conducts enhanced due diligence to further understand how the risks are being mitigated and how impacts are being addressed by the company... in April 2018, we announced plans to mobilize $250 billion to support low-carbon solutions by 2030. In 2018, we mobilized nearly $30 billion in capital toward this goal. We recognize the importance of these issues and are sensitive to them...

Download the full document here

Company response
3 June 2019

Response by Royal Bank of Canada

Author: Royal Bank of Canada

RBC supports the principles of the Paris Agreement... we have a long history of managing our own carbon footprint and have made a commitment to achieving net-zero carbon emissions in our global operations, annually... we’re supporting [this history] with a clear new business target: $100 billion in sustainable financing by 2025. This goal supports investments in sustainable companies and projects that today are widely recognized as contributing to the low carbon, sustainable economy of the future... We also recognize the important need to continue to direct capital flows to our natural resource and energy sector clients, for innovation and clean technologies that will help reduce emissions and emissions intensity... we support the safe and responsible development of energy resources and evaluate projects against international standards and our own enhanced due diligence frameworks... for prospective and existing clients... there is a rigorous process in place to identify and assess any associated risks, and if we pursue or maintain the business relationship, we ensure appropriate steps are taken to mitigate those risks...We highly value the relationship we have with Indigenous peoples and clients. We believe that resource development projects need to be done in a transparent and inclusive manner.... practices continue to evolve and we take stakeholder input seriously. We are committed to advancing our risk management processes as we learn from the experiences of our peers and feedback shared by stakeholders.

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Company response
3 June 2019

Response by TD Bank

Author: TD Bank

We are committed to listening to our stakeholders and understanding their concerns.TD believes that responsible development of our natural resources must balance environmental, social and economic considerations. Accordingly, TD is taking a balanced approach to support the transition to a low-carbon economy, by supporting conventional energy sources that fuel North America's current economic vitality, while investing in low-carbon innovation aimed at helping enable a more inclusive and sustainable tomorrow. We believe that TD has an important role to play in helping the transition to a low-carbon economy. This is why we have committed to a target of $100 billion, in total, in low-carbon lending, financing, asset management and internal corporate programs by 2030... In 2018, we made further progress towards this commitment, joining the Business for Social Responsibility's (BSR) Human Rights Working Group, continuing our journey to align with the UN Guiding Principles on Business and Human Rights. TD is committed to proactive stakeholder engagement that enables us to engage with customers, investors, governments, environmental stakeholders and Indigenous communities to better understand key issues of concern, and to promote informed dialogue. Additional details of our stakeholder engagement can be found here.

Download the full document here

Company response
3 June 2019

Response by Wells Fargo

Author: Wells Fargo

Wells Fargo has issued a Business Standards Report (BSR), which details the changes Wells Fargo has made, and continues to make, since 2016 ... we established an external Stakeholder Advisory Council... nearly doubled the Environmental and Social Risk Management (ESRM) team... and adopted an Indigenous Peoples Statement to strengthen our due diligence practices for transactions with customers whose operations may adversely impact indigenous communities... Wells Fargo believes that climate change represents one of the greatest challenges of our time, and we recognize that certain communities, particularly those of low-to-moderate income, may be disproportionately affected by the impacts of climate change. Wells Fargo is committed to accelerating the transition to a low-carbon economy and minimizing the impacts of climate change on our customers and communities, and we bring this commitment to life through our business, our operations and culture, and strategic philanthropic partnerships... A few examples [include]...  In April 2018, we announced that Wells Fargo will provide $200 billion in financing to sustainable businesses and projects by 2030 with more than 50 percent focused on renewable energy, clean technology and green-building transactions... [and] In 2017, Wells Fargo began meeting 100% of our global electricity needs with renewable energy and has already met its 2020 carbon-reduction goal of 45 percent from a 2008 baseline. 

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Company non-response
3 June 2019

SMBC Group

Author: SMBC Group

SMBC Group declined to respond.