FOR IMMEDIATE RELEASE
May 15, 2020
Washington, D.C. — Today, Business Forward Foundation issued a business leader statement on sustainable banking. In a letter addressed to the Commodity Futures Trading Commission, more than 500 business leaders support requiring banks to disclose financed emissions. You can read the letter and business leaders’ comments here.
In the four years since the Paris Climate Agreement, global banks directed $2.7 trillion into financing fossil fuel companies. Financing grew from $640 billion in 2016 to $736 billion in 2019. Lending to exploration companies working to bring new gas, oil, and coal fields online increased by 40% in 2019 alone.
“Seven out of 10 Americans would prefer to use a ‘sustainable’ bank, but we don’t require banks to disclose to clients and investors how much they’re lending to coal, oil, and gas companies,” explained Jim Doyle, President of Business Forward Foundation. “Universal, comprehensive, and comparable bank disclosure would go a long way towards fixing our broken energy markets.”
Business leaders submitted comments along with their signatures. Some drew connections between COVID-19’s effects on our financial system and the similar disruptions that physical effects of climate change may cause: “[T]his is an important issue that must be addressed in light of the unprecedented financial circumstances derived out of COVID-19 and the uncertainty of natural disasters that would impose financial strain down the road,” said Linda Dawkins from Corona, California.
They also emphasized how essential financial transparency is for identifying economic risks: “It is important for investors to understand the full risks for any company in which they invest. Investors cannot easily identify risks when data on bank lending to the fossil fuel industry is not readily available.” said Dana Coble from Flagler Beach, Florida.
In addition to curbing fossil fuel lending, many business leaders wish to see banks making more long-term investments in sustainable projects – like clean energy. “It is imperative that the finance community accept the dire reality of climate chaos and shift its loan and investment focus away from fossil fuels and into sustainable agriculture, a sustainable health system and a sustainable economy,” said Carl Arnold from East Meredith, New York.
“If regulators require meaningful disclosure, bank lending will change,” explained Doyle. “When Goldman Sachs announced it would stop investing in arctic drilling projects last December, JP Morgan Chase, Wells Fargo, Citi, and Morgan Stanley followed with similar announcements of their own.”
ABOUT BUSINESS FORWARD FOUNDATION
The Business Forward Foundation is an independent research and education organization that takes a business-minded look at policy issues affecting America’s economic competitiveness. Our work combines insights and advice from business leaders across the country with rigorous policy analysis. Through white papers, issue briefs, conference calls, and other events, we educate policy makers and the public about climate change, immigration reform, infrastructure investment, the future of work, and other critical issues.