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Time of India
11 hours ago
- Business
- Time of India
Banks are financing their own multitrillion-dollar nightmare
If you come home early from vacation and find robbers ransacking your house, you could call the police and try to stop the crime. But the true alpha move would be to help the robbers load your valuables onto the truck and then tell them which of your neighbors are also on vacation in exchange for a cut of the profits. Banks are choosing the alpha option, basically abetting theft from themselves by backing new projects to extract and burn fossil fuels, thus stoking the planetary heating that stunts economic growth and their own insurance and mortgage businesses. Of course, these financial companies do get a cut of the short-term profits from this environmental sabotage. And by abandoning the pretense of siding with the climate, they avoid political blowback from a US government that has declared war on it. But the long-term result will be a global economy trillions of dollars poorer and far less stable, impoverishing just about everyone, including the banks. The world's 65 biggest banks delivered $869.4 billion in financing to fossil-fuel companies last year, up $162.5 billion from 2023, according to a new report by the Rainforest Action Network, the Sierra Club, and several other nonprofit groups. Banks have funneled $7.9 trillion in loans and underwriting to these polluting industries since the Paris climate accords took effect in 2016, by the report's measure. This doesn't include any investments by banks' asset-management units, which amount to hundreds of billions of dollars more. Bloomberg Last year's financing surge reversed two years of declines and coincided with a turn of political sentiment against 'woke' environmental, social and governance considerations in business. Climate actions drew some of the harshest attacks, with President Donald Trump and other conservatives blaming them for rising energy prices. Such claims helped Trump win a second term. On his first day in office, he declared that his predecessor's foolish concern for the climate had created a 'national energy emergency' that hurt Americans' finances. His prescription has been to attack any public or private activity meant to slow the burning of fossil fuels. Live Events Banks saw the direction that the wind was blowing and quickly changed tack. The biggest immediately quit the Net Zero Banking Alliance, a group that vows to help eliminate greenhouse-gas emissions by 2050. They claim to still have their own goals for curbing emissions, but they've apparently given up trying to make their actions match their words. To meet the Paris Agreement 's rapidly fading stretch goal of holding global heating to 1.5 degrees Celsius above preindustrial averages, energy financing should favor green projects over fossil fuels by a 4-to-1 ratio, according to BloombergNEF. In 2023, the latest data available, the ratio was just 0.89-to-1. Boosting fossil-fuel financing last year probably didn't move that ratio in the right direction. Bloomberg Meanwhile, the economic damage caused by a heating planet keeps mounting. Global climate-related costs — including insured and uninsured losses, government relief spending and higher insurance premiums — have topped $18.5 trillion since January 2000, Bloomberg Intelligence estimated recently. The US alone accounted for $7.7 trillion of the damage, or 36% of its growth in gross domestic product over that stretch. In just the 12 months through April, US climate-related costs totaled nearly $1 trillion, BI said, roughly matching bank financing for fossil fuels during that time. You might argue economic activity is economic activity, that building a house is basically the same as rebuilding a house, that government disaster relief is no different from any other flavor of government spending. But simply responding to disasters again and again is no way to grow an economy. Money spent to rebuild houses, bridges and roads is money not spent on college educations, better infrastructure or other productivity-boosting measures. It steals growth from the future. A National Bureau of Economic Research paper last fall estimated that a planet hotter by 3C — its current trajectory — would have a GDP that was smaller by more than a third. A study last week from the University of Maryland's School of Public Policy found that a complete rollback of the Inflation Reduction Act's climate measures, something Trump and congressional Republicans have been working hard to do, would shave $1.1 trillion from US GDP alone over the next decade. It would also kill 22,800 Americans, take $160 billion from American incomes and cause the average home's energy bill to be $206 higher. Talk about an emergency. But if you need a more immediate climate threat to finance profits to be convinced, you can already see one in the growing crisis in home insurance. Every new wildfire, flood, tornado and hurricane exposes just how underinsured and underprepared Americans are for such disasters, putting possibly $2 trillion in home valuations at risk. Given the political reality, it's understandable for banks to speak softly about protecting the planet and their own future profits. Helping fossil fuels build an even bigger stick with which to beat them makes much less sense.
Economic Times
11 hours ago
- Business
- Economic Times
Banks are financing their own multitrillion-dollar nightmare
Bloomberg Live Events Bloomberg (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel If you come home early from vacation and find robbers ransacking your house, you could call the police and try to stop the crime. But the true alpha move would be to help the robbers load your valuables onto the truck and then tell them which of your neighbors are also on vacation in exchange for a cut of the are choosing the alpha option, basically abetting theft from themselves by backing new projects to extract and burn fossil fuels, thus stoking the planetary heating that stunts economic growth and their own insurance and mortgage businesses. Of course, these financial companies do get a cut of the short-term profits from this environmental sabotage. And by abandoning the pretense of siding with the climate, they avoid political blowback from a US government that has declared war on it. But the long-term result will be a global economy trillions of dollars poorer and far less stable, impoverishing just about everyone, including the world's 65 biggest banks delivered $869.4 billion in financing to fossil-fuel companies last year, up $162.5 billion from 2023, according to a new report by the Rainforest Action Network, the Sierra Club, and several other nonprofit groups. Banks have funneled $7.9 trillion in loans and underwriting to these polluting industries since the Paris climate accords took effect in 2016, by the report's measure. This doesn't include any investments by banks' asset-management units, which amount to hundreds of billions of dollars year's financing surge reversed two years of declines and coincided with a turn of political sentiment against 'woke' environmental, social and governance considerations in business. Climate actions drew some of the harshest attacks, with President Donald Trump and other conservatives blaming them for rising energy prices. Such claims helped Trump win a second term. On his first day in office, he declared that his predecessor's foolish concern for the climate had created a 'national energy emergency' that hurt Americans' finances. His prescription has been to attack any public or private activity meant to slow the burning of fossil saw the direction that the wind was blowing and quickly changed tack. The biggest immediately quit the Net Zero Banking Alliance, a group that vows to help eliminate greenhouse-gas emissions by 2050. They claim to still have their own goals for curbing emissions, but they've apparently given up trying to make their actions match their meet the Paris Agreement 's rapidly fading stretch goal of holding global heating to 1.5 degrees Celsius above preindustrial averages, energy financing should favor green projects over fossil fuels by a 4-to-1 ratio, according to BloombergNEF. In 2023, the latest data available, the ratio was just 0.89-to-1. Boosting fossil-fuel financing last year probably didn't move that ratio in the right the economic damage caused by a heating planet keeps mounting. Global climate-related costs — including insured and uninsured losses, government relief spending and higher insurance premiums — have topped $18.5 trillion since January 2000, Bloomberg Intelligence estimated recently. The US alone accounted for $7.7 trillion of the damage, or 36% of its growth in gross domestic product over that stretch. In just the 12 months through April, US climate-related costs totaled nearly $1 trillion, BI said, roughly matching bank financing for fossil fuels during that might argue economic activity is economic activity, that building a house is basically the same as rebuilding a house, that government disaster relief is no different from any other flavor of government spending. But simply responding to disasters again and again is no way to grow an economy. Money spent to rebuild houses, bridges and roads is money not spent on college educations, better infrastructure or other productivity-boosting measures. It steals growth from the future.A National Bureau of Economic Research paper last fall estimated that a planet hotter by 3C — its current trajectory — would have a GDP that was smaller by more than a third. A study last week from the University of Maryland's School of Public Policy found that a complete rollback of the Inflation Reduction Act's climate measures, something Trump and congressional Republicans have been working hard to do, would shave $1.1 trillion from US GDP alone over the next decade. It would also kill 22,800 Americans, take $160 billion from American incomes and cause the average home's energy bill to be $206 higher. Talk about an if you need a more immediate climate threat to finance profits to be convinced, you can already see one in the growing crisis in home insurance. Every new wildfire, flood, tornado and hurricane exposes just how underinsured and underprepared Americans are for such disasters, putting possibly $2 trillion in home valuations at the political reality, it's understandable for banks to speak softly about protecting the planet and their own future profits. Helping fossil fuels build an even bigger stick with which to beat them makes much less sense.
Scoop
a day ago
- General
- Scoop
Conservation Innovations: How Sustained Resistance Is Saving One Of The Earth's Most Critical Rainforests
In Indonesia's Leuser Ecosystem, orangutans swing through the treetops, rhinos roam free, and elephants share the land with tigers. It is the last place on Earth where they still coexist in the wild—and it's under siege. The battle to save it reveals the deep connections between consumer products, Indigenous rights, and the fight for climate justice. In the far northwest corner of Indonesia's Sumatra island lies a place so biologically rich and ecologically vital that scientists consider it one of the most critical rainforests left on Earth. The Leuser Ecosystem encompasses over 6.5 million acres of dense forest, peat swamp, and rugged mountains. It is a haven for life—and, until recently, a blind spot in the global imagination. Advertisement - scroll to continue reading Leuser is more than a biodiversity hotspot. Beyond its charismatic megafauna, the forest is home to thousands of unique plant and animal species. The deep peat soil stores vast amounts of carbon, making it a natural buffer against the climate crisis. And its rivers and rainfall sustain millions of people in the Aceh and North Sumatra provinces who depend on the forest for clean water, medicine, food, and cultural heritage. For the Indigenous Gayo, Alas, Kluet, Aneuk Jamee, and Karo peoples, Leuser is not merely a forest—it is sacred ancestral land. Their stewardship has kept the ecosystem intact for centuries. But in recent decades, an insatiable global hunger for one cheap commodity has pushed Leuser to the brink: palm oil. Conflict Palm Oil: The High Cost of Cheap Convenience From cookies and instant noodles to shampoo and lipstick, palm oil is everywhere. Found in nearly half of all packaged products on supermarket shelves, it's the most widely consumed vegetable oil in the world. It's also one of the most destructive. Indonesia and Malaysia produce more than 85 percent of the world's palm oil. To meet rising demand, corporations have cleared vast tracts of rainforest, often illegally, to plant monocultures of oil palm. The result has been catastrophic deforestation, widespread human rights violations, and the draining of carbon-rich peatlands that accelerate global warming. Nowhere has this destruction been more visceral than in the Leuser Ecosystem. Fires were raging in the Tripa peat swamp—a part of the Leuser Ecosystem—set intentionally to clear land for plantations. Endangered orangutans were dying in the flames. Smoke blanketed nearby villages. The world wasn't watching—yet. In 2012, an emergency call from Indonesian allies reached the offices of my organization, Rainforest Action Network (RAN) in San Francisco. We responded by launching what would become a decade-long campaign of investigations, corporate pressure, grassroots action, and international media advocacy aimed at defending this last wild stronghold from the bulldozers of industrial agriculture. Exposing the Supply Chain: From Rainforest to Retail Our approach was bold and methodical. We traced the origins of palm oil from the scorched frontlines of the Leuser ecosystem to the boardrooms of major consumer goods companies, including Nestlé, PepsiCo, Unilever, Mars, Mondelēz, and others. Using satellite imagery, drone surveillance, field investigations, and shipping records, RAN's teams followed the trail of destruction from plantations grown on deforested lands to mills, traders, refiners, and—finally—into the snacks, soaps, and cereals we buy every day. The revelations were damning. Multinational corporations were repeatedly caught sourcing Conflict Palm Oil—oil linked to deforestation, illegal land clearing, and the violation of the rights of local communities. We launched Leuser Watch, a watchdog platform that names and publishes detailed investigations connecting palm oil grown in deforested areas of Leuser directly to global brands. These investigations weren't confined to dusty PDFs. We collaborated with filmmakers, artists, and high-profile environmental advocates. Leonardo DiCaprio's climate documentary, Before the Flood, prominently features the Leuser Ecosystem and the palm oil threat, bringing global attention to the issue. Suddenly, what was once obscure was now on the radar of millions. People Power: Shaming the Snack Food Giants With the facts laid bare, we mobilized public outrage into pressure. The 'Snack Food 20' campaign targeted the biggest corporate buyers of palm oil, demanding they adopt and enforce real standards: No Deforestation, No Peatlands, No Exploitation (NDPE). Through petitions, creative protests, and shareholder activism, supporters around the world have called out companies such as PepsiCo, Nestlé, Mondelēz, and General Mills. Actions ranged from disrupting corporate meetings to massive banner drops, like the 100-foot-long message unfurled from PepsiCo's billboard on the Manhattan waterfront. Grassroots groups placed warning stickers on offending products in grocery stores. Social media was flooded with messages demanding reform. Inside boardrooms, the heat worked. Over 200 companies, brands, traders, and banks eventually committed to NDPE policies. These weren't empty gestures: they included hard requirements to map supply chains, verify sourcing, and end business relationships with bad actors. Some companies began funding forest restoration and monitoring programs. A few even took direct responsibility for their sourcing impacts in the Leuser Ecosystem. But progress was uneven. While companies like Unilever, Nestlé, Mars, and Ferrero took significant steps, claiming to be achieving more than 90 percent traceability to plantations in the Leuser Ecosystem, others lagged behind. Many NDPE policies remain poorly enforced, with loopholes and vague language that allow deforestation to persist behind a veil of 'sustainability' branding. From Exposure to Restoration: A Landscape-Level Revolution Recognizing that real change wouldn't come from isolated pledges, RAN pivoted toward an ambitious new strategy: landscape-level conservation. The idea was to go beyond advocacy for individual companies to encourage collaboration on creating jurisdiction-wide initiatives that involved governments, smallholder farmers, regional civil society organizations, and local communities working together to protect forests, achieve responsible palm oil production, and improve livelihoods. The sub-district of Aceh Tamiang became the first test case. There, the head of the district government worked with a coalition of actors to launch a deforestation-free palm oil verified sourcing area in 2019. By 2021, deforestation had plummeted. Over 5,100 hectares of degraded land were restored, and an innovative radar-based monitoring system enabled real-time responses to illegal clearing. Local patrols and community programs, run by civil society organizations and supported by government agencies and companies such as PepsiCo and Unilever, played a key role. The model worked—and it spread. Landscape programs have since been launched in Aceh Timur, Aceh Singkil, and at the provincial level. These initiatives aim to protect critical lowland forests, establish 'No-Go Zones' for palm oil expansion into forest frontiers, and support Indigenous land rights and the resolution of conflicts between communities and palm oil companies. Brands began funding alternative livelihoods and land titling for smallholder farmers. Local civil society organizations took the lead in restoration. Musim Mas, a prominent Indonesian trader previously exposed by RAN, has shifted its focus from deforestation to leadership, working with its clients to provide over $2 million for conservation projects in Aceh. These aren't just charity projects. These efforts aim to rebuild trust, repair damage, and demonstrate that commodity production doesn't have to result in destruction. Holding the Line: The Work Still Ahead Despite the victories, the threats to Leuser haven't disappeared. Rogue producers still operate. Banks continue to finance palm oil giants without full accountability. Many brands still cannot trace all their supply. Grievance trackers exist, but enforcement is inconsistent. The risk of backsliding is high. Worse still, as new global regulations, such as the EU Deforestation Regulation (EUDR), come into effect, some corporations may shift their dirty palm oil to less regulated markets. Without sustained pressure, the progress made could be undone. That's why we are expanding our efforts. In 2025, we surveyed major brands and traders on their implementation of No Deforestation, No Peat, No Exploitation (NDPE) in the Leuser Ecosystem. The findings were mixed, but offered hope. Companies with deep traceability and transparent monitoring showed measurable results. Those investing in collaborative forest monitoring and conflict resolution were beginning to collaborate meaningfully with civil society groups. But a key lesson remains: transformation requires transparency. Without visibility into sourcing practices, without robust grievance systems, and without public accountability, corporate promises hold little value. A Global Model for Environmental Justice The Leuser campaign is not just a story about forests. It's a story about power—how it's wielded, challenged, and ultimately rebalanced. It's about how grassroots movements, Indigenous communities, and international solidarity can take on global corporations and win real, measurable change. It's also a cautionary tale. Had no one answered that urgent call in 2012, the most threatened lowland rainforests of the Leuser Ecosystem might already be gone. It underscores the urgency of responding quickly to emerging threats—and the necessity of a long-term commitment to protect what remains. Now, with global forest frontlines under pressure—from the Amazon to the Congo to Borneo—the Leuser campaign offers a replicable model. It demonstrates that when policy, pressure, and partnership converge, even the most complex problems can be effectively addressed. The Next Chapter Starts Now After more than a decade of fierce activism, relentless investigation, and unlikely collaboration, the Leuser Ecosystem is still standing. It's not pristine. It's not out of danger. But it's stronger than it was. And that's because people around the world chose to act. This work is far from finished. Activists are carrying Leuser's lessons into new landscapes, challenging the expansion of industrial agriculture, and advocating for corporate accountability rooted in human rights and environmental justice. And they're asking the rest of us—consumers, voters, donors, and dreamers—to stay engaged. Because what happens next in the Leuser Ecosystem may determine the future of tropical forests everywhere.
Wall Street Journal
3 days ago
- Business
- Wall Street Journal
Global Banks Increase Fossil-Fuel Funding as Climate Pledges Crumble
Global banks significantly increased their financing for coal, oil and gas projects last year, according to a new report by climate advocacy groups, marking a reversal at a time when lenders are backtracking on climate pledges. The world's largest lenders committed $869.4 billion to companies conducting business in fossil fuels in 2024, according to the 'Banking on Climate Chaos' report published on Tuesday. This was 23% higher than the previous year and is equivalent to the gross domestic product of Switzerland. The report, which is in its 16th edition, is coauthored by a group of nonprofit organizations including the Rainforest Action Network and the Sierra Club.
Yahoo
4 days ago
- Business
- Yahoo
Banks significantly increased fossil fuel financing in 2024, analysis finds
The world's biggest banks significantly increased their fossil fuel finance in 2024, according to an analysis. The top 65 lenders – which include UK giants Barclays, HSBC, Natwest and Lloyds Banking Group – committed 869 billion dollars (£639 billion) in financing to fossil fuels, the 16th annual Banking on Climate Chaos report said. A coalition of research and campaign groups, including the Rainforest Action Network and Reclaim finance, analysed the banks' lending and underwriting to 2,730 companies active across the fossil fuel industry. These were reported in sources such as Urgewald's Global Oil and Gas Exit List (GOGEL) and Global Coal Exit List (GCEL), Bloomberg and London Stock Exchange Group (LSEG). According to this year's findings, the top banks increased fossil fuel financing by 162 billion dollars (£120 billion) from 2023 to 2024. This marks a shift in direction after fossil fuel financing had been decreasing over the previous years since 2021. Since Donald Trump's election victory in the US last year, companies across many sectors have been weakening their climate commitments, cutting ESG investments and pulling out of climate groups. Major US lenders have left the Net Zero Banking Alliance, the sector's top climate coalition, and an increasing number of banks have watered down, or abandoned, past commitments regarding fossil fuels. The Banking on Climate Chaos report found that since the 2015 UN Paris Agreement – an international deal secured in 2015 in France to limit rising temperatures – banks have now financed fossil fuels by 7.9 trillion dollars (£5.8 trillion). The analysis also suggests that loans were the top form of financing last year, with an increase to 467 billion dollars (£343 billion) from 422 billion dollars (£310 billion) in 2023. The International Energy Agency has said that no new fossil fuel projects should be developed beyond existing fields to remain within the temperature limit. However, the report found that banks have financed companies that are expanding fossil fuels with 1.6 trillion dollars (£1.1 trillion) since 2021, and 429 billion dollars (£315 billion) alone in 2024 – a rise of 85 billion dollars (£62 billion) from the year before. The report also identifies JP Morgan Chase as the largest fossil fuel financier in the world, committing 53.5 billion dollars (£39.3 billion) to fossil fuel companies in 2024. British bank Barclays was the largest fossil fuel financier Europe in 2024, at 35.4 billion dollars (£26.0 billion), according to the report, which also found it to be among the top four with the largest absolute increase in fossil fuel financing. For the other UK banks on the list, HSBC provided a total of 16.2 billion dollars (£11.9 billion) in fossil fuel financing, Natwest provided 2.7 billion dollars (£1.9 billion), and Lloyds provided 1.6 billion dollars (£1.1 billion) – although the latter comes as a decrease from 2.3 billion dollars (£1.7 billion) in 2023, according to the analysis. Banking on Climate Chaos is authored by Rainforest Action Network, BankTrack, the Centre for Energy, Ecology, and Development, Indigenous Environmental Network, Oil Change International, Reclaim Finance, Sierra Club, and Urgewald. Allison Fajans-Turner, policy Lead at Rainforest Action Network, said: 'Even in the face of worsening disasters and increasingly dire warnings of scientists and policy experts, banks actually increased their financing to fossil fuels between 2023 and 2024 and still poured billions into expanded fossil infrastructure. 'Only rapid and robust binding government regulation and oversight can make banks change course. 'Without binding regulation, banking on climate chaos will remain banks' dominant investment strategy, tanking our economy and our planet.' Tom BK Goldtooth, executive director of the Indigenous Environmental Network, said: 'Despite their greenwashing and false promises, these banks continue to bankroll the expansion of the fossil fuel industry and the false solutions that deepen climate injustice, land grabbing, and human rights abuse. 'From carbon markets to carbon capture to geoengineering techno-fixes, these schemes are distractions from the real solutions rooted in Indigenous sovereignty, traditional Indigenous knowledge, land and oceans defence, and a just and energy transition away from extractive capitalism. 'Our lands and waters are not sacrifice zones, and our Peoples are not collateral damage.' David Tong, global industry campaign manager at Oil Change International, said: 'In 2025, banks have no excuse to keep financing fossil fuel companies. 'No major oil and gas companies we analyse plan to do anything even close to what is needed to hold global warming to 1.5C.' Lucie Pinson, director and founder at Reclaim Finance, said: 'This year, banks have shown their true colours — many have walked away from climate commitments and doubled down on financing fossil fuel expansion, even as global temperatures break records. 'A few European banks may have inched forward, but for most, the lure of dirty money has proven too strong.' The PA news agency has contacted JP Morgan Chase, Barclays, HSBC, Natwest and Lloyds for comment.
