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Fifty-seven percent was spent on underwriting to help fossil fuel companies raise additional financing from capital markets, a service for which companies pay banks sizable fees. ShareAction found that 92 percent of the funds NZBA members devoted toward the 50 most expansionary fossil fuel firms were for general corporate purpose-meaning few if any restrictions on how they could be spent-while just 8 percent was for dedicated, project-specific financing. Their complete targets aren’t due until in 2024, three years after joining.
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NZBA members that joined in April 2021 are due to present their first set of “intermediate 2030 targets” this fall. “The Guidelines will continue to evolve over time as methodological and data approaches develop,” she said. However, we do not prescribe which scenarios must be used.” (As with many of the emissions-reductions scenarios banks are using to formulate their net-zero plans, the IEA’s net-zero report released last year is massively optimistic about the role carbon capture will play to draw down excess emissions after 2050.)Ĭleverly noted that these documents were drafted before the IEA released its 1.5 degree scenario. In an emailed statement on Monday, Adrienne Cleverly, a spokesperson for the NZBA, told me the group “had not had sufficient time to review the claims of the ShareAction report, and so cannot comment directly on any details it might contain.” Neither the NBZA’s commitment statement nor its target-setting guidelines contain language about phasing out fossil fuel investments, although the spokesperson clarified that the requirement that members set sector-specific targets in line with the 1.5 degree goal “invariably means a restriction in investment and financing of fossil fuels over time.” The guidelines, she wrote, “require the use of a robust, science-based 1.5☌ low/no overshoot scenario to be used for target setting. The International Energy Agency, by contrast, reported last year that capping warming at 1.5 degrees Celsius ( 2.7 degrees Fahrenheit) would mean no new oil and gas development beyond what had already been committed to in 2021. The global banking sector has provided $3.6 trillion in bonds and loans to the fossil fuel industry over the same time period. Since the Paris Agreement was brokered in 2016, the European banks analyzed have furnished upstream oil and gas expanders with $400 billion, and they “show no signs of stopping,” the report writes. Half of that financing was provided by four of the founding signatories of the Alliance: Barclays, BNP Paribas, Deutsche Bank, and HSBC. These members claim they are “using robust, ambitious, science-based targets to decarbonise their lending and investment portfolios on a 1.5 degree climate trajectory.”Ī new report from the U.K.-based charity ShareAction, however, now finds that 25 European NZBA members have provided at least $38 billion in financing to 50 of the most expansionary upstream oil and gas companies on earth. By the time of COP26, the NZBA had more than doubled its membership, which is now said to represent $68 trillion in banking assets-44 percent of the world total. “In the months and years ahead,” he wrote, “judge all financial institutions not by what they say but by their numbers: the total dollars of transition financing, the amount of polluting, the stranded assets retired, the emissions eliminated, and the timelines to get to net zero.” In April, Carney and State Department climate envoy John Kerry had launched the Net-Zero Banking Alliance, or NZBA, an “industry-led, U.N.-convened” group of 43 banks from 23 countries committed to achieving net-zero greenhouse gas emissions by 2050. As world leaders settled into their digs in Glasgow, Scotland, last October for the climate conference known as COP26, Bank of England head turned sustainable investment guru Mark Carney had a stern warning for his friends in the financial sector.