Paris — A new Sustainable Power Policy Tracker launched today by Reclaim Finance, and supported by 13 advocacy organizations including the Sierra Club, reveals that big US banks Citi, Bank of America and JPMorgan Chase do not have the basic policies and financing targets needed to support the decarbonization of the power sector and are lagging behind European banks. While some banks globally do have targets for financing sustainable power supplies, they are all leaving the door open to financing false solutions while continuing to support the expansion of fossil fuels.
- Explore the tracker: https://sustainabilitypolicytracker.org
The launch of the tracker comes amid statements from international energy experts that annual funding for the energy transition must increase 2.5-fold between now and 2030 to achieve net zero by 2050. Advocacy organizations are calling on US banks to massively increase their support for sustainable power and to immediately stop supporting the expansion of fossil fuels.
“For all their talk about financing the transition, banks are not doing nearly enough to meaningfully drive decarbonization. As usual, US banks are the worst of a bad bunch: no major US bank has set a target for financing renewable energy. Meanwhile, these same banks are among the world’s worst financiers of oil, gas, and coal expansion. If banks want us to believe they are serious about their net-zero commitments, they need to ramp up their financing for renewables and stop financing fossil fuel expansion,” said Adele Shraiman, Senior Campaign Strategist with the Sierra Club’s Fossil-Free Finance campaign.
MAIN FINDINGS
The Sustainable Power Policy Tracker, which looks at whether the 60 biggest global banks have the targets and policies needed to drive the decarbonization of the power sector, reveals that none are on track to adequately support decarbonization. While two thirds of the assessed banks have adopted targets for decarbonizing power supplies using the International Energy Agency’s Net Zero Emissions scenario, they do not follow the scenario’s requirements for a significant increase in financing for sustainable power supplies.
The tracker examines:
- The definition of sustainable power used by the banks;
- Whether the banks had specific financing targets for sustainable power;
- Whether they had a target for delivering financed new installed capacity for sustainable power;
- Whether there was transparent reporting of their activities linked to sustainable power.
According to the tracker, 8 banks globally have a target for financing sustainable power supplies: French banks BNP Paribas, BPCE, Crédit Agricole, Société Générale, and La Banque Postale; German bank DZ Bank; and Dutch banks ING and Rabobank.
Globally, none of the banks in the tracker exclude “false solutions” such as biomass or fossil fuel-related technologies from their definition of “sustainable”, and none of the banks in the tracker have clear targets for increasing installed capacity.
European banks all scored weakly for transparent reporting, with UK banks HSBC, Standard Chartered and Lloyds scoring zero. In the United States, none of the banks (Citi, Bank of America, and JPMorgan Chase) have capacity targets or financing targets for sustainable power.
While funding for the energy transition remains well below what is needed, almost all banks continue to finance the expansion of fossil fuels. Only 2 banks – La Banque Postale and Danske Bank – have made a commitment to end financing oil and gas expansion.
Reclaim Finance and advocacy organizations are urging banks to step up and support the energy transition by adopting policies to support power generation from sustainable sources by committing to a 6:1 financing ratio by 2030 for sustainable power compared to fossil fuels and by immediately ending support for fossil fuel expansion.
“The shift from fossil fuels cannot happen without significant investment in the development of sustainable power supplies. Banks must redirect their finance and investments away from the fossil fuel sector, and also away from “false solutions”. Given the urgency of the climate emergency, banks must end their love affair with the fossil fuel sector and rapidly embrace sustainable power,” said Remi Hermant, Analyst with Reclaim Finance.
“Banks in the U.S. are the worst climate offenders and the largest funders of fossil fuels. We hear many empty promises from these banks about being committed to green financing. Reclaim Finance’s new policy tracker gives us a tool to cut through the spin. The truth is that banks don’t have policies in place that make their words anything more than greenwashing. We call on major US banks like Bank of America to stop financing fossil fuel expansion and to make credible commitments to scale up financing for urgently needed solutions, including sustainable power,” said April Merleaux, Research Manager with Rainforest Action Network.
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.