An analysis produced by portfolio.earth called the Bankrolling Extinction report reveals how the world’s largest investment banks to finance industries causing biodiversity loss. Last year alone, over $2.6tn (£1.9tn) of financing was linked to ecosystems and wildlife destruction. There is a dangerous lack of policies in the lending system to regulate the impact on the natural world. As it stands, banks don’t value nature and freely pay for its ruin.
The top 50 investment banks – led by Wall Street giants JP Morgan Chase, Bank of America, and Citigroup – provided financial services to sectors driving deforestation, the collapse of life-sustaining ecosystems, and mass extinction. The financial institutions don’t monitor and measure the impact of their activities. There should be rules to protect ecosystems when providing loans or underwriting services. Nature is critical to human life and livelihoods. Yet there are none.
Finance, economics, and environmental experts from the portfolio.earth initiative came to the $2.6tn figure by matching financial services provided with sectors identified by the United Nation’s Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) as primary drivers of biodiversity loss. The sectors include mining, fossil fuels, food, forestry, infrastructure, transport, tourism, and logistics.
Former chair of IPBES, Sir Robert Watson, said:
The task of rescuing nature must fall to the world’s finance industry, yet the vast majority of banks still remain unaware of their impacts on the natural world. Bank by bank, the report authors found a cavalier ignorance of – or indifference to – the implications, with the vast majority unaware of their biodiversity impacts or associated balance sheet risks. In short, this report is a frightening statement of the status quo. Changing this mentality is the first priority to drive change.
The top ten banks most exposed to environmental harm include Bank of America, Barclays, BNP Paribas, Citigroup, HSBC, JP Morgan Chase, Mitsubishi UFJ Financial, Mizuho Financial, SMBC Group, and Wells Fargo. The portfolio.earth initiative calls on these and all other banks to improve disclosures and revise how they assess potential environmental damage supported by their financial services. Governments have also been encouraged to hold banks liable for damages caused.
The leading author of the IPBES report, Prof Kai Chan of the University of British Columbia, said:
A global sustainable economy sits at the center of humanity’s much-needed transformation to meet the climate and ecological crises. And at the center of that sit the banks and the financial institutions whose investment power development around the globe.
Imagine a world in which projects can only raise capital when they have demonstrated that they will contribute meaningfully and positively to restoring the planet’s bounty and a safe climate for all? That’s the future this report envisions and builds toward.
Under pressure from environmental campaigners and investors, an increasing number of investment banks have enacted restrictions on arctic oil and gas, coal, and tar sands extraction since the 2016 Paris climate agreement. However, an analysis by the Rainforest Action Network found that the 35 leading banks have funneled over £2.2tn ($2.66tn) into fossil fuels since the international agreement. Most banks are not aligning themselves with the goals of the accord to limit greenhouse gas emissions, and we will all suffer the consequences for their actions.
