Report finds continued increase in fossil fuel financing by major banks despite calls for climate action

In March 2020, a group of NGOs led by Rainforest Action Network published the Banking on Climate Change 2020 report. The report finds that 35 private-sector banks have provided USD $2.7 trillion for fossil fuel projects in the four years since the Paris Climate Agreement (2016-2019). The report further notes that such financing continues to increase despite calls for banks to cut their fossil fuel financing.

Full report      Website

The Business & Human Rights Resource Centre invited the biggest financiers of fossil fuel according to the report to respond:

This report is published annually. Please see last year's story for previous responses, media coverage and 2019 report.

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Company response
1 May 2020

Scotiabank's response

Author: Scotiabank

[Full response attached]

...We recognize that climate change is one of the most pressing issues of our time. It is significantly impacting natural systems and communities across the globe and poses a significant risk to the global economy and society as a whole...As an international financial institution, we have both the responsibility and opportunity to act...In November 2019, Scotiabank published our Climate Commitments outlining the Bank's approach to managing the risks and opportunities presented by the changing climate...
1. Mobilize $100 billion by 2025 to reduce the impacts of climate change.
2. Ensure robust climate-related governance and transparency in our reporting.
3. Enhance integration of climate risk assessments in our lending, financing and investing activities.
4. Decarbonize our own operations and find innovative solutions to reduce the Bank's impact on
the changing climate.
5. Establish a Climate Change Centre of Excellence to mobilize internal and external collaboration,
dialogue and information sharing and contribute to the global conversation on climate change.

...respect for human rights is fundamental to the way we carry out our business activities and is part of our core values...in 2016 we published the Scotiabank Human Rights Statement signed by our President and CEO, consistent with the UN Guiding Principles on Business and Human Rights. This Statement was updated in February 2019 to include our commitment to respect the rights of Indigenous Peoples, and can be accessed online here...Scotiabank is a signatory to the Equator Principles (EP) and reports on project finance transactions assessed using the EP framework to determine, assess, and manage social and environmental risks...

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Company response
23 April 2020

Bank of China's response

Author: Bank of China

[This excerpt translation is provided by Business and Human Rights Resource Centre. For the original response in Chinese, please click here.]

... Thank you for raising your concerns over the Bank of China. Bank of China has always implemented the principle of green credit, supported global environmental protection causes and fulfilled corporate citizenship responsibilities. Our business activities comply with the laws and regulations of the host countries and regions...

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Company response
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Author: 中国银行

感谢对中国银行的关注。中国银行一贯践行绿色信贷原则,支持全球环保事业,履行企业公民责任,经营活动符合所在国家和地区的法律法规。

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Author: 中國銀行

感謝對中國銀行的關注。中國銀行一貫踐行綠色信貸原則,支持全球環保事業,履行 企業公民責任,經營活動符合所在國家和地區的法律法規。

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Company response
20 April 2020

Wells Fargo's response

Author: Wells Fargo

[Full response attached]

Wells Fargo believes that climate change is one of the most urgent environmental and social issues of our time...Between 2018 and 2019, Wells Fargo deployed approximately $49 billion in financing to sustainable businesses and projects, with 67% going toward transactions that directly support the transition to a low-carbon economy...by the close of 2019, Wells Fargo’s tax equity investments represented 10.3% of all solar and wind generation capacity nationwide.

With regard your inquiry related to the RAN report, our lending to customers in the fossil fuel sector, as a percentage of our total loans, has held steady at about 1% for the past few years, including 2019.  And Wells Fargo has very limited history and activity with regard to project finance in the sector, as you can see in our most recent filing with the Equator Principles...that many of our traditional energy customers are also investing in renewables and other cleaner forms of generation as they prepare to be competitive in a low-carbon economy...Per company policy, for any fossil-fuel energy client, Wells Fargo carries out enhanced environmental and social due diligence...We recently published a Climate Change Issue Brief that outlines our enterprise approach to addressing the issue...

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Company response
17 April 2020

Citi's response

Author: Citi

[Full response attached]

...We have maintained a constructive and transparent dialogue with Rainforest Action Network, BankTrack and some of the other sponsors of the annual Fossil Fuel Report Card for several years...we would like to share with you additional information not covered in the Report Card on our extensive efforts to address the climate crisis...Our Statement on Human Rights (2018) notes that the global and long-term effects of climate change present a "systemic risk" to human rights...a central pillar or our work has been a series of ambitious sustainable finance goals dating back to 2007. We achieved the most recent of these – our 10-year goal to finance and facilitate $100 billion in environmental finance – in just over 5 years...in the past year we enhanced our ESRM Policy to prohibit all project-related financial services for coal-fired power plants and thermal coal mines and instituted a phase-out of business to thermal coal mining companies globally by 2030...We were also early adopters of the Recommendations of the FSB's Taskforce on Climate-related Financial Disclosures, detailing our initial implementation efforts in our November 2018 TCFD report, Finance for a Climate-Resilient Future...

 

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Company response
17 April 2020

Credit Suisse's response

Author: Credit Suisse

[Full response attached]

Credit Suisse acknowledges that financial flows also need to be brought in line with the objectives of the Paris Agreement and is continuing to expand its own role in supporting the transition to a low-carbon and climate-resilient economy. In 2019, we introduced a Group-wide Climate Risk Strategy program based on a three-pronged approach. First, we aim to work with our clients to support their transition to low-carbon and climate-resilient business models and to further integrate climate change into our risk management models. Second, we endeavor to focus on delivering sustainable finance solutions that help our clients achieve their goals and contribute to the realization of the UN Sustainable Development Goals (SDGs). Credit Suisse would like to be the partner of choice when it comes to supporting clients with capital and advice in their transition to funding investments in new, efficient technologies and production processes as well as low-carbon products and services. Third, we aim to further reduce the carbon footprint of our own operations. 

Credit Suisse carries out a series of measures to assess business risks. If there are grounds to believe that a potential transaction or client relationship could pose an unacceptable risk or is not compatible with our existing agreements or internal guidelines, Credit Suisse conducts a bank-wide standardized Reputational Risk Review Process. Environmental (such as climate change) and human rights-related risks are some of the risks considered in that process...

[W]e announced in 2019 that we would no longer provide any form of financing specifically related to the development of new coal-fired power plants...

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Company response
17 April 2020

Deutsche Bank's response

Author: Deutsche Bank

[Full response attached]

Climate protection is one of the focal points of our sustainability approach. We support the Paris Agreement and are committed to its goals and to moving to a low-carbon economy. This commitment is an integral part of our corporate culture. Deutsche Bank’s Code of Conduct also reflects this attitude...

Our principle is not to engage in any activities or business relationships where there is clear evidence of human rights’ violations. 

[W]e have a role to play in facilitating the transition of economies towards sustainable and low-carbon growth. We seek to ensure that our risk management processes help to avoid negative environmental and social impacts arising from our core businesses and promote sustainable business. 

Under our Environmental and Social (ES) Policy Framework the following restrictions are applied...: 

− No financing for new coal-power facilities and a reduction in existing exposures to power companies heavily dependent on coal; 

− No financing of new thermal coal mines...

− ES due diligence required for climate-intensive sectors...; and 

− In 2019, the industry concentration thresholds for the oil and gas, utilities and steel, metals, and mining sectors were lowered...

Furthermore, we understand sustainable finance to be business activities that support the transition to a low-carbon economy by directing financial flows towards more sustainable and climate-friendly solutions...

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Company non-response
17 April 2020

Goldman Sachs did not respond

The Business & Human Rights Resource Centre invited Goldman Sachs to respond. The company declined to respond.

Company response
17 April 2020

Morgan Stanley's response

Author: Morgan Stanley

[Full response attached]

...Morgan Stanley recognizes that global sustainability challenges, including human rights, resource scarcity and climate change, can result in significant impacts if left unaddressed...Morgan Stanley is committed to being a responsible corporate citizen, respecting human rights and supporting the protection and advancement of human rights. Morgan Stanley also recognizes that climate change is an economic reality and a growing risk and opportunity...Our Environmental and Social Policy Statement sets forth environmental and social guidelines, including consideration of human rights and climate change, which are incorporated into our transaction due diligence process, our engagement with companies, our supplier expectations, and our own operations...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...In terms of climate change, Morgan Stanley recognizes the benefits of helping to reduce greenhouse gas emissions as climate change poses significant risks to the global economy. Morgan Stanley seeks to support the transition to a low-carbon economy through policies, activities, products and services that help mitigate climate risks and catalyze market-driven, low-carbon innovation...in April 2018, we committed to mobilize $250 billion to support low- carbon solutions by 2030. We have mobilized approximately $80 billion in capital toward this goal, including over $50 billion in 2019...

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