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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.
Yahoo
a day ago
- Business
- Yahoo
Banks reverse course, increase fossil fuel investments in 2024: report
This story was originally published on ESG Dive. To receive daily news and insights, subscribe to our free daily ESG Dive newsletter. The world's largest banks increased fossil fuel financing by $162.5 billion year-over-year in 2024, reversing course on decreasing investments in the sector — a trend they followed for the past two consecutive years — according to the latest Banking on Climate Chaos report released Tuesday. The release represents the 16th annual report documenting the largest banks' commitments to financing fossil fuels, with financing for fossil fuel expansion also increasing in 2024 in another reverse of trends. The report from the Rainforest Alliance Network, Sierra Club, Reclaim Finance and other climate organizations found that the 65 largest global banks committed $869 billion to fossil fuel companies in 2024, as 45 of the covered banks increased their year-over-year fossil fuel financing. The top four U.S. banks — JPMorgan Chase, Bank of America, Citi and Wells Fargo — represented 21% of total global fossil fuel financing accounted for in the report. RAN Senior Research Strategist Caleb Schwartz, one of the report's co-authors, called it a 'pretty significant year for the report given the reverse in trajectory. 'We're seeing a pretty substantial increase between 2023 and 2024, and we track these annual increases as an indicator of the banks' commitment,' Schwartz said in an interview with ESG Dive. 'Banks are putting money into fossil fuels, they're putting money into fossil fuel expansionism.' JPMorgan, Bank of America and Citi represented the top three financiers of fossil fuel expansion in 2024 and the top three financiers of fossil fuels overall last year, according to the report. The trio of U.S. banks also are three of the four banks who increased fossil fuel financing by more than $10 billion last year, along with British bank Barclays. U.S. banks contributed $289 trillion to fossil fuel financing in 2024, accounting for about one-third of the global financing covered in the report. The increased financing came as a number of large U.S. based banks departed from climate coalitions or otherwise walked back climate commitments. 'The retreat by U.S. banks from robust climate commitments is unacceptable, deeply irresponsible, and a clear capitulation to political pressure,' Sierra Club's Fossil-Free Finance Campaign Senior Strategist Jessye Waxman said in a June 17 release. 'Banks must shift away from risky financing and commit to reducing emissions via the companies they finance, with a genuine focus on helping to decarbonize the economy and support the urgent and necessary clean energy transition.' The report documents lending the 65 largest global banks made to 2,730 companies at the subsidiary level with fossil fuel businesses and 1,800 parent-level companies. The covered banks were given the opportunity to see and confirm their data before its publication, according to the researchers. RAN Policy Lead Allison Fajans-Turner, also a co-author of the report, told ESG Dive that despite banks adopting policies that prohibit project-level financing for fossil fuels, they often don't prohibit financing to the companies who own and develop such projects. She said that while the banks have said that funding is to help those companies prepare for the energy transition, 'third-party experts have looked at the transition plans that fossil fuel majors have penned and found that they are not credible.' 'Unfortunately, we're seeing banks put forward policies that have really large loopholes in them,' Fajans-Turner said in an interview. 'Either banks are not doing their due diligence to look into the credibility and the strength of the transition plans that their clients are presenting to them, or they have decided that they're going to lend to them anyways.' Recommended Reading Global banks have spent $6.9 trillion on fossil fuels since 2016: report Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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
7 days ago
- Politics
- Yahoo
Sierra Club: EPA plan to repeal emission standards would ‘put Americans at risk'
The Trump administration's EPA seeks to repeal all greenhouse gas emission standards on the power sector. (Photo by Robert Zullo/States Newsroom) Estimates from the Sierra Club found Iowa utilities would be allowed to release 26 million tons of carbon emissions annually, if the U.S. Environmental Protection Agency finalized a proposal to repeal carbon pollution standards. In its explanation for the proposal, EPA claims greenhouse gas emissions from fossil fuel-fired plants 'do not contribute significantly' to dangerous air pollution and that removing pollution standards set by the agency under previous administrations would save $19 billion in regulatory costs over two decades. The Sierra Club, which is an environmental organization with chapters across the country, said the power sector is the largest stationary source of greenhouse gas emissions in the U.S. and that exposure to these air pollutants are linked to a higher risk of heart disease, respiratory diseases, pregnancy complications and cancer. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX 'The Trump Administration continues to put the American people at risk by stripping away environmental safeguards proven to clean up the air we breathe and improve public health,' Pam Mackey Taylor, director of the Iowa Chapter of the Sierra Club, said in a statement. The proposal would repeal regulations put in place in 2015 and in 2024 that put emission guidelines and standards on coal-fired power plants, via Section 111 of the Clean Air Act. EPA Administrator Lee Zeldin's proposal argues the Clean Air Act requires the agency to determine, before it issues regulations, that pollutants emitted by fossil fuel-fired power plants 'causes, or contributes significantly to, air pollution' that is 'anticipated to endanger public health or welfare.' The current administration argues EPA in the past created regulation standards without this determination. EPA data shows that 25% of U.S. greenhouse gas emissions in 2022 came from the power sector, which was just slightly less than the transportation sector which accounted for 28% of domestic greenhouse gas emissions. In an EPA presentation explaining the rules which were finalized in July 2024, the agency estimated the additional carbon pollution standards would have cut 617 million metric tons of carbon dioxide and other 'harmful air pollutants that are known to endanger public health.' Sierra Club charted the impacts these regulations would have had, state-by-state based on operating coal-powered plants and their estimated closure dates. EPA regulations around carbon pollution standards for the power sector have been challenged in the past, most recently with a 2022 U.S. Supreme Court case that repealed part of the 2015 Clean Power Plan emission guidelines. The proposal to repeal the most recent rules alleges Biden-era EPA leadership did not change course following the Supreme Court ruling, but created similar, rules with expanded regulations. Acting under a handful of executive orders from President Donald Trump, and Zeldin's 'Powering the Great American Comeback' initiative, the agency seeks to repeal 'all' greenhouse gas emission standards on the power sector, or alternatively, just the 'most burdensome set of requirements.' The notice said this will 'ensure affordable and reliable energy supplies and drive down the costs of transportation, heating, utilities, farming, and manufacturing while boosting our national security.' The proposal will have a public hearing 15 days after it is published in the Federal Register, where EPA will also accept public comments on the proposed rules 45 days after it is published. Those interested can search for the docket in the federal register with Docket ID number: EPA-HQ-OAR-2025-0124. 'During the public comment period, we will continue to fight for clean air and protect our communities being harmed by Trump's shortsighted actions,' Mackey Taylor said. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
11-06-2025
- Politics
- Yahoo
US Supreme Court sparks backlash after ruling in favor of controversial railroad project: 'Endangers local communities'
The U.S. Supreme Court delivered a blow to environmentalists, siding with a railroad expansion in Utah to help transport crude oil. As the Guardian reported, the court ruled unanimously in favor of the railroad, deciding that the original lower court based its ruling to stop the railroad on an environmental impact assessment that was too limited in scope. According to The Salt Lake Tribune, the expansion of the Uinta Basin Railway would add around 88 miles of track and could connect oil suppliers with a wider market, such as refining facilities on the Gulf Coast. The project was approved in 2021 but paused in 2023 after multiple parties challenged it. The recent ruling to continue the project worries environmentalists around the country. It challenges protections that have held since the 1970 National Environmental Policy Act. NEPA sets forth a process for agencies to assess the environmental, social, and economic impact of a particular project, followed by a period of public review and community comments. Siding with the railroad expansion could challenge environmental protection precedents. Ashfaq Khalfan, Oxfam America's director of climate justice, said, "The Supreme Court's decision endangers local communities, many of them Indigenous and rural, in favor of the dirty energy status quo," per the Guardian. The Supreme Court decision is a danger to communities around the railway. For one, the transported oil poses a large threat to the Colorado River, its ecosystem, and the communities it serves if the train derails or oil spills, as The Colorado Sun reported. Communities can be exposed to pollutants from a variety of industrial activities. One of the most famous instances is the story of Erin Brockovich, who began a legal case against Pacific Gas and Electric Company regarding groundwater contamination in California. Do you think your city has good air quality? Definitely Somewhat Depends on the time of year Not at all Click your choice to see results and speak your mind. Pollution impacts communities around the world every day. Air pollution health risks include respiratory issues, cardiovascular disease, and cancers. Polluted water can cause a variety of gastrointestinal issues, skin conditions, and cancers. "Our bedrock environmental laws, like NEPA, are meant to ensure people are protected from corporate polluters. … Today's decision will undoubtedly help the fossil fuel industry," said Sierra Club senior attorney Nathaniel Shoaff. Most often, marginalized groups bear the brunt of environmental hazards and pollution. With mass layoffs in key government organizations like the Environmental Protection Agency, scientists and experts warn of repercussions for the health of people and the environment. Organizations like the Sierra Club and the Center for Biological Diversity are working to protect the people and environments most impacted by corporate decisions like this railroad expansion. Voting for political leaders who recognize the serious nature of the changing climate and its effects, regardless of which side of the political aisle they fall on, is also vital to continuing to protect the environment. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
