10/02/2019 05:45 EDT | Updated 10/02/2019 05:45 EDT

Why Big Banks Are Accused Of Funding The Climate Crisis

To save the world, we must follow the money, climate campaigners say.

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Rachel Heaton understands better than most the power banks have to shape our world. Heaton, a member of the Muckleshoot tribe, started to make the connection between money and climate change as an activist against the oil pipeline at Standing Rock, North Dakota. 

She was one of a group of activists who identified Wells Fargo as the principal bank investing in the controversial pipeline that passes under the Missouri River, the source of the Standing Rock Sioux Tribe’s water supply. Their 2016 campaign, organizing pickets outside dozens of the bank’s branches in their home city of Seattle, ultimately persuaded the city to close its account with Wells Fargo in February 2017. (Although Seattle did eventually go back to the bank, for lack of other options.)

Following this campaign, Heaton co-founded Mazaska Talks — mazaska is the Lakota word for “money” — in January 2017, an indigenous-led alliance aiming to bring people together across the country to demand cities pull their money away from the Wall Street banks that finance fossil fuels.

“What we’re pushing to get back to are those values of respecting Mother Earth, and understanding that if we allow these banks and these fossil fuel companies to continue exploring and taking these resources, we are no longer going to have a Mother Earth,” Heaton said.

350 Seattle
Rachel Heaton (front left) campaigning against Chase Bank in April 2019 for its funding of fossil fuel projects and the impacts on indigenous communities.  

Heaton’s group is just one element of a global divestment movement, pushing cities, religious organizations, cultural organizations, pension funds and other big institutional investors to stop investing their money in banks that fund fossil fuels and other projects which exacerbate the climate crisis. And as civil society movements ramp up, with the school strikes movement gaining momentum and spilling over into the global climate strikes in September, campaigners are continuing to demand we follow the money. 

The power of banks and other financial institutions is often overlooked when talking about tackling the climate crisis, but they are enormously powerful actors. 

For the past decade, the environmental nonprofit Rainforest Action Network (RAN) has published its “Banking on Climate Change” report, ranking the banks investing most heavily in fossil fuels. This year’s report, published in March, found JPMorgan Chase to be, by some margin, the world’s top funder of fossil fuels — investing $195 billion since 2016. The top four funders of fossil fuels worldwide, according to the RAN report, are all American. Along with JPMorgan Chase, the list includes Wells Fargo, Citi and Bank of America.

Responding to the report, a spokesman for JPMorgan Chase told HuffPost, “We recognize the complexity of climate change issues and actively engage with a diverse set of stakeholders to understand their views. We firmly believe that balancing environmental and social issues with financial considerations is fundamental to sound risk management.”

A spokesman for Wells Fargo said the bank’s loans to the oil, gas and pipeline industries make up only 1% of its total loans. Bank of America says it has been reducing its exposure to coal mining companies over the past several years. 

The report also found that despite the Paris climate change agreement in 2015, which set emissions reductions goals to prevent temperature rises which could tip the world into catastrophic climate change, financing for fossil fuels has actually increased year on year since the agreement was signed. 

It’s this impact that makes the finance sector a target for climate campaigners.

“I suspect that the key to disrupting the flow of carbon into the atmosphere may lie in disrupting the flow of money to coal and oil and gas,” Bill McKibben, founder of climate campaign group, wrote in The New Yorker this month.

McKibben should know: has been a leader in the divestment movement. In 2012, inspired by a small but vocal movement of students pressuring their colleges to divest from fossil fuels, began an international tour of college campuses to grow the campaign. The cause was taken up by progressive groups such as the Quakers and became the fastest growing divestment campaign in history.

Universities have often been at the forefront of pushing for social change. They’ve led divestment campaigns against tobacco and apartheid in the past. As long-term investors with a social mission, they are obvious institutions to take up the current divestment movement, said Alyssa Lee, the director of campus programs at Divest Ed, an organization supporting over 75 U.S. college divestment campaigns.

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Oxford and Cambridge student environmental activists protest in London in 2018 demanding that "both universities commit to full divestment from fossil fuels."

Now, the divestment campaign has moved far beyond college campuses. Climate strikes took place around the world last month, involving more than 6 million people across 185 countries, demanding the end of fossil fuels and a move to renewable energy. Lee sees that the role of divestment as key. “If you want to see the climate strike demands being met, one of the necessary steps is to call out the role of the financing and the investment in the fossil fuel industry,” said Lee. 

Over 1,110 institutions, with more than $11 trillion in assets under management, have now committed to divest, according to Those institutions include the world’s largest sovereign wealth fund, some of the world’s largest pension funds and insurers, cities, cultural institutions and the country of Ireland

And, while critics such as Bill Gates suggest it would be better to concentrate on investing in disruptive tech rather than pursuing divestment, the movement is having an impact on fossil fuel companies’ bottom lines. Goldman Sachs has credited the divestment movement with being “a key driver” of the coal sector’s difficulties in recent years, while Shell named it in the company’s most recent annual report as a “material adverse effect.”

A key part of the divestment strategy is reinvesting elsewhere, and evidence is growing that this is a sound financial, as well as environmental, strategy. Following 500 days of pressure by the campaign group Fossil Free Berlin, the City of Berlin divested its $820 million pension fund. The resulting portfolio has a 57% lower carbon footprint, while also performing better than before, said Mathias von Gemmingen of Fossil Free Berlin. “Low footprint. Higher profit. That is a dream come true,” he said.
Climate strikers in New York City on September 20, 2019. They are demanding world leaders take meaningful steps to address the climate crisis, including by transitioning away from fossil fuels. 

There are signs that the banks are taking note. In April, anopen letter co-authored by the governor of the Bank of England, Mark Carney, and François Villeroy de Galhau, the governor of the Banque de France, warned the international financial community to pay attention to climate change, and that a “massive reallocation of capital” was essential to meet the targets set in Paris. 

In June, French bank Crédit Agricole announced that it would stop financing coal. And in July, the European Investment Bank (EIB), the world’s largest international public lending institution, released a new draft on energy policy to stop funding fossil fuel projects by the end of 2020 and invest in clean energy instead. The bank credited the pressure put on it by stakeholders for its change in direction. A final decision will be taken by the board of governors in October, although there is resistance from European countries such as Germany that are still keen to exploit gas reserves.

It’s not just banks that campaigners have in their sights. Insurance companies are “an often overlooked piece of the fossil fuel economy,” said Elana Sulakshana, energy and finance campaigner at RAN, but, she added, “without insurance, you can’t build new projects.” 

On Sept. 20, students on the climate strike in Boston targeted the insurance giant Liberty Mutual, with banners demanding companies “stop insuring climate change.”

We’re pushing back against that desire of corporations to put profit above all else.

“The hypocrisy of it is really striking, because insurance companies have known about climate change for decades and decades now,” Sulakshana said. “Yet they’re continuing to insure fossil fuels, even as they are withdrawing insurance from places that are facing climate impacts.” In wildfire-affected areas in California, for example, many homeowners had their policies canceled

Sixteen major insurance companies have now adopted policies restricting coal underwriting, more than half of them in the past year. Peabody Coal noted in its 2019 annual filings that it could see increased costs “particularly in light of some insurance companies’ announced unwillingness to support fossil fuel companies.” 

“We’re really seeing a sea change, around coal in particular,” Sulakshana said. “Now that needs to be replicated with oil and gas as well.”

Despite these victories and shifts, campaigners say they still have a long fight ahead of them. “We’re pushing against 40 years of free market fundamentalism,” said Alec Connon, of 350 Seattle, a local affiliate of “We’re pushing back against that desire of corporations to put profit above all else. We are asking them to put people and planet above profit.”

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