# Major banks freshly pledge trillion-dollar spending on climate change but remain scrutinized for oil-patch financing
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Major banks freshly pledge trillion-dollar spending on climate change but remain scrutinized for oil-patch financing
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JPMorgan Chase will spend $2.5 trillion over 10 years; Citi comes forward with $1 trillion
Major banks, fresh off strong earnings periods while COVID-19 shut down much of the world, have expanded their pledged spending toward sustainable and climate-minded sectors.
JPMorgan Chase & Co.
JPM,
announced Thursday it will spend $2.5 trillion over 10 years, beginning this year through the end of 2030. The firm will use its capital and expertise to help clients, customers and communities address these vital issues, it said.
Citigroup Inc.
C,
meanwhile, said Thursday it commits $1 trillion for sustainable finance by 2030, extending its current environmental finance targets of $250 billion by 2025 to $500 billion by 2030.
Citi’s earnings more than tripled in the latest reporting period. Its stock is up 17% so far in 2021.
Read: Buy bank stocks after Citi, Goldman Sachs, BoA and JPMorgan earnings wowed, says this research group
Banks have drawn criticism that despite such green-focused pledges, they continue to finance growth in the traditional energy sectors tied to global warming.
Lawmakers are also mixed in their reaction to proposed financial-sector regulation that calls for greater disclosure on climate-related risk, particularly for investors, but may limit lending to oil and gas interests.
JPMorgan said Thursday it aims to finance and facilitate more than $2.5 trillion over 10 years for “long-term solutions that address climate change and contribute to sustainable development.”
This long-term target aligns, it says, with the firm’s already pledged Paris climate pact-based financing strategy and will help accelerate the transition to a low-carbon economy by encouraging actions that set a path for achieving net-zero emissions by 2050. The firm will share an update and additional information on its Paris-aligned strategy with the release of its annual ESG Report this May.
Related: Bank of America matches efforts by Morgan Stanley, JPMorgan Chase with net-zero financing goal
Read: Kerry says Biden poised to issue executive order to force banks and investors to reveal climate exposure
The new 10-year effort will further efforts by the J.P. Morgan Development Finance Institution‘s objective to promote economic and social development in emerging markets.
“Climate change and inequality are two of the critical issues of our time, and these new efforts will help create sustainable economic development that leads to a greener planet and critical investments in underserved communities,” said Jamie Dimon, chairman and CEO, adding that there’s scope for the business world and government to move the needle in slowing man-made climate change.
Opinion: How the Fed could give a green light to environmentally sustainable investments
For its part, Citi says its $1 trillion pledge aligns with the ambitious agenda of the United Nations’ Sustainable Development Goals (SDGs), and builds on earlier initiatives.
Spending at the bank is earmarked for renewable energy and clean technology, water conservation and green buildings, as well as sustainable agriculture and land use — “which will further accelerate the transition to a sustainable, low-carbon economy that balances the environmental, social and economic needs of society,” the bank said.
Citi in March announced its commitment to net zero emissions by 2050.
The new spending may also go toward investing outside of strictly environmental efforts, including education, affordable housing, health care, economic inclusion, community finance, international development finance, racial and ethnic diversity and gender equality.
Banks may pledge to be better stewards of the planet through emissions reduction and other actions, but their money keeps the oil pumping for now.
Some 60 of the world’s largest commercial and investment banks have in total put $3.8 trillion into fossil fuels from 2016 to 2020, the five years after the Paris agreement was signed. That’s according to a report called Banking on Climate Chaos 2021 published late last month.
The voluntary multinational Paris pact’s goal is to limit global warming to well below 2 degrees Celsius, and preferably to 1.5 degrees, compared to pre-industrial levels. Beyond oil
CL00,
and natural gas
NG00,
financing, global coal projects also continue to be funded.
Related: Goldman Sachs pushed to disclose if its oil-patch financing works against net-zero emissions goal
By
Rachel Koning Beals
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