Three years ago Bank of America said it would no longer lend for new coal mining or for new oil exploration in the Arctic. But last week they said, never mind, in perhaps the single most irresponsible about-face of the climate era.
By Bill McKibben
Bank of America has its roots in California. Founded in Los Angeles in 1923, it was acquired by a San Francisco bank, which took the name in 1930—and over time it has grown to become the world’s second-largest bank by deposits, second only to New York-based Chase.
I tell you this for two reasons. One, California is, as of this writing, being absolutely battered by an “atmospheric river” that has knocked out power to hundreds of thousands and caused mudslides on high ground along the Pacific Coast. As Andrew Dessler pointed out yesterday, the physics are pretty simple: “A warmer planet has more water vapor in the atmosphere. And, everything else being the same, an atmospheric river carrying more water vapor will cause more rainfall when it hits land and starts rising.”
And second, Bank of America is a proximate cause of this kind of chaos, because it refuses to stop lending for fossil fuel expansion. Indeed, last week it engaged in perhaps the single most irresponsible about-face of the climate era.
Three years ago—in the wake of the Greta-inspired mass uprising of young people around the world—Bank of America apparently felt it had to make some gesture, so it chose a pretty easy route to demonstrate its newfound greenness. It said it would no longer lend for new coal mining or coal-fired power plants or for new oil exploration in the Arctic. These were seen to be beyond the pale because… well, they are. They represent some of the most egregious possible insults to this planet.
But last week they said, never mind. If you want some money for a new coal mine, our window is open again. If you’re an oil company that feels like searching for oil in the Arctic now that you’ve melted it, we can make a deal. As the Times reported last week
Bank of America’s change follows intensifying backlash from Republican lawmakers against corporations that consider environmental and social factors in their operations. Wall Street in particular has come under fire for what some Republicans have called “woke capitalism,” a campaign that has pulled banks into the wider culture wars.
That is to say, they’re far more afraid of some oil-soaked GOP state treasurer than they are of an atmospheric river bearing down on the world’s fifth largest economy. It’s proof, of course, that their words about climate change were just pious nonsense. They’d insisted that they understood how crucial it was to change: “Climate change is no longer a far off risk but rather a global concern with impacts that are already beginning to unfold, including increased frequency and severity of extreme weather conditions, melting glaciers, loss of sea ice, accelerated sea-level rise, and longer, more intense heatwaves and droughts.” But that was, we now understand, to be understood entirely as greenwashing, an effort to reduce the heat they were temporarily feeling.
The actual heat they could care less about. It’s not like something has happened since 2021—except the hottest year in the last 125,000, which takes us back even before the advent of money, if BofA executives can even imagine such a time.
But the only weather change they’ve noticed is political. Out with Greta et al., in with GOP politicians saying scary things. And BofA is not alone. The Bureau of Investigative Journalism reported last week that global giant HSBC, despite a solemn promise that it would stop financing new oil and gas fields, has found ways to keep
selling shares in the refining business of Saudi Aramco, one of the most aggressive expanders of oil and gas. An investor in HSBC told the Bureau of Investigative Journalism that the bank’s policy has been cleverly worded to allow it to fund some of the world’s biggest polluters while boasting about its green credentials.
An analysis of Refinitiv data by TBIJ has found that in the year since HSBC’s new policy was announced, the bank has helped raise more than $47 billion (£37 billion) for companies that are expanding the production of oil and gas, despite dire warnings from scientists that this will push the world beyond its survivable limits.
This is all just sick. The International Energy Agency said in 2021 that if we had a chance of meeting the Paris temperature targets, finance for fossil fuel expansion had to end now. But the banks, and big asset managers like BlackRock, just can’t help themselves. For short-term gain, and to protect themselves from attack by right-wing politicians, they are willing to break the back of the planet’s climate system. The unbelievable economic fallout of those decisions—the fact that the world be immensely poorer, with its prospects hugely degraded, by the resulting rise in temperature—will be the problem of some other CEO down the road; it’s hard not to see our financial system as a suicide machine.
Fighting back is hard. At places like Third Act, we’ve done loads of sit-ins and pickets, and it helps—that’s the kind of action that forced these pledges in the first place. But we need some big players on our side. We’re trying, for instance, to convince Costco to pressure its banker Citi; we need the big tech companies, too, to worry not just about about the climate impact of their phones but also about the climate impact of their money (which is far far larger).
We have some champions, of course, but they’re not as hard-hitting as their Red State counterparts. Brad Lander, comptroller of New York City, gets credit for being willing to take the banks on—last week he announced that he’d try to get them to disclose their ratio of dirty energy to clean energy lending, which would certainly be good to know.
“Despite all their talk, the big banks have made little progress in the energy finance transition over the past couple of years,” said Comptroller Lander. “As long-term investors exposed to climate risk, we can’t just take their word for it. Reporting transparently on their ratios of clean energy to fossil fuel finance is key to seeing whether or not they are living up to their net-zero commitments. Right now, they aren’t—and that must change. Our planet, our economy, and our investment portfolios are all at stake.”
All of that is true. But if the planet is at stake, then perhaps a somewhat harder shove might be required. Lander’s plan seems like a way to win slowly, which on most political issues makes sense. But unless he also has a plan to refreeze a melted Arctic, this kind of pressure seems a tad too gentlemanly.
As you can tell, this about face by BofA stings. It takes so much work to move these guys an inch, and then given half a chance they slide right back to where they were before.
Small banks seem able to make money doing decent things—here’s a nice story about a merger of local California banks where they pledged, among other things, to “refrain from any new financing of fossil fuel extraction activities, especially expansion projects that would develop and lock in dependence on new fossil fuel infrastructure, either through corporate or project-based finance, subject to compliance with banking rules and regulations.”
But the big boys? Damn them to hell, which is clearly where they’re content to send all of us.
Bill McKibben is the Schumann Distinguished Scholar at Middlebury College and co-founder of 350.org and ThirdAct.org. His most recent book is “Falter: Has the Human Game Begun to Play Itself Out?.” He also authored “The End of Nature,” “Eaarth: Making a Life on a Tough New Planet,” and “Deep Economy: The Wealth of Communities and the Durable Future.”
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Photo: Mike Mozart Creative Commons BY 2.0