With Shell pulling out of the Arctic, Keystone XL on the ropes, and coal plants closing down across the country, I suggested yesterday that climate activists are on a roll. Adding to that sense of momentum comes a joint release from 6 huge US banks—Bank of America, JP Morgan Chase, Citi, Goldman Sachs, Morgan Stanley and Wells Fargo—urging political leaders to step up and secure a "strong global climate agreement".
Exactly what a strong agreement would look like from the banks' perspective remains unsaid, but the key point here is that they want one. And that they are very explicit that private sector action alone will not be enough to combat the threat of climate change:
"Our institutions are committing significant resources toward financing climate solutions. These actions alone, however, are not sufficient to meet global climate challenges. Expanded deployment of capital is critical, and clear, stable and long-term policy frameworks are needed to accelerate and further scale investments.We call for leadership and cooperation among governments for commitments leading to a strong global climate agreement. Policy frameworks that recognize the costs of carbon are among many important instruments needed to provide greater market certainty, accelerate investment, drive innovation in low carbon energy, and create jobs."
As with any such announcement, critics can inevitably point to inconsistencies between banks' rhetoric and their actual lending. After all, it's a fair bet that every one of these institutions has put more money into funding fossil fuels than they have into funding climate solutions. That said, the times they are a-changin'.
Citi Group, for example, has been raising awareness of the fact that preventing climate change will cost less than doing nothing at all, and that's before you factor in the negative consequences of climate disruption. Meanwhile Bank of America has agreed to dump coal mining. And Goldman Sachs was among nine corporate giants committing to move to 100% renewable electricity this week, and recently raised eyebrows by announcing that "Peak Coal" demand is pretty much here decades ahead of expectations.
Yes, we can and must push big banks to put more money where their mouths are. But they are absolutely right to call for policy certainty from government so that they can be more confident in doing so.
In the meantime, they might start running out of fossil fuel projects to lend to if environmentalists keep winning. You might say I'm a dreamer...