Big banks with HQs here are on wrong side of climate fight

Anew report showing the biggest funders of fossil fuels doesn’t feature Irish banks, so you might think Ireland is off the hook when it comes to dirty banks. But think again. Three of the top funders – Citi, Bank of America and Barclays – have their European headquarters and substantial operations here. That puts Ireland at the heart of the problem of climate change – and efforts to address it.

Banks have always supported the oil, gas and coal sectors, providing loans, bond underwriting and financial services. The problem is now we know about the harms of global warming, and yet banks are refusing to break their relationship with these industries.

Since the 2015 Paris Agreement to limit planetary warming, the 60 biggest banks have pumped $6.9tn (€6.1tn) into fossil-fuel expansion, according to the new global report “Banking on Climate Chaos”, compiled by Rainforest Action Network and a coalition of NGOs, and published today.

While Irish banks fall outside the report’s scope because of their asset size, the biggest fossil-fuel bank in Ireland is US bank Citi, with about 3,000 employees at its European headquarters in Dublin and another 3,000 in Belfast.

Citi is the second biggest funder of oil, gas and coal in the world since the Paris Agreement, with JP Morgan Chase taking top billing. Since then, Citi has pumped €369bn into fossil fuels. Bank of America and UK bank Barclays, also with their EU headquarters here, are the third and eighth biggest global fossil-fuel funders at €310bn and €219bn, respectively.

This funding has gone into some highly controversial companies and projects. All three banks fund the massive build-out of new liquefied natural gas (LNG) facilities in Texas and Louisiana, based in communities populated by low-income, black, Latino and indigenous people. Dangerous methane gas flaring, leaks and even explosions are part of life for these residents, with research showing that living near such facilities increases health problems including some childhood cancer.

Our data also shows Citi and Bank of America fund oil and gas companies in the Amazon rainforest, linking both banks to destructive oil spills and rights violations of indigenous communities there. Citi, Bank of America and Barclays are among the biggest foreign banks backing fossil-fuel expansion in Africa, pumping in a combined €12bn between January 2019 and July 2022, according to the report ‘Who is Financing Fossil Fuel Expansion in Africa?’ by Urgewald.

All three banks have generously financed corporations with the worst track records on climate, including ExxonMobil which is their biggest fossil-fuel client. Since 2015, when evidence began to emerge that ExxonMobil had known about climate change but covered it up, Citi, Bank of America and Barclays pumped a combined €40bn into the company.

Despite being neck-deep in oil and gas, slick advertising and strategic sponsorship by banks portray them as climate and community champions. The truth is that while many banks have signed up to net-zero commitments, their policies do not put them on a path to achieve that.

Few global banks have policies banning funding for companies building new oil and gas projects, despite the International Energy Agency stating that net zero can only be achieved if “there are no new oil and gas fields approved for development”.

Worryingly, Bank of America recently lifted bans on direct funding for coal and Arctic drilling. Barclays this year made a positive shift on climate, though its policy change will still allow it to fund major fossil-fuel companies.

So what can Ireland do as host to these big fossil-fuel funders? The Government must push them to commit to transparent policies that will see them phase out their financing of oil, gas and coal expansion and instead fund renewable projects. Any taxpayer subsidies (Citi received €10m from the IDA between 2005 and 2016) and joint government community projects with fossil-fuel banks should be suspended until such policies are introduced. Museums, theatres and universities should walk away from deals with banks that seek to greenwash their credentials.

To tackle climate change seriously, banks must be accountable as primary funders of the fossil-fuel industry. The stakes are too high right now to pretend it’s business as usual.