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Former Unilever CEO Paul Polman called out large banks for financing industries that cause pollution instead of renewable energy.
In an interview with CNBC, at the climate summit COP26 in Glasgow on Tuesday, Polman said, “We still see some of the major banks doing more fossil fuel financing, coal financing than green energy and that’s a big no-no.”
A report published by Banking on Climate Chaos, a group of organizations working on climate change, reported that since the Paris Agreement, in 2015, 60 of the world’s biggest banks have financed fossil fuels with $3.8 trillion.
Major U.S. banks also feature in the report, which was published in April 2021, and have been categorized under the worst policies in phasing out support for fossil fuels.
Balancing his hard-hitting statements, Polman said that a few banks are moving towards change, but was quick to add that this was necessarily on “moral grounds” but on “economic grounds”.
“People are starting to realize that implementing the Sustainable Development Goals (SDGs) — which cost $3 to $5 trillion a year — is significantly less than dealing with these horrendous consequences of inaction. And the financial market is the first one to understand that. I don’t think they are moving on moral grounds, I want to be honest there, but they are moving on economic grounds,” he told CNBC.
Drawing the curtains
Meanwhile, major banks at the COP26 have pledged a significant amount of money to reach zero emissions by 2050. Bank of America President Brian Moynihan said, “To get there, we will provide $150 billion in financing through 2030 over $1 trillion, to the effort,” at the COP26.
Interestingly, according to the Banking on Climate Chaos report, Bank of America’s fossil fuel financing since the Paris Agreement amounts to $198 billion and has continued to grow since then.
The bank is also a part of a task force called the Sustainable Markets Initiative, which includes JPMorgan, Barclays, and Credit Suisse. The task force has launched a guide for financial services firms to help their clients reach net-zero emissions.
All the four banks feature in the Banking on Climate Chaos report with low policy scores on how to phase out fossil fuel financing.
Inputs from CNBC
Picture Credits: Clean Bowled