FAQ

  • The Banking for Climate Initiative is not a divestment campaign per se, we are a message and pressure campaign. However, we know that banks may try to distract us by promoting their sustainable investments and climate commitments. Through experience and research, we’ve learned that phased, partial divestment might be needed to get the banks’ attention. Banks’ sustainable investments and climate commitments are nice, but they are unserious if banks keep financing fossil fuel projects. Sequenced, partial divestment will let banks know that we’re serious.

  • Patience! Divesting may help you sleep better at night but if we don’t speak up it will not affect the financial system, bank lending decisions, or the climate crisis. Pull all your money and you lose all your voice. We need to use our influence and influence the banks’ decision-making processes around fossil fuel financing.

    On the other hand, if you are Harvard, the Ford Foundation, or the New York State Pension Fund, your divestment is newsworthy. It sends the message that fossil fuels are a toxic industry and adds to mounting public pressure. As a public act, divestment strikes at the reputation of the banks, and affects their bottom line. Publicity is part of our strategy.

  • Bank commitments to reach “Net zero by 2050” mean that the greenhouse gas emissions of their entire portfolio of financed projects will be balanced out against the greenhouse gas removal of that same portfolio. Hypothetically, this could be done by continuing to finance fossil fuels and other carbon intensive industries, with new and expensive Carbon Capture and Storage technology or by buying carbon to sets - planting trees in far away places.

    However, the International Energy Agency (IEA), an organization that has been advocating for the expansion of fossil fuels since 1973, says, point blank, that this won’t work. In May of 2021, the (IEA) released Net Zero by 2050: a Roadmap for the Global Energy Sector. “The Roadmap sets out more than 400 milestones to guide the global journey to net zero by 2050. These include, from today, no investment in new fossil fuel supply projects, and no further final investment decisions for new unabated coal plants.”

    The IEA is not some greenie group, they LOVE fossil fuels. Apparently, they also love life on this planet because now they are saying it’s time to wind them down. The problem is that fossil fuel supply projects like pipelines, liquid natural gas (LNG) export terminals, coal, gas, plastics and petrochemical plants, lock us into burning fossil fuels for the 50-year lifespan of these projects. Furthermore, easily financed fossil fuel production makes cheap fossil fuels, which block the market path for renewables and other low-carbon alternatives.

  • The Arctic Refuge
    Personal pressure from leaders of the Gwich’in and Iñupiat peoples and bank clients and shareholders got major U.S. banks not to  nance oil and gas exploration in the Arctic, including the Arctic National Wildlife Refuge. Some say that the banks were never going to  nance drilling in the refuge anyway, that there was no money in it. However, the bank commitments meant something because Alaskan politicians were furious. They petitioned then-President Trump to write a new law: making it illegal for banks to “redline” any industry for reasons other than fiduciary.

    Private Prisons
    Due to activist pressure, JP Morgan stopped funding private prisons during the height of the migrant crisis, when the Trump Administration separated children from their parents.

    Opioids
    JP Morgan Chase dropped Perdue Pharma, the pharmaceutical company that aggressively marketed their prescription opioids while downplaying their highly addictive properties. From Reuters, “JPMorgan told Purdue that reputation risks associated with the public backlash against the drugmaker informed its decision to cut business ties...”

    Guns
    Following the Parkland school shooting in 2018, Bank of America stopped financing gun manufacturers who made military-style weapons for civilians, like the controversial AR-15 rifle.

  • Yes, they could. When our banks stop funding the expansion of the fossil fuel industry, the global energy companies will certainly go to private equity and shadow banks. However, this delays projects and adds costs. Interest rates will be higher. Several fossil fuel projects have been cancelled due to cost run-ups from delays.

    When big banks refuse to fund expansion, the industry will be seen as toxic, just as the tobacco industry became toxic. As the tide of public opinion turns, government regulation will likely step in. Ultimately the goal is to cripple the biggest industry in the world. We aren’t kidding ourselves that this will be easy and fast, we only know that it has to be done. It’s up to us to do everything in our power to make it happen.

  • There are multiple environmental injustices inherent in the climate crisis. Poorer communities of color get hit hardest by extreme weather - homes are destroyed and there’s no money to fix them. Fossil fuel projects - coal slag dumps, pipelines, and new petrochemical plants - are sited in poor neighborhoods or in communities of color; where people don’t have the political or financial clout to fight back.

    Fossil fuel expansion makes it all worse. Pipelines are pushed through indigenous lands without permission and leak poison clean water supplies. Petrochemical plants and LNG terminals are sited near poor communities of color where various pollutions cause drastic spikes in asthma and cancer rates. In the Canadian boreal forest, massively industrialized tar sands mining has given First Nations peoples high rates of rare cancers while destroying their beloved homelands. Below are a few of these projects.

    Enbridge’s Line 3
    Line 3 is a newly completed pipeline expansion to bring nearly a million barrels of tar sands per day from Alberta, Canada, through untouched wetlands, the treaty territory of Anishinaabe peoples, and the Mississippi River headwaters to the shore of Lake Superior. It was proposed in 2014 by Enbridge, a Canadian pipeline company responsible for the largest inland oil spill in the US. Line 3 will contribute more to climate change than Minnesota’s entire economy. Line 3 violates treaty rights of Anishinaabe peoples and nations in its path — wild rice is a centerpiece of Anishinaabe culture, it grows in numerous watersheds this pipeline crosses. Oil started flowing in Line 3 on October 1, 2021, but already Enbridge has been fined 3.3M for piercing the aquifer, and they have passed the court ordered cleanup deadline. They’ve contaminated waterways with drilling fluid which, while less toxic than tar sands oil, is not a great preview of things to come.

    Formosa Petrochemical Plant: St James Parish
    Formosa Plastics wants to build a massive plastic factory on the banks of the Mississippi River in St. James, Louisiana. This African- American community has already been sickened by industrial polluters. The region is referred to as “Cancer Alley” or “Death Alley” because the ever-widening corridor of petrochemical plants has polluted the surrounding water and air so badly that residents have had cancer, respiratory diseases, and other health problems for years. Plastic factories are part of the fossil fuel industry’s push to turn gas and oil into more throwaway plastics which kill wildlife, add to the ocean plastic crisis and poison our bodies, leading to a wide range of health effects, from diabetes to sexual dysfunction and infertility.

    Pipeline fights in Canada
    The Coastal GasLink pipeline by TC Energy will pass through several First Nations peoples’ traditional lands, from the Canadian Rockies to Kitimat, where the gas will be exported to Asian customers. Trans Mountain Pipeline expansion will run 590,000 more barrels of tar sands each day and increase the oil tankers in the Salish Sea by 700%. Tens of thousands have demonstrated against the Trans Mountain pipeline, with over 200 having been arrested. Both projects will lock Canada in for decades of dangerous greenhouse gas emissions and compromise Indigenous land rights.

    Ecuador’s OCP Pipeline
    The 295 mile OCP crude oil pipeline flows through Ecuador’s extremely sensitive ecosystem inhabited by various indigenous groups while also traversing geologically unstable landscapes. To fill the OCP, Ecuador must double current oil production with a whole new wave of oil exploitation in vast areas of Amazon frontier forest. There are plans for hundreds of new oil wells and associated processing plants, roads, and pipelines that will litter the country’s last remaining old-growth rainforests and territories of isolated indigenous peoples.

    East African Crude Oil Pipeline
    Currently under construction, the East African Crude Oil Pipeline will carry 900 miles across East Africa, and will be the longest heated crude oil pipeline globally. It is expected to cause large-scale displacement of communities and pose grave risks to protected environments, water sources, and wetlands in both Uganda and Tanzania.

  • Fossil fuel executive pay and options are linked to the continued extraction of fossil fuels. These lucrative packages create incentives for CEOs to prioritize building out new fossil fuel assets, increase marketing to push additional fuel consumption and lobby for government subsidies. Left alone, energy companies will invest more in expansion projects than in renewables.

  • Phenomenal folks are doing important impact investment work. We absolutely need to invest both public and private wealth in new technologies that can replace our reliance on high carbon fossil fuels. However, the “invisible hand” of the market is predicated on the concept that all business has an even start point: no subsidies, no tax breaks, no political influence, no heavily banked greenwashing strategies. Sadly, we don’t live on that planet.

    We need to remember that the fossil fuel industry has had a big head start. It’s a fully mature industry with $20 billion in federal subsidies, tax credits and breaks and an incredible amount of political clout. Joe Manchin, one of the biggest recipients of fossil fuel donations in the Senate, is killing climate provisions in the Build Back Better reconciliation package. It’s hard to wait for the “free market” to move us to renewables when the deck is so stacked.

  • Long-term, CCS is a critical part of solving climate change. However, given current technology limits and cost, there are no viable, cost-effective carbon capture and sequestration technologies today. There likely won’t be one that can get to scale in the next decade - a critical time when we need to reduce emissions drastically. In the meantime, and to put the planet on a path to averting climate catastrophe, we need to immediately begin decreasing the amount of carbon pollution emitted into the atmosphere.

    The IEA and CCS scientists and entrepreneurs like Dr. Edda Aradóttir of Carbfix agree. According to Dr. Aradóttir, “First and foremost, we have to stop emitting CO2 and we have to stop burning fossil fuels, the main source of CO2 emissions to our atmosphere.” The contribution of CCS will become more critical as the technology improves, costs fall, and cheaper abatement options in tough to decarbonize sectors are exhausted. But if we don’t start cutting emissions now, even with CCS, science says we will run out of time to get to net-zero. The oil and gas industry uses the promise of CCS technology as an excuse to keep expanding fossil fuel supply and CCS makes the fossil fuel industry look like they are addressing climate change. But even if CCS worked today, it wouldn’t address environmental racism, nor other cancer-causing pollutions, and it would be used by fossil fuel  rms as an excuse to extract even more fossil fuels. We need to stop feeding the beast.

  • “Shouldn’t they go first?” is subtly predicated on the belief that it will “cost us” to reduce our carbon emissions. That is an inaccurate belief - climate disasters cost way more than the cost of transition off of fossil fuels.

    FACT: The United States is the second-largest carbon emitter globally and the number one carbon emitter per capita (excluding tiny oil-producing nations like Qatar or the Arab Emirates). We are second only to China in overall carbon emissions and more than double those of India. Reducing our national carbon footprint will make a difference.

    FACT: The biggest global funders of fossil fuels are the U.S banks. Here’s another fact: The United States has been leading the world since we freed Europe from the Nazis. Leading is an honor and a privilege and someone has to do it, and it’s good for us, and great for everyone else. Let’s say you have three kids, and you ask your son to clean his room. He refuses; his sisters’ rooms are messy too. They should clean their rooms first! What do you do? You tell your son to step up and be a leader. Stop whining about your sisters, just clean that room!