Bank of America removes bans on coal and Arctic drilling

February 3, 2024
Bank of America has dramatically backpedaled on climate commitments and removed explicit bans on financing coal mines and Arctic drilling.

The move is being slammed by climate groups as an affront to the recent global agreement by governments at COP to transition away from oil, gas and coal and is part of a concerning trend among banks headquartered in the US to weaken their stance on climate.

Bank of America’s updated Environmental and Social Risk Policy removes language from a previous policy that it will “not directly finance” oil exploration and extraction in the Arctic, thermal coal mines, or new coal-fired plants. Instead, these activities will now go through “enhanced due diligence.”

The Bank of America policy change follows a November announcement by JPMorgan Chase of an “energy mix” for calculating its financed emissions, which will include renewable energy and make it harder to assess. Citi’s chief executive, Jane Fraser, has also signaled a shift in priority.

US banks sent large delegations to the recent climate talks at COP 28 in Dubai: Citi sent 26 staff and Bank of America sent 18, including chief executive Brian Moynihan.

The top global banks have pumped $5.5 trillion into oil, gas and coal expansion since 2016. Bank of America is the fourth largest funder at $280 billion, and is a major financier of fossil fuel expansion in the Amazon and of the LNG build-out. JP Morgan Chase is the biggest funder at $434 billion and Citi is number two at $333 billion.

Other global banks have made major policy changes in line with climate action: HSBC announced in 2022 that it was ending funding for new fossil fuel projects while Danske Bank last year said it would stop financing oil and gas projects and companies.

Quotes

Hannah Saggau, Stand.Earth

”The ink is barely dry on the global agreement at COP28 to transition away from coal, oil and gas, and now Bank of America has decided to significantly weaken their restrictions on financing the most egregious fossil fuel projects: in the pristine Arctic and dirty coal. Bank of America’s backpedaling on its climate commitments proves that its loyalties lie with the fossil fuel industry, not the communities they purport to serve. The bank must explain to investors, shareholders, customers and employees why it has chosen to jeopardize the global consensus on climate action.”

Aditi Sen, Rainforest Action Network

“Wall Street banks are rolling back fossil fuel finance policies against the tide of history at a time of intensifying climate chaos. Bank of America, in addition to being one of the world’s worst financiers of fossil fuels, recently updated their Environmental and Social Risk Policy Framework to open a lane for fossil finance previously (and rightly) ruled out, including around Arctic drilling, new coal-fired power plants and thermal coal mines. JPMorgan Chase, long the single largest financier of fossil fuels and fossil expansion, and the only Wall Street bank to finance the recent Rio Grande LNG project, rolled out an energy mix target that buries their fossil fuel financing from public scrutiny.”

Lucie Pinson, director of Reclaim Finance

“Bank of America’s backtrack may seem inconsequential at first glance, given its limited involvement in directly financing new fossil fuel projects. However, the audacity lies in its blatant endorsement of clients like Glencore and Sasol, corporations that actively contribute to climate chaos and inequalities by persistently developing new coal plants. This move is nothing short of scandalous, as it directly contradicts the global efforts to limit global warming to the 1.5°C target outlined in climate agreements. By embracing entities that undermine environmental sustainability, the bank appears to be in clear opposition to its own net-zero pledge, casting doubt on its commitment as a member of the Net-Zero Banking Alliance (NZBA). This raises serious concerns about the bank’s priorities and values, signaling a disconcerting willingness to act counter to its stated environmental goals”


Contact: Judith Crosbie | judith.crosbie@sunriseproject.org | +1 929 584 3344