10 Exhibit 2:
11 Wildlife:
The WHWPA contains vegetation alliances that host a diverse array of species such as those listed in Exhibit 3; Potential Endangered, Threatened, and Species of Concern. Over 100 species of birds are expected to be present in the WHWPA based on eBird data collected at a nearby birding “hotspot” which shares a similar habitat (Exhibit 4). In consultation with members of the local Peregrine Chapter of the Audubon Society, the eBird “Cow Mountain BLM Valley View Trail” Hot Spot list was adapted to reflect the species of birds one can expect to find within the Western Hills Watershed Protection Area (see Exhibit 4 Expected Bird List). Local birding experts joined City staff on May 31st, 2023, to assess the site. A two and a half hour birding trip covering approximately 2.5 miles of road allowed for the observation of 28 species of birds.
Additionally, Gordon Leppig’s 2019 site assessment noted areas that appear “to provide nesting and foraging habitat for the State and Federally threatened northern spotted owl (Strix occidentalis ssp.caurina). Birds likely to be seen on the WHWPA, not likely to be seen on the valley floor, include Mountain Quail, California Thrasher, Bell’s Sparrow, and Banded Pigeons.
Isolated rock outcroppings could be occupied by Peregrine Falcons.
While the lower portions of Doolin Creek can potentially provide habitat for Federally endangered steelhead trout (Oncorhynchus mykiss), the WHWPA does not have year-round blue line streams to provide suitable habitat for these species. A number of drainages crisscross the property. The drainages are not riparian and initial assessments suggest no class 3 waterways.
The California Department of Fish and Wildlife (CDFW) records the status and locations of rare plants and animals. It makes this information available to natural resource professionals through the California Natural Diversity Database (CNDDB). The CNDDB database identified a rare animal species, the red-bellied newt or Taricha rivularis, near and possibly within the Western Hills along one or more of the creeks.
According to CDFW, “Red-bellied newts are a California Species of Special Concern and are endemic to California. They are found in redwood and coastal forests from southern Humboldt county to Lake and Sonoma counties”. They are mainly terrestrial but will breed in streams.
Adults will head to streams to reproduce when the rain starts in the fall. This newt species has impressive longevity for an amphibian, estimated between 20 and 30 years. Their diet consists of many types of invertebrates. Furthermore, CDFW states, “agriculture and urban development pose a threat because of the alteration and degradation of streams these processes require. The development of natural areas can also bring more vehicle traffic which poses a serious threat to this small species, especially during migrations to breeding areas.” Currently, the CNDDB has 136 red-bellied newt occurrences throughout its range.
12 Exhibit 3: Potential Endangered, Threatened, and Species of Concern (From CDFW 9 Quad Species List; July 22) Search 9/28/2022 Element_Type Scientific_Name Common_Name
Federal_
Status
State_
Status
CDFW_
Status
CA_Rare_Plant
_Rank
Animals -
Amphibians Rana aurora
northern redlegged frog None None SSC -
Animals -
Amphibians Rana boylii
foothill yellowlegged frog None Endangered SSC -
Animals -
Amphibians Taricha rivularis red-bellied newt None None SSC - Animals - Birds Accipiter gentilis northern goshawk None None SSC - Animals - Birds Aquila chrysaetos golden eagle None None FP ; WL - Animals - Birds Circus hudsonius northern harrier None None SSC - Animals - Birds Elanus leucurus white-tailed kite None None FP - Animals - Birds Ardea alba great egret None None - -
Animals - Birds Ardea herodias great blue heron None None - - Animals - Birds Agelaius tricolor tricolored blackbird None Threatened SSC - Animals - Birds Icteria virens
yellow-breasted
chat None None SSC -
Animals - Birds Pandion haliaetus osprey None None WL - Animals - Birds Setophaga petechia yellow warbler None None SSC - Animals - Birds
Ammodramus
savannarum
grasshopper
sparrow None None SSC -
Animals - Birds Melanerpes lewis Lewis' woodpecker None None - - Animals - Birds
Strix occidentalis
caurina
Northern Spotted
Owl Threatened Threatened - -
Animals - Fish Cottus asper ssp.
Clear Lake prickly
sculpin None None SSC -
Animals - Fish
Hesperoleucus
venustus
navarroensis
northern coastal
roach None None SSC -
Animals - Fish
Hysterocarpus
traskii lagunae
Clear Lake tule
perch None None SSC -
Animals - Fish
Hysterocarpus
traskii pomo
Russian River tule
perch None None SSC -
Animals - Fish
Entosphenus
tridentatus Pacific lamprey None None SSC -
Animals - Fish
Oncorhynchus
kisutch pop. 4
coho salmon -
central California
coast ESU Endangered Endangered - -
Animals - Fish
Oncorhynchus
mykiss irideus pop.
16 steelhead -
northern California
DPS Threatened None - -
Animals - Fish
Oncorhynchus
tshawytscha pop.
17 chinook salmon -
California coastal
ESU Threatened None - -
Animals - Insects Bombus caliginosus
obscure bumble
bee None None - -
Animals - Insects
Bombus
occidentalis
western bumble
bee None None - -
Animals -
Mammals
Cervus canadensis
nannodes tule elk None None - -
Animals -
Mammals Arborimus pomo Sonoma tree vole None None SSC - Animals -
Mammals Erethizon dorsatum
North American
porcupine None None - -
Animals -
Mammals
Eumops perotis
californicus western mastiff bat None None SSC -
13 Animals -
Mammals Pekania pennanti Fisher None None SSC -
Animals -
Mammals Taxidea taxus American badger None None SSC -
Animals -
Mammals Antrozous pallidus pallid bat None None SSC -
Animals -
Mammals
Corynorhinus
townsendii
Townsend's bigeared bat None None SSC -
Animals -
Mammals Lasiurus blossevillii western red bat None None SSC - Animals -
Mammals Lasiurus cinereus hoary bat None None - -
Animals -
Mammals Myotis yumanensis Yuma myotis None None - -
Animals -
Mollusks Gonidea angulata
western ridged
mussel None None - -
Animals - Reptiles Emys marmorata western pond turtle None None SSC - Community -
Terrestrial
Northern Interior
Cypress Forest
Northern Interior
Cypress Forest None None - -
Community -
Terrestrial
Serpentine
Bunchgrass
Serpentine
Bunchgrass None None - -
Plants -
Bryophytes Entosthodon kochii Koch's cord moss None None - 1B.3 Plants -
Bryophytes Grimmia torenii Toren's grimmia None None - 1B.3 Plants - Lichens Usnea longissima
Methuselah's beard
lichen None None - 4.2
Plants - Lichens Ramalina thrausta angel's hair lichen None None - 2B.1 Plants - Vascular
Perideridia
gairdneri ssp.
gairdneri
California
Gairdner's yampah None None - 4.2
Plants - Vascular
Blennosperma
bakeri Sonoma sunshine Endangered Endangered - 1B.1
Plants - Vascular
Hemizonia
congesta ssp.
calyculata Mendocino tarplant None None - 4.3
Plants - Vascular
Hemizonia
congesta ssp. tracyi Tracy's tarplant None None - 4.3
Plants - Vascular Lasthenia burkei Burke's goldfields Endangered Endangered - 1B.1 Plants - Vascular
Layia
septentrionalis Colusa layia None None - 1B.2
Plants - Vascular Lessingia hololeuca
woolly-headed
lessingia None None - 3
Plants - Vascular Tracyina rostrata beaked tracyina None None - 1B.2 Plants - Vascular
Plagiobothrys
lithocaryus
Mayacamas
popcornflower None None - 1A
Plants - Vascular
Streptanthus
glandulosus ssp.
hoffmanii
Hoffman's bristly
jewelflower None None - 1B.3
Plants - Vascular Brasenia schreberi watershield None None - 2B.3 Plants - Vascular Viburnum ellipticum
oval-leaved
viburnum None None - 2B.3
Plants - Vascular Silene bolanderi Bolander's catchfly None None - 1B.2 Plants - Vascular Carex comosa bristly sedge None None - 2B.1 Plants - Vascular
Arctostaphylos
stanfordiana ssp.
raichei Raiche's manzanita None None - 1B.1
Plants - Vascular Astragalus breweri Brewer's milk-vetch None None - 4.2 Plants - Vascular
Trifolium
buckwestiorum Santa Cruz clover None None - 1B.1
Plants - Vascular Monardella viridis green monardella None None - 4.3 Plants - Vascular Fritillaria agrestis stinkbells None None - 4.2
14 Plants - Vascular Fritillaria purdyi Purdy's fritillary None None - 4.3 Plants - Vascular Fritillaria roderickii Roderick's fritillary None Endangered - 1B.1 Plants - Vascular Lilium rubescens redwood lily None None - 4.2 Plants - Vascular Limnanthes bakeri
Baker's
meadowfoam None Rare - 1B.1
Plants - Vascular
Hesperolinon
adenophyllum
glandular western
flax None None - 1B.2
Plants - Vascular
Malacothamnus
mendocinensis
Mendocino bushmallow None None - 1A
Plants - Vascular
Cypripedium
californicum
California lady'sslipper None None - 4.2
Plants - Vascular
Cypripedium
montanum
mountain lady'sslipper None None - 4.2
Plants - Vascular Piperia candida
white-flowered rein
orchid None None - 1B.2
Plants - Vascular Kopsiopsis hookeri small groundcone None None - 2B.3 Plants - Vascular Erythranthe nudata bare monkeyflower None None - 4.3 Plants - Vascular
Gratiola
heterosepala
Boggs Lake hedgehyssop None Endangered - 1B.2
Plants - Vascular
Pleuropogon
hooverianus
North Coast
semaphore grass None Threatened - 1B.1
Plants - Vascular
Leptosiphon
acicularis bristly leptosiphon None None - 4.2
Plants - Vascular
Leptosiphon
latisectus
broad-lobed
leptosiphon None None - 4.3
Plants - Vascular
Navarretia
leucocephala ssp.
bakeri Baker's navarretia None None - 1B.1
Plants - Vascular Ranunculus lobbii
Lobb's aquatic
buttercup None None - 4.2
Plants - Vascular
Ceanothus
confusus
Rincon Ridge
ceanothus None None - 1B.1
Plants - Vascular Horkelia bolanderi Bolander's horkelia None None - 1B.2 FP= Fully
Protected
SSC = Species of Special
Concern
WL =
Watch List
15 Exhibit 4: Expected Bird List
*The Expected Bird List is based on the eBird “Cow Mountain BLM Valley View Trail” Hot Spot list accessed on September 23, 2022. Special Thanks to Roger Foote, George Gibbs, and Chuck Vaughn for assistance in modifying the list to reflect the habitats of the Western Hills Watershed Protection Area
16 Watersheds:
All 763 acres of the Western Hills WHWPA falls within the hydrologic regional Russian River watershed area see Exhibit 6 Watersheds and Rivers. The Russian River watershed encompasses 1,485 square miles of land and 110 miles of river. It includes 238 streams and creeks and 63 fish species. According to the California Water Board, “the river flows southward from Redwood and Potter valleys to its confluence with Mark West Creek, where it turns west to cut through the coast range and empty into the Pacific Ocean in Jenner.” Current issues in the watershed include bacterial quality, toxic blue-green algae blooms, polluted runoff from urban and agricultural areas, high water temperatures, altered sediment levels, and concerns over the amount, location, and timing of water diversions. Conservation efforts in this region aim to greatly reduce the degradation of the river as it is an important water source and valued habitat for riparian ecosystems.
17 Exhibit 5:
18 Soil Description:
The Soil Survey for Mendocino County, Eastern Part and Southwestern Part of Trinity County, California identifies six soils within the WHWPA property. Of the six soils present, the WHWPA in primarily comprised of Hopland-Whohly loams (50-70% slopes) and MaymenEtsel-Snook complex (30-75% slopes) see Exhibit 6 Soil Survey. Notably, no serpentine soils have been found in the WHWPA.
19 Exhibit 6
20 Fire Severity:
Every year the California Department of Forestry and Fire Protection (CalFire) publishes Fire Severity Maps for all of California. This data is based on fuel loading, slope, fire weather, and other relevant factors, including areas where the department has identified winds as a major cause of wildfire spread. The western hills of Ukiah are known to be a severe fire hazard, as they have not burned in decades and hold large amounts of fuel, see Exhibit 7 Fire Severity. CalFire defines ‘Hazard’ as the physical conditions that create a likelihood of expected fire behavior over a 30 to 50-year period.
The County of Mendocino and the City of Ukiah have been actively engaging with CalFire, the Ukiah Valley Fire Authority, and other stakeholder groups to review, develop, and implement fire prevention and mitigation measures for the Ukiah Valley. The WHWPA underwent a prescribed burn on the western portion of the property in 2019. The areas treated with prescribed burn are highlighted in Exhibit 8 Fire Severity Map. On May 17, 2023 Mendocino County Resource Conservation District foresters Doug Kirk and Adam Coleman joined City staff for a site visit to better inform this report. Further fire management of the forests on this WHWPA will aid in protecting the Ukiah Valley from future catastrophic wildfires.
21 Exhibit 7:
22 Exhibit 8:
23 Current Developments:
Roads
The WHWPA has five and a half miles of dirt roads primarily located along ridge lines. These roads function as fire breaks inside the WHWPA. The roads have a traditional design utilizing in-slopes draining to ditches that then feed water to culverts. The Handbook for Forest and Ranch and Rural Roads (Revised First Edition, 2015) recommends a more modern approach incorporating rolling dips and graded to an out-slope reducing erosion by allowing water to sheet off the road.
In many places the in-sloped roads lack the required drainage ditches leading to culverts.
Consequently, water flowing down will tend to create erosive, water collecting ruts. Water bars placed prior to this last year’s storms performed admirably, but ultimately were inadequate to the task. Erosion occurred and many of the existing water bars filled with silt in this first year. Road work should be considered to upgrade these water bars or consider alternate forms of drainage such as ditch relief culverts, rolling dips, and crossroad drains. Alternatively, realignments of the steepest sections of road may provide long term cost and environmental benefit while rendering the site more accessible.
Leases
One lease exists on the WHWPA, Ukiah Wireless - WiFiber. This lease is located at the coordinates (39.136218, -123.232346) and seen on Exhibit 1 Base map. A fifteen square foot easement exists on the WHWPA to install equipment and infrastructure for providing high-speed internet to Ukiah Valley residents. All equipment installed must have prior approval by the property owner. Additionally, equipment must be installed at least twenty feet from the centerline road to maintain existing road access.
Cannabis Grows
Multiple reports of illegal cannabis grow sites were received. However, no illegal grows or detritus from prior grows has been found. Neighboring properties can be seen to have infrastructure consistent with cannabis grow sites. Site visits were confined primarily to the roadways. Most of the drainages on the WHWPA are likely too high and dry to be a good source of year-round water and therefore are not expected to be home to abandoned tanks or irrigation.
Further assessment of the drainages should be performed and monitored to assure no new incursions occur.
Potential Developments:
The City plans to place water tanks with associated infrastructure for fire protection, likely at (39.13161, -123.21612) see Exhibit 1 Base map.
24 Recommendations:
Fire Mitigation
Addressing the reality of fire risk is an immediate need. Staff have begun to consult with the Ukiah Unified Fire District, Calfire, and the Mendocino County Fire Safe Council to quickly develop and implement a fire mitigation plan. Currently, several funding opportunities are available to help property owners reduce wildfire risk. CalFire offers a Wildlife Protection Grants Program that releases funding every year. The USDA Natural Resources Conservation Service’s Environmental Quality Incentives Program (EQIP) is available through the Mendocino County Resource Conservation District. It is a reimbursement program for landowners wanting to conduct fire mitigation and fuel reduction projects. Additionally, the California Fire Safe Council Administers U.S Forest Service State Fire Assistance (SFA) grant programs and offers a variety of other federal, state, and private funding opportunities.
Road Building and Maintenance
A road maintenance plan will need to be developed. These efforts will also need to be coordinated with fire professionals. Site access is a major concern for fire fighters, nevertheless, a cost benefit of road system utility should be considered to include the possibility of decommissioning some of the roads.
Once initial maintenance cost estimates are established, the costs and potential long-term savings of realigning the roads can be explored. Realigning roads to more appropriate grades will decrease long term maintenance costs while improving site accessibility. The City’s Streets and Parks teams will need to collaborate to address immediate maintenance needs prior to the next rainy season.
Trespass and Illegal Activity Monitoring
Trespass and illegal activity are not currently a significant problem. However, an ongoing monitoring system should be established. Gates at each of the entry points should have City locks added to them and a neighbor contact list built and maintained to coordinate access issues and allow for emergency egress for neighbors.
Travel time from City Hall to the western end of the project and back is approximately two hours. Ideally, monitoring should happen once a week. To save City staff time in performing these rounds, a Volunteer Steward Program might be developed. Wildlife cams should be placed at strategic locations and checked routinely to monitor for trespass.
Invasive Plant Control
A thorough assessment of existing invasive plants is beyond the resources available for this baseline document. City staff were able to identify a few invasive plants. Botanists who visited
25 the site did not express undue concern about the invasives, however it was not the focus of their visits. French broom (Genista monspessulana) is the most concerning invasive. Although currently limited to the lowest elevations of the property, it is highly invasive and is highly flammable. At a minimum, efforts should be made to confine its spread if not eliminate it from the property. Containment will require an ongoing effort. Star Thistle (Centaurea diluta) is also found along most of the sunnier sections of roads and a plan for containment should be explored.
Recreation and Public Access
The general public of the Ukiah Valley have limited access to open spaces. The WHWPA has the potential for public access. The proximity of the WHWPA to a population center makes it a logical place for public access. Although there are a few species of special concern, overall, the site is not a “sensitive” habitat. Currently, the existing roads are prohibitively steep for all but the hardiest hikers. Docent led outings with 4-wheel drive vehicles could be made available in the short term. At the time of this writing, access points are limited to City staff at San Jacinta Avenue and Redwood Avenue.
Opening the area to the general public would involve identifying more suitable access points and building trail heads and trails. Hiking, mountain biking, and nature viewing are the most likely candidates for this kind of recreational access. Although horseback riding and off-roading are theoretically possible, both activities require significantly more resources including large parking lots that are completely separate from public streets. The cost of building and maintaining trails and bridges for motorized or equestrian use is significantly higher. Providing appropriate parking is likely too high a barrier to inclusion of equestrian and 4-wheeler use by itself.
Additionally, local Native American culture bearers have expressed interest in having access to City owned lands to pursue and pass on traditional cultural practices. A pilot program could be developed to allow this activity as part of the Volunteer Steward Program mentioned in the Trespass and Illegal Activity Monitoring section.
26 Exhibit 9
27
28 Exhibit 10:
29 Record of Photographs
Photograph
Number
Location
Number
Description Location
Coordinates
1 1 Looking East towards Ukiah. These coordinates
are where the Ukiah city limits begin.
39.089,
-123.33
2 2 Road conditions after rain. 39.081,
-123.133
3 3 Water bar conditions in the eastern portion of
the WHWPA.
39.081,
-123.1339
4 4 Erosion on roads, walking west from Location
Number 3.
39.136, -
123.228
5 5 View looking north at old fire break road. Very
steep path.
Views of scrub brush and pines.
39.1358, -
123.229
6 6 View of side road southwest of main route.
Approaching WHWPA boundary.
39.1354, -
123.231
7 7 View looking south to adjacent property. End of
side road.
39.134, -
123.231
8 8 Back on main route, view looking west toward
Lookout Point. Steep elevation, scrub brush on
south side of path, pine grove on north side.
39.136, -
123.232
9 9 Cell phone tower lease, Wi-Fiber. 39.136, -
123.2322
10 9 Southern view from cellphone tower. 39.136, -
123.2322
11 9 Southeastern view from cellphone tower. View of
adjacent Doolin Creek and Ukiah Valley.
39.136, -
123.2322
12 10 View looking west with Lookout Point at the
very top.
39.136, -
123.235
13 11 View of Hull Mountain to the northeast through
pines.
39.136, -
123.236
14 11 Severe water damage to road. 39.136, -
123.236
30 15 12 Halfway up the climb to Lookout Peak. Views
directly east show Snow Mountain.
39.1366, -
123.237
16 13 Approaching northern Property boundary.
Ahead the four road cross is seen. One road goes
northeast to adjacent property. One switches
back east, running parallel to the main ridgeline
road.
39.137, -
123.238
17 14 Four road cross. Left side of the image shows the main route heading uphill. Right side of the
image shows road heading north to adjacent
private property.
39.137, -
123.239
18 14 Road to private property to the north. 39.137, -
123.239
19 14 Road leading back east down elevation. We will
traverse this route on the way back down in
elevation to the city limit line.
39.137, -
123.239
20 15 Stand of leaning pines on northern edge of
property boundary.
39.137, -
123.2406
21 16 View east of thick pine grove. Left road is
another route to private property road to the
north. Note water erosion on roads.
39.137, -
123.241
22 17 Small skid road leading south. Views of adjacent
hills, Doolin Creek and southern Ukiah Valley.
39.136, -
123.244
23 18 View of prescribed burn site on western portion
of WHWPA and road leading along the ridge.
39.136, -
123.24476
24 18 Prescribed burn site. 39.136, -
123.24476
25 19 View looking south where a skid road is seen on
the ridge. This road is the eastern boundary of
the prescribed burn. Looking south where brush
becomes taller, this is the southern boundary of
the prescribed burn.
39.135, -
123.246
26 19 Prescribed burn site on right side of image.
Ukiah Valley and eastern hills in the
background.
39.135, -
123.246
31 27 20 Another view of the skid road along eastern
portion of burn.
39.1356, -
123.247
28 20 View looking west, prescribed burn on left side
of road. Ahead to the left is another road that
travels off to an adjacent private property.
39.1356, -
123.247
29 21 Facing east, heading back downhill on the side
road.
39.137, -
123.238
30 22 Example of the density of thick immature stands
of trees that exist throughout the WHWPA.
39.136, -
123.236
31 23 View facing northeast of Ukiah Valley, Hull and
Snow Mountain.
39.137, -
123.232
32 WHWPA Photographs
Photo 1. Location 1: Looking East towards Ukiah from the property boundary.
Photo 2. Location 2: Road conditions after rain.
33 Photo 3. Location 3: Water bar conditions in the eastern portion of the WHWPA.
Photo 4. Location 4: Erosion on roads, walking west from Location Number 3.
34 Photo 5. Location 5: View looking north at old fire break road. Very steep path.
Views of scrub brush and pines.
35 Photo 6. Location 6: View of side road southwest of main route. Approaching WHWPA boundary.
Photo 7. Location 7: View looking south to adjacent property. End of side road.
36 Photo 8. Location 8: Back on main route, view looking west toward Lookout Point. Steep elevation, scrub brush on south side of path, pine grove on north side.
Photo 9. Location 9: Cell phone tower lease, Wi-Fiber.
37 Photo 10. Location 9: Southern view from cellphone tower.
Photo 11. Location 9: Southeastern view from cellphone tower. View of adjacent Doolin Creek and Ukiah Valley.
38 Photo 12. Location 10: View looking west with Lookout Point at the very top.
Photo 13. Location 11: View of Hull Mountain to the northeast through pines.
39 Photo 14. Location 11: Severe water damage to road.
40 Photo 15. Location 12: Halfway up the climb to Lookout Peak. Views directly east show Snow Mountain.
41 Photo 16. Location 13: Approaching northern Property boundary. Ahead the four road cross is seen. One road goes northeast to adjacent property. One switches back east, running parallel to the main ridgeline road.
42 Photo 17. Location 14: Four road cross. Left side of the image shows the main route heading uphill.
Right side of the image shows road heading north to adjacent private property.
Photo 18. Location 14: Road to private property to the north.
43 Photo 19. Location 14: Road leading back east down elevation. We will traverse this route on the way back down in elevation to the city limit line.
44 Photo 20. Location 15: Stand of leaning pines on northern edge of WHWPA boundary.
Photo 21. Location 16: View east of thick pine grove. Left road is another route to private property road to the north. Note water erosion on roads.
45 Photo 22. Location 17: Small skid road leading south. Views of adjacent hills, Doolin Creek and southern Ukiah Valley.
Photo 23. Location 18: View of prescribed burn site on western portion of WHWPA and road leading along the ridge.
46 Photo 24. Location 18: Prescribed burn site
47 Photo 25. Location 19: View looking south where a skid road is seen on the ridge. This road is the eastern boundary of the prescribed burn. Looking south where brush becomes taller, this is the southern boundary of the prescribed burn.
48 Photo 26. Location 19: Prescribed burn site on right side of image. Ukiah Valley and eastern hills in the background.
Photo 27. Location 20: Another view of the skid road along eastern portion of burn.
49 Photo 28. Location 20: View looking west, prescribed burn on left side of road. Ahead to the left is another road that travels off to an adjacent private property.
50 Photo 29. Location: 21: Facing east, heading back downhill on the side road.
51 Photo 30. Location 22: Example of the density of thick immature stands of trees that exist throughout the WHWPA.
52 Photo 31. Location 23. View facing northeast of Ukiah Valley, Hull and Snow Mountain.
53 References:
Areas of Conservation Emphasis (ACE). (n.d.). Wildlife.ca.gov. Retrieved March 1, 2023, from https://wildlife.ca.gov/Data/Analysis/Ace
Calflora: Information on California plants for education, research and conservation, with data contributed by public and private institutions and individuals. [web application]. 2023. Berkeley, California: The Calflora Database [a non-profit organization]. Available:
https://www.calflora.org/ (Accessed multiple times 2023).
California Natural Diversity Database. (n.d.). Wildlife.ca.gov. https://wildlife.ca.gov/Data/CNDDB
California Water Board (2023). Ca.gov.
https://gispublic.waterboards.ca.gov/portalserver/rest/services/Hydrology/CalWater_Boundaries/ MapServer
Fire Severity. California Department of Forestry and Fire Protection (n.d.). Frap.fire.ca.gov. https://frap.fire.ca.gov/mapping/gis-data/
Fire Hazard Severity Zones Map. (n.d.). Osfm.fire.ca.gov. https://osfm.fire.ca.gov/divisions/community-wildfire-preparedness-and-mitigation/wildfirepreparedness/fire-hazard-severity-zones/fire-hazard-severity-zones-map/
FINAL INITIAL STUDY AND MITIGATED NEGATIVE DECLARATION FOR UKIAH WESTERN
HILLS OPEN LAND ACQUISITION AND LIMITED DEVELOPMENT AGREEMENT PROJECT (2021)
Leppig, Gordon (2019). Senior Environmental Scientist Supervisor, Coastal Conservancy Planning, CA Department of Fish and Wildlife – Summary of Site Visit – Correspondence with City of Ukiah Staff.
A Manual of California Vegetation, 2nd Edition. (2009)
Sawyer, John. Keeler-Wolf, Todd. and Evens, Julie
NRCS. (2019). Web Soil Survey - Home. Usda.gov. https://websoilsurvey.nrcs.usda.gov/app/ OpenGov. (n.d.). FY 2021-22 Strategic Plan. FY 2021-22 Strategic Plan. Retrieved March 1, 2023, from https://stories.opengov.com/ukiahca/published/WskQttSmD Penrod, K,. R. Hunter, and M. Merrifield. 2001 Missing Linkages; Restoring Connectivity to the California Landscape, Conference Proceedings. Co-sponsored by California Wilderness Coalition, The Nature Conservancy, U.S. Geological Survey, Center for Reproduction of Endangered Species, and California State Parks.
Randerson. (2022, March 17). West Hills Fire Prevention. City of Ukiah, CA.
Region 5 - Resource Management CalVeg Zone 1. (2017). Usda.gov.
54 https://www.fs.usda.gov/detail/r5/landmanagement/resourcemanagement/?cid=stelprdb5347192 Russian River Watershed Association. (n.d.). Www.rrwatershed.org. Retrieved March 1, 2023, from https://www.rrwatershed.org/
Russian River | California Northcoast Regional Water Quality Control Board. (n.d.).
Www.waterboards.ca.gov.
https://www.waterboards.ca.gov/northcoast/water_issues/programs/watershed_info/russian_river /
Spencer, W.D., P. Beier, K. Penrod, K. Winters, C. Paulman, H. Rustigian-Romsos, J. Strittholt, M. Parisi, and A. Pettler. 2010. California Essential Habitat Connectivity Project: A Strategy for Conserving a Connected California. Prepared for California Department of Transportation, California Department of Fish and Game, and Federal Highways Administration.
Watershed Boundary Dataset (WBD) - California Natural Resources Agency Open Data. (2019).
Ca.gov. https://data.cnra.ca.gov/dataset/watershed-boundary-dataset-wbd Weaver, W. E. Weppner, PG Hagans D (Revised First Edition, 2015) Handbook for Forest and Ranch and Rural Roads.
Acknowledgements:
On behalf of the City of Ukiah I would like to thank the many people who volunteered their time and contributed to this baseline assessment.
Neil Davis
Community Service Director
City of Ukiah
Bob Neale – Sonoma Land Trust
Anna Bride – Mendocino Land Trust
Nichole Houtz – Mendocino Land Trust
Doug Kirk – Mendocino County Resource Conservation District Adam Coleman - Mendocino County Resource Conservation District Andrea Davis – Sanhedrin Chapter CNPS
Jim Xerogeanes – Sanhedrin Chapter CNPS
Chief Doug Hutchison – Ukiah Valley Fire Authority
Scott Cratty – Mendocino Fire Safe Council
Tim Eriksen – City of Ukiah Public Works
Chuck Vaughn – Peregrine Chapter, Audubon Society
1 Kristine Lawler
Subject: 14a Correspondence Received - John and Delynne Rogers ‐‐‐‐‐Original Message‐‐‐‐‐
From: John Rogers <[email protected]>
Sent: Saturday, July 29, 2023 2:12 PM
To: KrisƟne Lawler <[email protected]>
Cc: Mari Rodin <[email protected]>; Mari Rodin <[email protected]>; Neil Davis <[email protected]> Subject: Aug 2 City Council MeeƟng Item 14A
Dear Ms. Lawler,
We received a noƟficaƟon via email regarding the Aug 2 city council meeƟng. We would like to comment on agenda item 14A ‐ Receive and Accept as Complete a Baseline Assessment of the Western Hills Watershed ProtecƟon Area (WHWPA).
We live at the end of San Jacinta Drive adjacent to the area of the western hills baseline assessment. Unfortunately we will be out of town for the meeƟng, so we are forwarding our comments to you.
We appreciate the work of Neil Davis and the Mendocino Land Trust on their assessment. We have a concern about the issue of accessibility in the report. The report states “PotenƟal future public access to the WHWPA could be via Hillview Avenue, San Jacinta Drive, Helen Avenue, and/or Doolin Canyon Drive.” We want the city council to understand that San Jacinta Drive does not connect to the WHWPA. In order to gain access to the area via San Jacinta Drive, one must use the private driveway at the end of San Jacinta Drive. This private driveway is on our property and we have not granted public access.
While we understand that public access is not an issue for this hearing, we want to make sure that this is clearly understood. We appreciate city staff reaching out to us earlier about this issue. We have met on two occasions and hope to conƟnue our dialogue in the future.
Thank you for your consideraƟon.
John and Delynne Rogers
345 San Jacinta Dr.
1 Kristine Lawler
Subject: 14a Correspondence Received - Jeanne Wetzel Chinn ‐‐‐‐‐Original Message‐‐‐‐‐
From: Jeanne Chinn <[email protected]>
Sent: Monday, July 31, 2023 12:39 PM
To: KrisƟne Lawler <[email protected]>
Cc: Mari Rodin <[email protected]>; Neil Davis <[email protected]> Subject: Ukiah City Council MeeƟng 8/2 ‐ Comment LeƩer on Item 14A Dear Ms. Lawler,
Please accept my comments regarding Item 14A on the agenda for the City Council MeeƟng to be held August 2, 2023.
Item 14A ‐ Receive and Accept as Complete a Baseline Assessment of the Western Hills Watershed ProtecƟon Area (WHWPA). I live at the western end of San Jacinta Drive adjacent to the Western Hills Baseline Assessment Area. There is an inaccuracy in the Report related to the issue of accessibility.
First, I want to thank Neil Davis and the Mendocino Land Trust for their work in creaƟng the Baseline Assessment of the WHWPA. Please note that San Jacinta Drive does not connect to the WHWPA, nor provide access to the WHWPA.
The report states “PotenƟal future public access to the WHWPA could be via Hillview Avenue, San Jacinta Drive, Helen Avenue, and/or Doolin Canyon Drive.” Beginning on the property owned by John and Delynne Rogers at 345 San Jacinta Drive, San Jacinta Drive becomes a private driveway. I have access via the Rogers' easement to reach my home at 395 San Jacinta Drive. This is a private driveway and does not include public access. I have also not granted public access on the easement being developed through my property.
Although the purpose of this hearing is not to discuss public access, it is best to know the facts upfront. I request that this Northwestern secƟon of San Jacinta Drive be deleted from the Report as potenƟal future public access to the WHWPA. Along with the Rogers, we met with City staff on two occasions this past spring to discuss access to the WHWPA and potenƟal trails. I appreciate city staff reaching out to the Rogers and myself, and hope we can conƟnue our conversaƟons for protecƟon and preservaƟon of our beloved western hills into the future.
Thank you.
Jeanne Wetzel Chinn
395 San Jacinta Drive
Agenda Item No: 14.b.
MEETING DATE/TIME: 8/2/2023
ITEM NO: 2023-2859
AGENDA SUMMARY REPORT
SUBJECT: Discussion and Possible Direction Regarding Investment Preferences of Idle Funds Related to Petroleum Companies.
DEPARTMENT: Finance PREPARED BY: Dan Buffalo, Finance Director PRESENTER: Dan Buffalo, Finance Director
ATTACHMENTS:
1. Investment Policy_June 2023
2. California Quietly Shelves $15 Billion Pension Divestment Bill - Bloomberg
3. California pensions_ Will CalPERS stop investing in fossil fuels_ - CalMatters
4. 14b Correspondence Received - Eileen Mitro
5. 14b Correspondence Received - Steve Scalmanini
Summary: The Council will discuss individual fixed income securities investment preferences related to the holding of debt instruments issued by petroleum companies within the City's idle funds investment portfolio.
Background: During its review and consideration of changes to the City's investment portfolio and investment policy at the regular meeting on June 21, 2023, the Council desired further opportunity to discuss specific fixed income securities in the City's investment portfolio related to petroleum companies.
Discussion: The City's investment policy is attached here as Attachment 1 for reference. Also included here for reference as Attachments 2 and 3 are associated articles on the State Legislature's recent activities surrounding this topic.
Recommended Action: Council to discuss the City's investment policy related to petroleum companies and provide direction to Staff.
BUDGET AMENDMENT REQUIRED: N/A
CURRENT BUDGET AMOUNT: N/A
PROPOSED BUDGET AMOUNT: N/A
FINANCING SOURCE: N/A
PREVIOUS CONTRACT/PURCHASE ORDER NO.: N/A
COORDINATED WITH: N/A
DIVERSITY-EQUITY INITIATIVES (DEI):N/A
CLIMATE INITIATIVES (CI): N/A
GENERAL PLAN ELEMENTS (GP): N/A
1 CITY OF UKIAH
STATEMENT OF INVESTMENT POLICY
June 1, 2022
I. PURPOSE
The purpose of this document is to establish and organize investment policies, which will govern the investment activities of the City of Ukiah.
II. SCOPE
This investment policy covers all the City’s surplus funds and investments (except retirement funds and bond proceeds) and investment activities under the direction of the City. Investment of bond proceeds will be governed by the provisions of relevant bond documents.
The investment policies of the City of Ukiah are based on state law and prudent money management practices. All funds will be invested in accordance with this Investment Policy and applicable California Government Codes, including § 53601 et seq.
III. OBJECTIVES
The primary objectives of the City, in order of priority, shall be:
1) Safety: Safety of principal is the foremost objective of the investment program.
Investments of the City shall be undertaken in a manner that seeks to ensure preservation of capital in the portfolio.
2) Liquidity: The investment portfolio of the City will remain sufficiently liquid to enable the City to meet its cash flow requirements.
3) Yield: The investment strategy of the City shall be to earn a reasonable investment return, considering current market conditions, and within the parameters set forth by priorities (1) and (2) above.
An adequate percentage of the portfolio shall be maintained in liquid, short-term securities that can be converted into cash if necessary to meet forecasted disbursement requirements. The portfolio shall also be appropriately diversified to avoid unreasonable and avoidable risks regarding specific security types or individual financial institutions.
IV. POLICIES
1. Public Funds: It is the policy of the City of Ukiah to invest public funds in a manner which will provide the maximum safety and liquidity, while earning an investment return consistent with the objectives and parameters set forth by this policy.
2. Prudent Investor Standard: Ukiah operates its investments program under the Prudent Investor Standard, which states that the governing body of the local agency or Attachment 1
2 the persons authorized to make investment decisions on behalf of the local agency are trustees, and, therefore, subject to the Prudent Investor Standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.
3. Management Responsibilities: Management responsibility for the investment program is delegated, for a one-year period, subject to annual review and delegation, to the City Treasurer. The City Treasurer may further delegate day-to-day management of the investment program to a professional external investment advisor.
4. Internal Controls: A system of internal controls shall be established and documented in writing by the Finance Director. The controls shall be designed to prevent losses of public funds arising from fraud, employee error, misrepresentation of third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the City of Ukiah. Controls deemed most important include: minimization of opportunities for collusion, separation of duties, separation of transaction authority from accounting and recordkeeping, avoidance of bearer-form securities, specific limitations regarding securities losses and remedial actions, written confirmation of all transactions, minimizing the number of authorized investment officials, documentation of transactions and strategies, and proper review and approval of brokerage accounts and investment transactions.
5. Safekeeping, Custody, and Delivery: The City’s investments shall be held in safekeeping, in the name of the City of Ukiah, by a third party custodian bank.
Investment transactions shall be executed and settled using the “delivery vs. payment” method.
6. Reporting: The Finance Director shall review and have available monthly reports in the Finance Department, and available for public review, which shall include type of investment, issuer, purchase and maturity dates, rating, purchase price, par, current market value as of the date of the report and the source of this valuation, and yield to maturity. These reports shall include a list of all transactions during the past month.
The Investment Advisor will also deliver periodic market updates and portfolio reviews to the Finance Director. The Finance Director will deliver investment reports to the Investment Oversight Committee and City Council.
The Oversight Committee will meet at least once annually in order to conduct a comprehensive review of the investment activities of the City so as to ensure that regulations are being adhered to and that strategies are being followed.
7. Conflict of Interest: In accordance with California Government Code sections 1090, et Attachment 1
3 seq. and 87100, et seq., officers and employees of the City will refrain from any activity that could conflict with the proper execution of the investment program or which could impair their ability to make impartial investment decisions. All investment personnel shall comply with the reporting requirements of the Political Reform Act, to include the annual filing of Statements of Economic Interest.
8. Return on Investment: The City's investment portfolio shall be designed to attain a market-average rate of return through economic cycles. The Investment Oversight Committee will measure the portfolio against an appropriate benchmark.
9. Annual Review of Policy: The Investment Advisor shall review the Investment Policy annually and provide the City Manager and Finance Director with recommendations if any are needed. The Finance Director will present the Policy, and any recommended changes, to the Investment Oversight Committee and City Council. City Council will review the Policy and recommended changes at a public meeting.
V. AUTHORIZED INVESTMENTS
Generally, investments shall be made in the context of the Prudent Investor Standard. The City is further governed by applicable California Government Codes, including sections 53600 and 53601 et seq. Within the context of these regulations, the following investments are authorized, and further limited herein:
(a) Ukiah Bonds: Bonds issued by the City of Ukiah, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the City or by a department, board, agency, or authority of the City. (b) U.S. Treasury Obligations: United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for payment of principal and interest.
(c) California State Obligations: Registered state warrants or treasury notes or bonds of this state, including bonds payable solely out of the revenues from a revenueproducing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state.
(d) Non-California State Obligations: Registered treasury notes or bonds of any of the other 49 United States in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 United States in addition to California.
(e) Local Agency Obligations: Bonds, notes, warrants, or other certificates of indebtedness of any local agency within this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state.
Attachment 1
4 (f) Federal Agency or Government Sponsored Enterprise Obligations: Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by Federal Agencies or United States Government Sponsored Enterprises. (g) Bankers’ Acceptances: Bills of exchange or time drafts that are drawn on and accepted by a commercial bank. Purchases of bankers’ acceptances may not exceed 180 days maturity or 40% of the portfolio, and no more than 5% of the portfolio may be invested in the banker’s acceptance of any one commercial bank.
(h) Commercial Paper: Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a nationally recognized statistical-rating organization. The entity that issues the commercial paper shall meet all of the following conditions in either paragraph (1) or paragraph (2):
(1) The entity meets the following criteria: (a) is organized and operating in the United States as a general corporation; (b) has total assets in excess of five hundred million dollars ($500,000,000); and (c) has debt other than commercial paper, if any, that is rated in a rating category of “A” or its equivalent or higher by an NRSRO. (2) The entity meets the following criteria: (a) is organized within the United States as a special purpose corporation, trust, or limited liability company; (b) has programwide credit enhancements, including, but not limited to, over collateralization, letters of credit or surety bond; and (c) has commercial paper that is rated “A-1” or higher, or the equivalent, by an NRSRO.
Eligible commercial paper shall have a maximum maturity of 270 days. Purchases of commercial paper may not exceed 25% of the City’s portfolio. No more than 5% of the portfolio may be invested in commercial paper of any one institution.
(i) Negotiable Certificates of Deposit: Negotiable certificates of deposit or deposit notes issued by a nationally or state-chartered bank, a state or federal savings and loan association, or a federally-licensed or state-licensed branch of a foreign bank provided that the senior debt obligations of the issuing institution are rated in a rating category of "A"(long-term) or its equivalent or better or A-1 (short-term) or its equivalent or better by an NRSRO. Purchases of negotiable certificates of deposit may not exceed 30% of the portfolio, and no more than 5% of the City’s portfolio may be invested in any one financial institution.
(j) Repurchase Agreements: The City may invest in repurchase agreements with banks and dealers with which the City has entered into a master repurchase agreement. The maturity of repurchase agreements shall not exceed 365 days. The market value of securities used as collateral for repurchase agreements shall be valued at 102% or greater of the funds borrowed against those securities at all times and shall be monitored daily by the investment staff. In order to conform with provisions of the Federal Bankruptcy Code, which provide for the liquidation of securities held as Attachment 1
5 collateral for repurchase agreements, the only securities acceptable as collateral shall be direct obligations of the United States or any agency of the United States as described in §V of this policy.
In addition, the City may enter into repurchase agreements only with “primary dealers” as designated by the Federal Reserve Bank of New York. All securities underlying Repurchase Agreements must be delivered to the City’s custodian bank (delivery vs. payment) or be handled under a properly executed “tri-party” repurchase agreement.
The market value must be recalculated each time there is a substitution of collateral.
The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to Repurchase Agreement. (k) Reverse Repurchase Agreements: The City may invest in reverse repurchase agreements only with “primary dealers” with which the City has entered into a master repurchase agreement contract. The City may invest in reverse repurchase agreements with the following conditions:
Reverse repurchase agreements may be used only after prior approval of the City Council. The City may only use reverse repurchase agreements to (1) cover a temporary cash shortage, or (2) augment earnings. Reverse repos may not be used to leverage the portfolio. In addition:
If a reverse repurchase agreement is authorized, it may be utilized only if the security to be sold on a reverse repurchase agreement has been owned and fully paid for by the City for a minimum of 30 days prior to the sale; the total of all reverse repurchase agreements on investments owned by the City does not exceed 20% of the portfolio; and the agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of the security using a reverse repurchase agreement and the final maturity date of the same security. The proceeds of the reverse repurchase agreement may not be invested in securities whose maturity exceeds the term of the reverse repurchase agreement.
(l) Medium-term Notes: The City may invest in all corporate and depository institution debt securities with a maximum remaining maturity of five year or less, issued by corporations organized and operating within the United States, or by depository institutions licensed in the United States or any state and operating within the United States. Notes eligible for investment shall be rated in a rating category of “A” or its equivalent or better by an NRSRO. Purchase of corporate notes may not exceed 30% of the portfolio, and no more than 5% of the corporate notes in the portfolio may be invested in the same corporation.
(m) Money Market Funds: Shares of beneficial interest issued by diversified management companies that invest in the securities and obligations as authorized by California Government Code section 53601 subdivisions (a) to (k), inclusive, and subdivisions (m) to (q), inclusive and that are money market funds registered with the Securities and Attachment 1
6 Exchange Commission under the Investment Company Act of 1940. To be eligible for investment these companies shall either: (i) attain the highest ranking or highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations, or (ii) have an investment advisor registered or exempt from registration with the Securities and Exchange Commission with not less than five years experience managing money market mutual funds with assets under management in excess of five hundred million dollars ($500,000,000). The purchase price of shares of beneficial interest purchased shall not include any commission that these companies may charge and shall not exceed 20% of the City’s portfolio. (n) Local Agency Investment Fund: The City may invest in the Local Agency Investment Fund (LAIF) established by the State Treasurer for the benefit of local agencies under §16429.1 of the Government Code. The maximum balance that can be held in the fund is the maximum amount permitted by LAIF’s Local Investment Advisory Board. (o) Time Deposits: The City may invest in non-negotiable time deposits that are FDIC insured or fully collateralized in financial institutions located in California, including U.S. branches of foreign banks licensed to do business in California. To be eligible to receive local agency deposits, a financial institution must receive a minimum overall “satisfactory rating” for meeting the credit needs of California Communities in its most recent evaluation. All time deposits must be collateralized in accordance with the California Government Code § 53650, et seq. Since time deposits are not liquid, no more than 25% of the cost value of the portfolio may be invested in this category. (p) Mortgage-Backed and Asset-Backed Securities: Any mortgage pass-through security, collateralized mortgage obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate, consumer receivable pass-through certificate, or consumer receivable-backed bond. Securities eligible for investment under this subdivision shall be rated in a rating category of “AA” or equivalent or higher by an NRSRO and have a maximum remaining maturity of five years or less. Purchase of securities authorized by this subdivision may not exceed 20% of the agency's surplus money that may be invested pursuant to this section. (q) Local Government Investment Pools (LGIPs). Shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 that invests in the securities and obligations authorized in California Government Code section 53601 subdivisions (a) to (r), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria: (1) The adviser is registered or exempt from registration with the Securities and exchange Commission. (2) The adviser has not less than five years of experience investing in the securities and obligations authorized in subdivisions (a) to (q), inclusive. (3) The adviser has assets under management in excess of five hundred million dollars ($500,000,000). (r) Supranational Debt. United States dollar denominated senior unsecured Attachment 1
7 unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or InterAmerican Development Bank, with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments under this subdivision shall be rated in a rating category of "AA" or its equivalent or better by an NRSRO and shall not exceed 30% of the portfolio.
Credit criteria listed in this section refers to the credit quality of the issuing organization at the time the security is purchased. The maturity limits are applied at the time of purchase. A security purchased in accordance with this Policy shall not have a forward settlement date exceeding 45 days from the time of investment.
VI. INELIGIBLE INVESTMENTS
The City may only invest in those obligations authorized by this policy. The City shall not invest any funds in inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages, or in any security that could result in zero interest accrual if held to maturity.
However, the City may hold prohibited investments until their maturity dates.
Notwithstanding the prohibition in the above paragraph, the City may invest in securities issued by, or backed by, the United States government that could result in zero- or negative-interest accrual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates. The City may hold these instruments until their maturity dates. This paragraph shall remain in effect only until January 1, 2026, and as of that date is repealed.
VII. PORTFOLIO LIMITS AND DIVERSIFICATION
1. Maximum Investment Maturity: Unless otherwise noted within this investment policy, the City may not invest in a security with a maturity that exceeds five years from the date of purchase. For purposes of compliance with this Policy, an investment’s term or remaining maturity shall be measured from the settlement date to final maturity.
Investments which exceed five years in maturity require authority granted by City Council before purchase. Written authority of the City Council must be granted specifically or as part of an investment program no less than three months prior to the date of purchase.
2. Maximum Weighted Average Maturity: The maximum weighted average maturity of the City’s investment portfolio shall not exceed 3 years to control overall exposure to interest rate risk.
3. Diversification: With the exception of obligations of the United States Government and its Agencies and authorized investment pools, no more than 10% of the portfolio may be invested in the securities of any single issuer, regardless of sector. For certain investment types, a 5% issuer limit is imposed and is stated in the investment description in the Authorized Investment section.
Attachment 1
8 Adopted on the 21st day of June, 2023 by the Ukiah City Council.
Signed: Attest:
___________________________ _____________________________ Mari Rodin, Mayor Kristine Lawler, City Clerk
Attachment 1
Politics
California Quietly Shelves $15 Billion
Pension Divestment Bill
The California State Capitol in Sacramento. Photographer: David Paul Morris/Bloomberg By Eliyahu Kamisher
July 3, 2023 at 2:18 PM PDT
The California State Assembly has shelved legislation that would have forced the country’s two largest pension funds to divest an estimated $15 billion from oil and gas companies, a major blow to environmental advocates who hoped the funds could be a national model for the divestment movement.
SB-252, which passed the state Senate in May, won’t be given a floor vote, according to the bill’s lead author, Senator Lena Gonzalez of Los Angeles County. The legislation has been converted to a two-year bill, meaning lawmakers will have the opportunity to address the measure in the next session.
“I’m committed to bringing this bill up again next year,” Gonzalez said.
Under the proposal, the California Public Employees’ Retirement System and the California State Teachers Retirement System would have been required to remove assets of large oil and gas companies by 2031 and halt any new investments by 2024.
Marcie Frost, CEO of Calpers, previously signaled her opposition, saying the bill would “do nothing to combat the dangers of climate change.”
“We respect assembly member McKinnor’s decision to take more time to understand the impact of the bill to our pension funds and members and employers,” Calpers spokesperson Brad Pacheco said, referring to Tina McKinnor, head of the Assembly Committee on Public Employment and Retirement, where the legislation was held.
The decision marks the second year in a row a pension fund divestment bill has passed the state Senate only to die in the lower house amid opposition from the funds, which manage a combined $822.3 billion in assets.
The proposal highlighted divisions among California’s Democratic supermajority. Lawmakers were forced to choose between climate change priorities and concerns that divestment could threaten the financial health of municipalities already burdened with pension fund Attachment 2
liabilities.
California’s powerful labor interests were also divided on the bill. Unions representing firefighters and construction trades were against the measure, while a major teachers’ union and the California Nurses Association backed it. “We’re committed to achieving a net zero investment portfolio that achieves the goals of the bill through engagement with companies, investments in alternative energies and addressing climate risks,” Pacheco said.
Attachment 2
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Attachment 2
Oil pumps in the Kern River Oil Field near Bakersfield on July 6, 2022. Photo by Larry Valenzuela, CalMatters/CatchLight Local
ECONOMY
Will California’s largest pensions, CalPERS and CalSTRS, divest from fossil fuels? BY GRACE GEDYE , JUNE 29, 2023 UPDATED JULY 5, 2023
IN SUMMARY
Climate activists and some lawmakers want two of California’s pension funds to shed about $15 billion of fossil fuel holdings. They say the move would reduce oil and gas companies’ political power, but opponents say it would be a bad move financially.
July 5: The chair of the Assembly Committee on Public Employment and Retirement committee, Tina McKinnor, decided to not hear SB 252 in the committee, meaning it will not pass this year, according to the bill author’s of ice. The bill will get another chance next year.
Listen to this article
Climate activists and retirees have pushed retirement funds in Maine and New York to sell their stocks in fossil fuel companies. The push is called “divestment”, and it’s a move that the University of California has embraced as well.
Now, divestment may be coming to more pensions near you.
The California Legislature is considering a bill that would require the pension funds for state workers and teachers to sell holdings in the 200 largest publicly traded fossil fuel companies by July 2031. The bill would also stop the funds from making new investments in those companies starting in 2024.
These pension funds aren’t simple bank accounts, they’re big-time institutional investors. The California Public Employees’ Retirement System has about $459 billion in assets, making it the largest public pension fund in the nation and one of the largest private equity investors in the world according to the agency’s website. When it changes tack, the world of finance takes note.
The California State Teachers’ Retirement System is the second largest public pension fund in the U.S. Together, the two pension funds cover more than 3 million Californians and their families.
Proponents of the bill say it’s important that California put its money where its mouth is, so to speak, on climate policy. Foes of the move say anything that might hurt investment returns should be off the table.
Marcie Frost, CEO of CalPERS, at the regional office in Sacramento on June 26, 2023. Photo by Rahul Lal for CalMatters “We’re not saying the intentions around this are not good,” said Marcie Frost, CEO of CalPERS, in an interview with CalMatters. “But they’re not coming through an investor lens. It feels like they’re coming through a morality lens. And we can’t use our own personal values, or our personal morals, to be able to decide how we invest the assets of this portfolio.”
Both pensions are underfunded; if either had to immediately pay out all the benefits they owe, they wouldn’t have enough money.
If CalPERS and CalSTRS shed their investments in the largest oil and gas companies, what would it mean for the teachers and state workers counting on their retirement checks?
Why climate activists are pushing for divestment
For some, it would be a relief.
“When I was younger, I was told by the adults around me that I should work toward obtaining a career with the state of California,” said Francis Macias, a state parks employee who called into a pension fund board meeting in March. A member of the advocacy group Fossil Free California, she said those same adults had told her such a job would come with perks like stable hours — and a nice pension.
But now, Macias said, “I feel like I’m living in a nightmare. Every day, I experience great anxiety knowing my hard-earned pension is funding climate collapse.” The state worker pension fund has an estimated $9.4 billion in energy company investments it would have to divest under the proposed bill, about 2% of the fund. On the list are companies you’ve probably heard of, including Exxon Mobil and Shell, and ones you probably haven’t, such as Ovintiv Inc. and Cenovus Energy. The teachers’ pension fund would have to divest an estimated $5.4 billion, or about 1.7% of its assets.
The bill’s backers include many environmental and climate groups, as well as some unions representing workers who receive pensions, such as the California Faculty Association and the California Nurses Association. But there are other unions, like the California Professional Firefighters and the State Building and Construction Trades Council, that oppose the effort, along with California State Retirees, an organization for retired state workers, and the leadership of the pension funds themselves.
The goal of divestment pushes, climate advocates say, isn’t to directly reduce emissions. “It’s about calling (fossil fuel companies) out on their immoral activities, and the political consequences of that, which is weakening them politically, so that politicians stop taking their money and politicians stop doing their bidding,” said Carlos Davidson, a retired faculty member of San Francisco State University who receives a pension. He worked on a divestment campaign at the university, and has been involved in the push to divest the state workers’ pension for nearly a decade. “It is true that divestment does not have direct financial impacts on companies,” Davidson said. “It’s the political effects that really matter. And that is a harder, longerterm, more fuzzy process.” Davidson lives in Pacifica, off of a combination of his pension and social security benefits. “I could not have retired and I could not pay my bills right now if I didn’t have my [state] pension,” he said.
What are the costs of divestment?
There’s also a camp that thinks divestment would be a bad move financially. That camp includes the leadership of both pension funds.
At the state worker pension fund, the investment and actuarial teams estimated that if the fund sold off its fossil fuel holdings it would get lower returns on its investments, translating to an extra $327.6 million in costs per year for 20 years for employers, like schools, and state and local governments, to meet obligations to retirees.
The state worker pension fund has divested before — from Iran, Sudan, thermal coal, and more. In 2001, the fund divested its tobacco company holdings, worth about $525 million according to news reports at the time. In the more than 20 years since, that move has translated to about $4.3 billion in lost investment profits, according to a 2022 report from Wilshire Advisors. But some divestments, like those from thermal coal, and Iran, have translated to small gains.
When economists from the University of Groningen in the Netherlands and the University of St. Andrews in Scotland compared the financial performance of investment portfolios with and without fossil fuel company stocks from 1927-2016, they found that divested portfolios “would not have significantly underperformed” during that period.
“It’s not just the oil and gas industry,” said pension fund CEO Frost. “What’s next? Divestment from the airline industry, who uses a lot of oil and gas?” she said. “Pretty soon you get to the point that (the pension) has nothing to invest in” and there’s no way to hit the high investment returns the pension fund is tasked with hitting, she said.
This isn’t the first legislative push for fossil fuel divestment. Last year a similar bill was passed by the Senate, and then died in the Assembly’s committee on public employment and retirement. It might have a better shot this time, thanks to some political musical chairs. Previously, the Assembly’s public employment committee was led by Jim Cooper, an Elk Grove Democrat who was opposed to the Legislature directing state pension funds on how to invest, Frost said. Now he’s left the Assembly, and the committee has a new chairperson, Tina McKinnor, a Democrat from Inglewood.
A complicating factor is that the pension funds have a “fiduciary duty” under California’s constitution. That means that the people overseeing the funds are legally required to invest prudently, and act exclusively to benefit the fund’s members. “It’s the political effects that really matter. And that is a harder, longer-term, more fuzzy process.” — CARLOS DAVIDSON, RETIRED FACULTY MEMBER OF SAN FRANCISCO STATE UNIVERSITY WHO RECEIVES A PENSION
© 2023 CALMATTERS.
PROUDLY POWERED BY NEWSPACK BY AUTOMATTIC
Some of the bill’s opponents say that requiring the funds to divest from fossil fuels would conflict with their fiduciary duty to their members, including the California Professional Firefighters, a union.
“Forcing any California pension system to make investment decisions that may harm the fund in an attempt, in this case, to affect global climate policy, violates their fiduciary mandate and puts the retirements of hard-working Californians at risk,” wrote president Brian Rice in a statement.
Already, the concept of fiduciary responsibility is causing legal headaches for divestment efforts. Three New York City pension funds are being sued for allegedly violating their fiduciary duties after they divested $4 billion in fossil fuel holdings.
Ultimately, it’s up to the pension funds themselves to determine whether divesting would conflict with their mandate.
The state worker pension fund hasn’t done a full analysis yet, but, said Frost, “my impression on this is that it would violate the board’s fiduciary duty to do this.” The bill has an escape clause of sorts, making it clear that the pension funds don’t have to sell off their investments if doing so would conflict with their fiduciary duties.
That means there’s a scenario in which the Legislature passes the bill and then the funds say that divesting goes against their responsibilities to the beneficiaries, and nothing changes in practice.
Davidson, the retiree pushing for divestment, says that’s not the outcome he’s expecting.
But it wouldn’t be all bad, he said. What really matters is the politics, and “the vote of the California Legislature to divest is really powerful, and that’s going to get press coverage around the world,” Davidson said. “That is part of the outcome that we want.”
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1 Kristine Lawler
Subject: 8a and 14b Correspondence Received - Eileen Mitro ‐‐‐‐‐Original Message‐‐‐‐‐
From: Eileen Mitro <climateacƟ[email protected]>
Sent: Wednesday, August 2, 2023 10:23 AM
To: KrisƟne Lawler <[email protected]>
Subject: Comments to City Council Members
Hi KrisƟne,
I just have a couple of comments for the City Council for tonight’s meeƟng.
On Item 8a:
Please be especially judicious about the tree trimming in our City of Trees. I well understand the need to prune trees near power lines. It appears that the parameters of this work take care to tend the trees and encourage healthy growth.
I affirm that and hope that only severely diseased or dead trees are removed. Thank you.
On Item 14b:
We have been asking the City of Ukiah to divest from fossil fuel investments for several years. As I understand it those investments are not yielding good returns. Also climate catastrophes are happening with alarming frequently in the country and around the world. Fossil fuel companies acted irresponsibly decades ago causing inacƟon on reducing emissions. SupporƟng their operaƟon is contrary to good stewardship of the planet and our livability in the future.
Eileen Mitro
Climate AcƟon Mendocino
1 Kristine Lawler
Subject: 14b Correspondence Received - Steve Scalmanini Attachments: 20230628 Meet the 30 Top US and European Asset Managers Helping Big Oil Wreck the Planet - ''Asset managers continue to add fuel to the fire by buying the bonds from the worst fossil fuel polluters,'' said one campaigner.doc; 20230600 WHO’S MANAGING YOUR FUTURE^ - An assessment of asset managers’ climate action - by Reclaim Finance, The Sunrise Project & the Sierra Club [20pp].pdf; 20230409 Fossil fuels are a losing bet. Why are CalPERS & CalSTRS still investing in them^ - by James Stone.doc; 20221201 Florida Will Pull $2 Billion of Assets From BlackRock Over ESG.doc; 20221102 Here’s where the big U.S. banks stand up and fall down on climate change - Sierra Club updates report on banking-sector progress toward net-zero emission goals ahead of the U.N.'s COP27.doc; 20220510 Campaign Targets 'Toxic' Bond Market for Bankrolling Fossil Fuel Expansion - ''Dirty energy companies are using the corporate bond market as the back door to secure large amounts of cash for expansion projects.''.doc; 20220330 Banking on Climate Chaos - Fossil Fuel Finance Report 2022 - by Rainforest Action Network & 6 other NGOs [40pp].pdf; 20211117 Boston City Council says no to fossil fuel investments.doc; 20200318 JPMorgan Chase Tops Dirty List Of 35 Fossil Fuel-Funding Banks - Forbes.doc; 20230628 US Public Pensions Are Paying Huge Price for Not Divesting From Fossil Fuels, Report Shows - ''The writing's on the wall for fossil fuels,'' said one divestment campaign.doc; 20230622 Church of England dumps oil majors over climate concerns - Anglican Church announces its endowment and pension funds plan to sell out of 11 groups, including Shell and BP.doc; 20210405 Petaluma City Council Item 4A - Resolution Urging CalPERS to Divest CalPERS' Holdings in Fossil Fuel Campanies from Statewide Pension Investments & etc [8pp].pdf; 20190603 Charlottesville Divests from Weapons and Fossil Fuels.doc From: Steve Scalmanini <[email protected]>
Sent: Wednesday, August 2, 2023 1:22 AM
To: Meeting <[email protected]>
Subject: Public Comment for Item 14.b on City Council Agenda on August 2 To the City Council,
Please consider the attached articles and reports in addition to the two articles that are included with Item 14.b.
Sincere thanks,
Stephen Scalmanini
Ukiah
Charlottesville Divests from Weapons and Fossil Fuels
By Divestment, North America
June 3, 2019
World Beyond War
https://worldbeyondwar.org/charlottesville-divests-from-weapons-and-fossil-fuels On the evening of June 3, 2019, the City Council of Charlottesville, Va., voted to divest the funds in its operating budget from weapons dealers and fossil fuel producers. Here’s the resolution as passed by the City Council: PDF. The city has also committed to taking the same step with its retirement fund by this coming autumn.
The proposal to do this was brought to the city in March by a coalition of groups called Divest Cville, which attended and spoke at city council meetings (see videos), held rallies, wrote letters, made flyers, bought ads, produced responses to possible objections, met with the City Treasurer, and presented a petition.
David Swanson, Executive Director of World BEYOND War, one of the organizations involved, said that combining weapons with fossil fuels was not just a matter of listing the two worst investments, but was a step intentionally taken to highlight the connections between the two industries.
A major motivation behind some wars is the desire to control resources that poison the earth, especially oil and gas. In fact, the launching of wars by wealthy nations in poor ones does not correlate with human rights violations or lack of democracy or threats of terrorism, but does strongly correlate with the presence of oil.
Divest Cville made the following case:
U.S. weapons companies supply deadly weapons to numerous brutal dictatorships around the globe, and companies Charlottesville currently has public funds invested in include Boeing and Honeywell, which are major suppliers of Saudi Arabia’s horrific war on the people of Yemen.
The current federal administration has labeled climate change a hoax, moved to withdraw the U.S. from the global climate accord, attempted to suppress climate science, and worked to intensify the production and use of warming-causing fossil fuels, with the burden therefore falling on city, county, and state governments to assume climate leadership for the sake of their citizens’ wellbeing and the health of local and regional environments.
Militarism is a major contributor to climate change, and the City of Charlottesville had already urged the U.S. Congress to invest less in militarism and more in protecting human and environmental needs.
Continuing on the current course of climate change will cause a global average temperature rise of
4.5ºF by 2050, and cost the global economy $32 trillion dollars.
Five-year averages of temperature in Virginia began a significant and steady increase in the early 1970s, rising from 54.6 degrees Fahrenheit then to 56.2 degrees F in 2012, and the Piedmont area has seen the temperature rise at a rate of 0.53 degrees F per decade, at which rate Virginia will be as hot as South Carolina by 2050 and as northern Florida by 2100;
Economists at the University of Massachusetts at Amherst have documented that military spending is an economic drain rather than a jobs-creation program, and that investment in other sectors is economically beneficial.
Satellite readings show water tables dropping worldwide, and more than one in three counties in the United States could face a “high” or “extreme” risk of water shortages due to climate change by the middle of the 21st century, while seven in ten of the more than 3,100 counties could face “some” risk of shortages of fresh water.
Wars are often fought with U.S.-made weapons used by both sides. Examples include U.S. wars in Syria, Iraq, Libya, the Iran-Iraq war, the Mexican drug war, World War II, and many others.
Heat waves now cause more deaths in the United States than all other weather events (hurricanes, floods, lightning, blizzards, tornados, etc.) combined, and dramatically more than all deaths from terrorism. An estimated 150 people in the United States will die from extreme heat every summer day by 2040, with almost 30,000 heat-related deaths annually.
Local government investing in companies producing weapons of war implicitly supports federal war spending on those same companies, many of which depend on the federal government as their primary customer.
Between 1948 and 2006 “extreme precipitation events” increased 25% in Virginia, with negative impacts on agriculture, a trend predicted to continue, and global sea level is projected to rise an average of at least two feet by the end of the century, with rising along the Virginia coast among the most rapid in the world.
Weapons companies that Charlottesville can commit to not investing in produced the weapons brought to Charlottesville in August 2017.
Fossil fuel emissions must be cut by 45% by 2030 and to zero by 2050 in order to hold warming to the
2.7 ºF (1.5 ºC) goal targeted in the Paris Accord.
Climate change is a serious threat to the health, safety and welfare of the people of Charlottesville, and the American Academy of Pediatrics has warned that climate change poses a threat to human health and safety, with children being uniquely vulnerable, and calls failure to take “prompt, substantive action” an “act of injustice to all children.”
The rate of mass shootings in the United States is the highest anywhere in the developed world, as civilian gun manufacturers continue to reap enormous profits off bloodshed that we do not need to invest our public dollars in.
DivestCville is sponsored by: Charlottesville Center for Peace and Justice, World BEYOND War.
Also endorsed by: Indivisible Charlottesville, Casa Alma Catholic Worker, RootsAction, Code Pink, Charlottesville Coalition For Gun Violence Prevention, John Cruickshank of the Sierra Club, Michael Payne (candidate for City Council), Charlottesville Amnesty International, Dave Norris (former Charlottesville Mayor), Lloyd Snook (candidate for City Council), Sunrise Charlottesville, Together Cville, Sena Magill (candidate for City Council), Paul Long (candidate for City Council), Sally Hudson (candidate for state delegate), Bob Fenwick (candidate for City Council).
5 Comments
1. Maryellen
June 3, 2019 at 10:34 pm
Amazing work!! Kudos!!
Reply
2. Peter Franklin Davis
June 7, 2019 at 10:22 am
PEACEWORKS NO//Leverett’s Secret Garden Club
Reply
3. John Millar
June 19, 2019 at 9:43 am
Fantastic. Well done!
Reply
4. Alex Wishlow
June 19, 2019 at 10:25 am
Thank you!
Reply
5. Lorraine Cross
January 10, 2021 at 10:20 am
Can more women be involved, especially on the city council ? Reply
JPMorgan Chase Tops Dirty List Of 35 Fossil Fuel-Funding Banks By David Vetter, Senior Contributor, Climate research, renewables and circularity March 18, 2020
Forbes
https://www.forbes.com/sites/davidrvetter/2020/03/18/jpmorgan-chase-tops-dirty-list-of-35-fossil-fuel-funding-banks Protesters picketing outside a Chase Bank branch in New York. A new report shows that JPMorgan Chase tops a list of 35 banks that have invested $2.7 trillion in fossil fuel companies since the signing of the Paris Agreement in 2015.
LIGHTROCKET VIA GETTY IMAGES
JPMorgan Chase contributes more money towards fossil fuel industries than any other bank, putting a total of $268 billion into coal, oil and gas firms over the last four years, according to a new study.
In total, the world’s biggest banks have put $2.7 trillion into those industries since the 2015 Paris Agreement, according to the Banking on Climate Change 2020 report, which tracked data on 35 private financial institutions. While investments to the biggest coal, oil and gas producers fell in the immediate aftermath of the Paris Agreement, researchers found that in 2019 those investments shot back up by some 40%.
Another three U.S. banks—Wells Fargo, Citibank and Bank of America—joined JPM to round out the top four fossil fuel investors; Canada’s RBC took fifth position. Britain’s Barclays was the largest European investor in fossils overall, having plowed $118 billion into hydrocarbons,
but according to the report, French firm BNP Paribas overtook all other European banks in 2019, putting more than $30 billion into fossil financing.
Alison Kirsch, lead researcher for the Rainforest Action Network, which prepared the report, told Forbes.com: “Banks are increasingly being recognized as major drivers of the climate crisis—the $2.7 trillion in financing that 35 major global banks poured into fossil fuels since the Paris Agreement makes that quite clear.
“JPMorgan Chase stands out as the world's worst banker of climate chaos by far, year after year.
Given this enormous impact on people and the planet, Chase and its peers must take bold measures to end financing for the expansion of the fossil fuel sector, and commit to exiting the sector entirely soon.”
In a statement, JPMorgan Chase referred to an announcement in February saying the bank would expand its commitment to low-carbon and clean energy.
“The new commitments we announced in February reflect our ongoing efforts to help address climate change and promote more sustainable development,” the statement said. “This includes financing to support climate action and the United Nations Sustainable Development Goals, backing market-based policy solutions to reduce carbon emissions, expanding restrictions on financing for coal mining and coal-fired power, and prohibiting project financing for new oil and gas development in the Arctic. We’re building capacity within our business to tackle these challenges and look forward to working with our clients and other stakeholders on ways to grow our impact over time.”
As well as looking at investments, the Banking on Climate Change report rated the banks for their commitment to ending fossil fuel expansion and financing. The top overall scorer was Crédit Agricole, with 82 points out of 200, while the bank rated to have done the most to restrict its oil and gas financing was BNP Paribas, with a score of 30.5 out of 120.
Responding to the report, a spokesperson for BNP Paribas told Forbes.com that the report “highlights the commitments made over the long term by BNP Paribas to reduce the use of fossil fuels,” and emphasized the bank’s top score for its oil and gas policy.
At the same time, the bank strongly refuted the report’s finding that it invested the most of any European bank in fossil fuels. “With regard to the increase in fossil fuel financing that is granted to BNP Paribas, this does not correspond to reality,” the spokesperson said. “The bank's financing remained stable. Transactions that have increased do not correspond to financing by the bank, but rather to participation in the structuring and distribution of syndicated loans or bond issues on the financial markets. These mainly involve asset disposals between existing asset companies and do not contribute to the creation of new oil and gas capacities.” The report’s authors stand by their research. Lorne Stockman, senior research analyst for Oil Change International, which also contributed to the report, said:
“These banks have bet against the Paris Agreement ... As the human and financial costs of climate change mount up, they have doubled down on the fossil fuels driving the climate crisis.
It’s beyond time banks took seriously their responsibility for financing the greatest threat to the global economy. There is no excuse for carrying on with business as usual. It’s time to stop funding fossils, period.”
The Banking on Climate Change report was put together by an alliance of six NGOs: Rainforest Action Network; Banktrack; Indigenous Environmental Network; Oil Change International; Reclaim Finance; and Sierra Club.
Energy experts have reacted to the report with interest. Charles Donovan, Executive Director of the Centre for Climate Finance and Investment at London’s Imperial College Business School, said: “These figures confirm what we know already—it’s the big American banks backing oil and gas, with the Chinese giants stepping into the breach on coal.” Donovan, who last week told this column that renewables have the potential to provide better economic stability than fossil fuels in times of crisis, said investors should consider not just the environmental but also the financial risks of backing fossil fuels. “What investors need to understand is banks’ net financial exposures to these sectors, not just gross exposures based on lending and underwriting. That’s where better disclosures are needed and it’s up to financial regulators to make that happen,” he said.
I’ve also reached out to Wells Fargo and Citibank for their responses.
Follow me on Twitter.
David Vetter
My key interests are in decarbonization and the development of circular economies.
DATE: April 5, 2021
TO: Honorable Mayor and Members of the City Council through the City Manager FROM: Corey Garberolio, Finance Director
Eric Danly, City Attorney
SUBJECT: Resolution Urging CalPERS to Divest CalPERS’ Holdings in Fossil Fuel Companies from Statewide Pension Investments and to Offer Member Agencies Portfolio Options Consisting of High-performing Environmental, Social, and Corporate Governance (ESG) Investments that Exclude Investments in Fossil Fuel Companies
RECOMMENDATION
It is recommended that the City Council adopt the attached resolution urging CalPERS to divest its holdings in fossil fuel companies from statewide pension investments and to offer member agencies portfolio options consisting of high-performing environmental, social, and corporate governance (ESG) investments that exclude investments in fossil fuel companies.
BACKGROUND
On December 12, 2015, 196 parties participating in the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change in Paris, France, signed the 2015 Paris Agreement, an international treaty on climate change that became effective on November 4, 2016. Pursuant to the Paris Agreement, the signatory parties vowed to keep global warming in this century "well below 2° C above pre-industrial levels" and to "pursue efforts to limit temperature increase even further to 1.5° C."
The 2018 International Panel on Climate Change Special Report on Global Warming of 1.5° C estimates that humans have already caused about 1.0° C of global warming above pre-industrial levels, and to have a 66% chance of limiting global warming to 1.5° C, requires not exceeding the remaining global "carbon budget," which is equal to about 10 years of current-level greenhouse gas (GHG) emissions. Scientists in the U.S. and abroad have concluded that current global warming has contributed to the increasing frequency and intensity of wildfires, floods, droughts, heat waves, and hurricanes. Northern California wildfires in 2017-2020 destroyed at least 40k+ structures, killed many, displaced thousands, and caused serious reductions in air quality. According to a report entitled “Rising Seas in California – an Update on Sea Leve Rise Science” prepared by a working group of the California Ocean Protection Council Science Advisory Team published in April, 2017, the current pace of sea-level rise is already impacting California' s coastline. According to a 2020 report of the Intergovernmental Science-Policy Agenda Item 4.A
1
Platform on Biodiversity and Ecosystem Services, a United Nations committee, to which 145 authors from 50 countries contributed, climate change, along with other factors like changes in land and sea use, and pollution, is causing a sixth mass extinction of species, which is currently under way. =
The City of Petaluma is committed to the environmental and economic sustainability of our city, region, state, nation, and world. On January 11, 2021, the City Council adopted a Climate Emergency Framework recommending that the City achieve carbon neutrality by 2030.
However, the City’s engagement with climate change issues began almost a decade earlier. On August 5, 2002, the City Council approved Resolution No. 2002-117 N.C.S. adopting the Cities for Climate Protection Program’s five milestones to reduce GHG emissions. Milestone one was a GHG inventory to establish the quantity of emissions in the jurisdiction. Milestone two was establishment of a GHG reduction goal. The City completed milestone two by adopting Resolution No. 2005-118 N.C.S. on July 18, 2005 setting GHG reduction targets. The City accomplished milestone three by adopting Resolution No. 2009-165 N.C.S. on October 5, 2009 approving an action plan to reduce GHG emissions to meet the City’s GHG reduction target.
The Sonoma County Regional Climate Protection Agency (RCPA) formed in 2009 to coordinate county-wide response to climate change. The RCPA, with input from Sonoma County participating agencies, including the City, developed the Climate Action 2020 and Beyond Plan to be a comprehensive framework for coordinated action on climate change, including updated GHG reduction targets for each RCPA member jurisdiction. Unfortunately, the Environmental Impact Report for the Climate Action 2020 and Beyond Plan was successfully challenged on CEQA grounds, which prevented local jurisdictions’ adoption of the Plan. Nonetheless, on January 22, 2018, the City Council adopted Resolution No. 2018-009 N.C.S. reaffirming the City of Petaluma’s intent to reduce greenhouse gas emissions as a part of the regional effort coordinated by the RCP A and to adopt local implementation measures as identified in the Climate Action 2020 and Beyond Report.
On May 6, 2019, the City Council adopted Resolution No. 2019-055 N.C.S. declaring a climate emergency and recognizing the need to increase efforts toward combating climate change. On August 5, 2019, the City Council adopted Ordinance No. 2689 N.C.S. establishing a Climate Action Commission. The City Council established the Commission to elevate climate issues to the highest priority in its goal-setting process and to give precedence to climate mitigation and adaption when evaluating policies, purchases, and projects, allocating resources and seeking financial and regulatory aid to support the City’s climate efforts.
DISCUSSION
The City of Petaluma is a member of the California Public Employees’ Retirement System (CalPERS), the largest public pension fund in the United States, with approximately $445 billion in assets. The value of Petaluma’s assets managed by CalPERS is approximately $237 million.
The City of Petaluma has an obligation to invest its assets in a way that will protect and promote the health, safety, and well-being of our residents. Although we have outsourced our retiree investment portfolio management to CalPERS, our obligation to invest in a manner that is 2
committed to the well-being of our community, city, state, nation and world remains a top priority. The City’s CalPERS assets should be invested responsibly and aligned with the values of our residents and the City Council’s policy direction. Just as City policies and actions seek to create a carbon neutral community, the City’s investments should promote technologies that counteract human contributions to climate change.
While it is important that Petaluma’s investments should reflect its values, it is also important that they achieve a strong return. These objectives can be complementary. Fossil fuel divestment is sound pension fund investment practice as the value of fossil fuel investments decrease as governments act to limit carbon emissions. New technology and clean energy markets will continue to expand, creating additional investment opportunities that can help alleviate investment impacts resulting from divestment from the fossil fuel industry.
To date, CalPERS has not acted to divest its holdings in fossil fuel companies and to shift its focus to the renewable energy economy. The need for rapid and significant changes to the climate crisis justifies CalPERS’ action to divest fossil fuel industry investment from the entire CalPERS portfolio, and staff supports that approach. In addition, staff recommends that the Council urge CalPERS to offer member agencies portfolio options consisting of high-performing Environmental, Social, and Corporate Governance (ESG) investments that exclude investments in fossil fuel companies. Staff is aware that the League of California Cities has opposed wholesale changes to the CalPERS investment portfolio in the past. Allowing an opt-in option for CalPERS members to avoid investments in fossil fuel companies may be an acceptable compromise.
If the attached resolution is supported by the Council, staff recommend distribution of the resolution to colleagues throughout the region to help garner support from other municipalities and increase the likelihood of implementation by CalPERS.
PUBLIC OUTREACH
This item was added to the March 15, 2021 agenda during the City Council meeting held on March 1, 2021 and published in accordance with public noticing requirements. If approved, the City will utilize its website and social media channels, as well as other outreach methods, to publicize this resolution.
ALIGNMENT WITH CLIMATE EMERGENCY FRAMEWORK
The Adaptation and Social Resilience section of the City of Petaluma’s Climate Emergency Framework discusses in its vision for the future and the need to “stop investing in systems which weaken the health of the community and the ecosystems upon which we depend and invest in systems which better prepare the City for the future.” As fossil fuel-based industries are main contributors to human-caused climate change, divesting from those industries and investment in beneficial industries is completely aligned with the Climate Emergency Framework vision.
Advocating for changes to the CalPERS’ investment portfolio to which the City and its members contribute allows the City to impact greenhouse gas emissions beyond city limits. 3
If the resolution is approved by the Council, this action can contribute to the Climate Emergency Framework’s Community Engagement goal of “promoting climate literacy throughout the community.”
ENVIRONMENTAL COMPLIANCE
The proposed resolution is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines section 15378, subdivision a. The proposed resolution involves the creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment, and Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment, in accordance with Section 15378, subdivision b of the CEQA Guidelines.
FINANCIAL IMPACTS
There are no direct costs associated with this action.
ATTACHMENTS
1. Resolution- urging CalPERS to divest its holdings in fossil fuel companies from statewide pension investments.
4
Attachment 1
RESOLUTION URGING CALPERS TO DIVEST ITS HOLDINGS IN FOSSIL
FUEL COMPANIES FROM STATEWIDE PENSION INVESTMENTS AND TO
OFFER MEMBER AGENCIES PORTFOLIO OPTIONS CONSISTING OF
HIGH-PERFORMING ENVIRONMENTAL, SOCIAL, AND CORPORATE
GOVERNANCE (ESG) INVESTMENTS THAT EXCLUDE INVESTMENTS IN
FOSSIL FUEL COMPANIES
WHEREAS, on December 12, 2015, 196 parties participating in the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change in Paris, France, signed the 2015 Paris Agreement, an international treaty on climate change that became effective on November 4, 2016, and, pursuant to the Paris Agreement, the signatory parties vowed to keep global warming in this century "well below 2° C above pre-industrial levels" and to "pursue efforts to limit temperature increase even further to 1.5° C;" and WHEREAS, the 2018 International Panel on Climate Change Special Report on Global Warming of 1.5° C estimates that humans have already caused about 1.0° C of global warming above pre-industrial levels, and to have a 66% chance of limiting global warming to 1.5° C, requires not exceeding the remaining global "carbon budget," which is equal to about 10 years of current-level greenhouse gas (GHG) emissions; and
WHEREAS, scientists in the U.S. and abroad have concluded that current global warming has contributed to the increasing frequency and intensity of wildfires, floods, droughts, heat waves, and hurricanes; and
WHEREAS, Northern California wildfires in 2017-2020 destroyed at least 40k+ structures, killed many, displaced thousands, and caused serious reductions in air quality; and WHEREAS, According to a report entitled “Rising Seas in California – an Update on Sea Leve Rise Science” prepared by a working group of the California Ocean Protection Council Science Advisory Team published in April, 2017, the current pace of sea-level rise is already impacting California' s coastline; and
WHEREAS, according to a 2020 report of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, a United Nations committee, to which 145 authors from 50 countries contributed, climate change, along with other factors like changes in land and sea use, and pollution, is causing a sixth mass extinction of species, which is currently under way; and
WHEREAS, the City of Petaluma is committed to the environmental and economic sustainability of our city, region, state, nation, and world, and has taken the following actions directed at climate change response and sustainability of the City; 5
• On August 5, 2002, the City Council approved Resolution No. 2002-117 N.C.S. adopting the Cities for Climate Protection Program’s (CCPP) five milestones to reduce greenhouse gas (GHG) emissions, with milestone one a GHG inventory to establish the quantity of emissions in the jurisdiction;
• On July 18, 2005, the City completed milestone two of the CCPP by adopting Resolution No. 2005-118 N.C.S. setting GHG reduction targets;
• On October 5, 2009 the City completed CCPP milestone three by adopting Resolution No. 2009-165 N.C.S. which approved an action plan to reduce GHG emissions to meet the City’s GHG reduction target;
• On January 22, 2018, the City Council adopted Resolution No. 2018-009 N.C.S. reaffirming the City of Petaluma’s intent to reduce greenhouse gas emissions as a part of the regional effort coordinated by the RCPA and to adopt local implementation measures as identified in the RCPA Climate Action 2020 and Beyond Report; • On May 6, 2019, the City Council adopted Resolution No. 2019-055 N.C.S. declaring a climate emergency and recognizing the need to increase efforts towards combating climate change;
• On August 5, 2019, the City Council adopted Ordinance No. 2689 N.C.S. establishing a Climate Action Commission to elevate climate issues to the highest priority in the City’s goal-setting process and to give precedence to climate mitigation and adaption when evaluating policies, purchases, and projects, allocating resources and seeking financial and regulatory aid to support the City’s climate efforts; • On January 11, 2021, the City Council adopted a Climate Emergency Framework recommending that the City achieve carbon neutrality by 2030; and WHEREAS, according to the City’s adopted Climate Emergency Framework, there is a moral imperative to prioritize climate-related actions and policies that promote social, racial, environmental, economic, disability and public health justice in communities disparately impacted by climate change, and frontline and underserved communities are expected to receive a disproportionately higher impact from climate change and to have fewer resources available with which to address those impacted; and
WHEREAS, the City’s Climate Emergency Framework recommends that the City give preference to actions and policies with multiple benefits that align sustainable economies with thriving ecologies, including sustainable economic benefits, reduction of pollutants and toxins, restoration of ecosystems and improvements in public health, community cohesion and wellbeing; and
WHEREAS, the Climate Emergency Framework urges that the City set an example by acting responsibly to its neighbors, the global community and all species by eliminating reliance on resources and products that pollute both within and outside the City, and that the City work collectively with leading regional, statewide and international bodies, so that Petaluma learns from the successes and failures of other cities and jurisdictions in addressing the myriad challenges and impacts of climate change so that cross-jurisdictional coordination regarding climate action can magnify the effectiveness of the City’s efforts; and 6
WHEREAS, according to the Sacramento Bee, citing an analysis conducted by Torontobased Corporate Knights, and a report published by Fossil Free California in November, 2020, in 2009 17.6 percent of CalPERS’ investments were in fossil fuel companies, defined as companies with more than 10 percent of revenues coming from fossil fuel activity, and CalPERS’ investment portfolio would have realized greater returns if CalPERS’ investments in fossil fuel companies had been divested ten years ago and distributed across the spectrum of the rest of CalPERS public equities over that period; and
WHEREAS, CalPERS has acknowledged that the regulatory, physical, and reputational risks posed by climate change need to be mitigated within CalPERS’ overall investment portfolio, but has resisted calls from groups like Fossil Free California to divest fossil fuel investments, and remains committed to a policy of engagement with rather than divestment from fossil fuel companies to manage climate risk and deliver climate solutions and the returns needed to pay benefits from CalPERS’ underfunded pension funds; and WHEREAS, this resolution is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines section 15378, subdivision a, and because this resolution involves the creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment, and Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment, in accordance with Section 15378, subdivision b of the CEQA Guidelines; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma as follows:
1. The above recitals are hereby declared to be true and correct and are incorporated into this resolution as findings of the City Council.
2. This resolution is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines section 15378, subdivision a. This resolution involves the creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment, and Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment, in accordance with Section 15378, subdivision b of the CEQA Guidelines
7
3. The City Council urges CalPERS to immediately instruct CalPERS’ asset managers to take steps to stop any new investments in companies with more than 10 percent of revenues coming from fossil fuel activity and whose operations involve the extraction of fossil fuels.
4. The City Council urges CalPERS to immediately instruct CalPERS’ asset managers to take steps to divest from companies with more than 10 percent of revenues coming from fossil fuel activity, and to reallocate CalPERS investments across the spectrum of the rest of CalPERS public equities, preferably with a focus on sound investments that deliver climate solutions and the returns needed to pay benefits from CalPERS’ underfunded pension funds.
5. The City Council urges CalPERS to develop a high-performing Environmental, Social, and Corporate Governance (ESG) portfolio free of investments in companies with more than 10 percent of revenues coming from fossil fuel activity to which CalPERS member agencies may direct a portion of their CalPERS investments. 8
Boston City Council says no to fossil fuel investments
By Milton J. Valencia and Sabrina Shankman
November 17, 2021
Boston Globe
https://www.bostonglobe.com/2021/11/17/metro/council-says-no-fossil-fuel-investments The City of Boston is poised to give final approval to a law that would divest city funds from the fossil fuel industry, a symbolic but forceful message supporting green energy investment as Massachusetts officials are set to similarly debate where to devote state resources.
In a unanimous vote, the City Council passed an ordinance Wednesday that would prevent the city treasury office from investing any funds in the fossil fuel industry, including infrastructure. The ordinance does not place any restrictions on pension investments, however, since those are governed by state law, but the overwhelming support sends a message as the state also weighs how to invest pension funds.
The ordinance was sent to Mayor Michelle Wu for final approval. Wu’s office did not immediately respond for comment. But as a councilor, Wu cosponsored the ordinance earlier this year, suggesting that the measure is likely to be among the first legislation she will sign as mayor. Wu supported similar reviews of ways to divest from fossil fuels through her eight-year tenure on the council. “As we’ve stated many times, our budget is a statement of our values,” City Councilor Lydia Edwards, a lead sponsor of the ordinance, said at Wednesday’s council hearing, urging colleagues to support the measure.
“Where we invest our money is a statement of our priorities, and this is following the rich history of this city saying we will not invest in things that aren’t helpful, that will not bring a more equitable future, and that now, today, don’t bring about a more green future, an infrastructure that we need,” she continued.
The ordinance requires the city’s collector-treasurer to divest city funds out of “stocks, securities or other obligations of any company which derives more than fifteen percent of its revenue from the combustion, distribution, extraction, manufacture, or sale of fossil fuels, which shall include coal, oil and gas, or fossil fuel products.”
The city’s treasury department oversees investments totaling about $2 billion, but a third of that portfolio is governed by state laws and restrictions, leaving Boston officials in control of just over $1.3 billion worth of investments, city officials said. Already, the city in recent years has moved to invest more in green energy. The proposed city ordinance would go further by essentially restricting any investments in the fossil fuel industry.
Edwards said the ordinance would remove about $65 million in city investments from fossil fuels, though the legislation would set a 2025 deadline for full divestment.
The vote came as welcome news to advocates in the state who have been pushing for divestment. “A little bit adds up to a lot,” said Cabell Eames, political director for 350 Massachusetts, a climate action
group. “If Boston does it, who’s to say that Northampton won’t do it? And if Northampton does it, who’s to say that Haverhill won’t do it?”
The city has historically prevented investments in other controversial industries, such as the tobacco industry, as a way to send a social justice message. The council passed a similar ordinance in 1984 divesting public funds in companies doing business in the Republic of South Africa.
City Councilor Matt O’Malley, who cosponsored the legislation with Edwards and Wu, said the measure also makes financial sense. Investing in green energy industries is more profitable than those involved in fossil fuels, he said.
“It’s not only the right thing to do when we talk about divestment but also, we do have a fiduciary responsibility to our taxpayers,” O’Malley said. “This is not only good for the planet, but it’s good for our bottom line.”
The city’s approval of the law could push the state to take equal action, part of a broader push to divest taxpayer funds from fossil fuels. The state — which boasts a $95 billion investment portfolio — has resisted divesting, despite 17 years of calls from residents for it to do so.
Earlier this year, State Treasurer Deborah Goldberg announced that the state pension plan will pursue incorporating an environmental, social, and corporate governance framework into its investment decisionmaking process, but what that will look like remains unclear.
Mary Cerulli, cofounder of Climate Finance Action, said that Goldberg has used the powers of her office to fight the climate crisis in other ways, including voting against reinstating former Exxon CEO Lee Raymond on the JPMorgan Chase board of directors. She also voted this year against CEOs, chairmen, and directors at seven major oil companies, three global banks, and six utility companies, according to Cerulli.
Bill McKibben, a leader of the divestment movement, said, though, that state officials could do more, calling the divestment in fossil fuel resources an “easy and obvious place” for climate action in Massachusetts.
He pointed to successful divestment campaigns in Maine, New York State, and Quebec, as well as the recent decision by Harvard University to divest, and said it is a “crazy fact that the state pension fund is still investing in fossil fuels.”
“When you’re trailing Harvard University on these things you know you’re behind the curve,” he said.
Milton J. Valencia can be reached at [email protected]. Follow him on Twitter @miltonvalencia. Sabrina Shankman can be reached at [email protected]. Follow her on Twitter @shankman.
FOSSIL FUEL FINANCE REPORT 2022
EXECUTIVE SUMMARY
INTRODUCTION
LEAGUE TABLE: BANKING ON FOSSIL FUELS
KEY FINDINGS
The Dirty Dozen
Global Banks are Driving Oil and Gas Expansion
2021: A Year of Hypocrisy
Bank Policies Are Not Addressing the Problem
Leaders Setting the Example on No Fossil Fuel Expansion Extreme Laggards
Banks’ Top Fossil Fuel Clients Are Sabotaging the Future
CASE STUDIES
METHODOLOGY
INDIGENOUS RESISTANCE: AS URGENT AS EVER
FOSSIL FUEL EXPANSION
Big Oil Reality Check: Oil and Gas Companies Plan
Expansion Far Beyond Climate Goals
League Table – Banking on Fossil Fuel Expansion
TAR SANDS OIL
Topline Findings
League Table - Banking on Tar Sands Oil
2 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 3
TABLE OF CONTENTS
3 4
8 12
13 14
16 18
20 20
21 22
24 28
32 33
34 38
39 40
42 43
44 46
47 48
50 51
52 54
55 56
58 59
60 62
64 66
68 72
77 The Caldor fire in the foothills of the Sierra Mountain range, near Lake Tahoe, California burned 221,835 acres over 69 days in 2021 and evacuated more than 50,000 residents of the surrounding area.
PHOTO : Nikki Ritcher / We Animals Media
ARCTIC OIL & GAS
Topline Findings
League Table - Banking on Arctic Oil and Gas
OFFSHORE OIL & GAS
Topline Findings
League Table - Banking on Offshore Oil and Gas
FRACKED OIL & GAS
Topline Findings
League Table - Banking on Fracked Oil and Gas
LIQUEFIED NATURAL GAS (LNG)
Topline Findings
League Table - Banking on LNG
COAL MINING & POWER
Topline Findings
League Table - Banking on Coal Mining
League Table - Banking on Coal Power
CONCLUSION AND DEMANDS
APPENDIX: BANKS INCLUDED
ENDNOTES
ENDORSEMENTS
ACKNOWLEDGEMENTS
EXECUTIVE SUMMARY
Fossil fuel financing from the world’s 60
largest banks has reached USD $4.6 trillion
in the six years since the adoption of the Paris
Agreement, with $742 billion in fossil fuel
financing in 2021 alone. This report examines
commercial and investment bank financing
for the fossil fuel industry — aggregating their
leading roles in lending and underwriting debt
and equity issuances — and finds that even
in a year where net-zero commitments were
all the rage, the financial sector continued its
business-as-usual driving of climate chaos.
Fossil fuel financing plateaued last year,
amid a lagging recovery from the COVID-19
pandemic — yet at levels still higher than in
2016, the first year after the Paris Agreement
was adopted. These findings underscore the
need for banks to immediately implement
policies that end their financing for fossil fuel
expansion and begin to zero out their support
altogether.
Overall fossil fuel financing remains dominated
by four U.S. banks — JPMorgan Chase, Citi,
Wells Fargo, and Bank of America — who
together account for one quarter of all fossil
fuel financing identified over the last six years.
RBC is Canada’s worst banker of fossil fuels,
with Barclays as the worst in Europe and MUFG
as the worst in Japan.
These banks may tout their commitments to
helping their clients transition, and yet the 60
banks profiled in this report funneled $185.5
billion just last year into the 100 companies
doing the most to expand the fossil fuel sector,
such as Saudi Aramco and ExxonMobil —
even when carbon budgets make clear that we
cannot afford any new coal, gas, or oil supply
or infrastructure.
Banking on Climate Chaos 2022 also assesses
bank financing for top companies in certain
spotlight fossil fuel sectors, and highlights the
communities fighting projects in these sectors
that threaten their lives and livelihoods.
As for banks heading in the right direction,
France’s La Banque Postale has set the
bar for oil and gas policies, publishing in
2021 a commitment to end financing for all
companies expanding oil and gas, and exit
the sector completely by 2030. Banks such as
Crédit Agricole and Nordea Bank have made
similar commitments on coal. Their global
peers must also take on the crucial task of
immediately ending financing for fossil fuel
expansion and beginning to phase out all
other fossil fuel financing, lest they lead our
world further into climate disaster.
» Full datasets are available for download at: BankingonClimateChaos.org Tar sands oil: Alarmingly, tar sands saw a 51% increase in financing from 2020–2021, to $23.3 billion, with the biggest jump coming from Canadian banks RBC and TD.
Arctic oil and gas: JPMorgan Chase, SMBC Group, and Intesa Sanpaolo were the top bankers of Arctic oil and gas last year. The sector saw $8.2 billion in funding in 2021, underscoring that policies restricting direct financing for projects don’t go far enough.
Offshore oil and gas: Big banks funneled $52.9 billion into offshore oil and gas last year, with U.S. banks Citi and JPMorgan Chase providing the most financing in 2021. BNP Paribas was the biggest banker of offshore oil and gas over the six year period since the Paris Agreement.
Fracked oil and gas: Fracking saw $62.1 billion in financing last year, dominated by North American banks with Wells Fargo at the top, funding producers like Diamondback Energy and pipeline companies like Kinder Morgan.
Liquefied natural gas (LNG): Morgan Stanley, RBC, and Goldman Sachs were 2021’s worst bankers of LNG, a sector that is looking to banks to help push through a slate of enormous infrastructure projects.
Coal mining: Coal mining financing is led by the Chinese banks, with China Everbright Bank and China CITIC Bank as the worst financiers in 2021. Big banks overall provided $17.4 billion to the sector last year.
Coal power: Coal power funding has been essentially flat the last three years, at around $44 billion — which is alarming given that coal power needs to be rapidly phased out this decade and next. China Merchants Bank and Ping An Group led financing for the sector last year.
BANKING ON CLIMATE CHAOS 2022 5
INTRODUCTION
In a year that saw unprecedented attention
to banks’ role in driving climate change, one
of the most important developments flew
largely under the radar: La Banque Postale
— a major French bank with $901.7 billion
in assets1
— announced a groundbreaking
policy that suspends support for all companies
expanding oil and gas, and commits the bank
to exit oil and gas financing entirely by 2030.2
That policy sets a new bar that every major
bank must meet in this crucial decade for the
climate. Potential emissions from fossil fuels
already in production or under construction
— the wells already drilled or being drilled, the
mines already dug — takes the world well past
2°C of global heating, and in-production oil
and gas alone more than exhausts the 1.5°C
carbon budget.3
Experience shows us that new
oil and gas fields and new coal mines, once
developed, are locked in: there is overwhelming
pressure to fully extract them. Furthermore, new
or expanded fossil fuel infrastructure drives
expanded extraction upstream. The clear
conclusion is that we simply cannot afford to
develop any new oil, gas, or coal: no new oil
and gas fields, no new coal mines, no new or
expanded oil and gas pipelines, no new LNG
terminals, no new coal-fired power plants.
Any bank supporting any company that is
expanding fossil fuels is driving climate chaos.
A number of global banks have established
policies prohibiting financing for some
companies expanding coal — joined in 2021
by La Banque Postale, Nordea Bank and
Intesa SanPaolo.
4 (Citi, the biggest coal power
banker outside China over the last six years,5
established a watered-down version of such
a policy and has yet to be joined even in that
modest step by any of its Wall Street peers.6
)
But as crucial as it is for the global economy
to exit coal, financing to coal and mining
companies represents only about 4% of the
fossil fuel lending and underwriting in the
scope of this report, while 26% went to utilities
including coal power generators — dwarfed
by the approximately 67% that went to oil
and gas (the remaining 4% went to diversified
companies that are not primarily related
to either oil and gas or coal). Furthermore,
a prohibition on corporate financing to
companies expanding fossil fuels is crucial —
even the strongest policies restricting projectspecific financing would apply to only about 5% of fossil fuel financing over the past six
years, which is simply insufficient.7
The biggest bankers of fossil fuels have instead
taken much more incremental steps, patting
themselves on the back while delaying serious
climate action. The year 2021 was the year of
net zero: 44 of the 60 banks in the scope of
this report have now committed to “net zero
emissions by 2050” — that is, to reduce the
emissions from the companies and projects
they finance, including potentially through the
use of offsets, by three decades from now.8
The
Net-Zero Banking Alliance and the umbrella
initiative Glasgow Finance Alliance for Net Zero
(GFANZ) launched in April. That was followed
by the self-congratulatory announcement
in November that the capital committed to
GFANZ had topped $130 trillion.9
While the
acknowledgement of banks’ accountability
for their climate impact is welcome, as is the
setting of their long-term direction of travel,
long-term commitments cannot serve as cover
for short-term continuation of business as
usual; if they do, they are simply greenwashing.
The “net” in net zero also threatens to entrench
a system of offsets that endangers human
rights and nature, does not reduce emissions,
and undermines and delays necessary
emissions reductions elsewhere.10
PHOTO : 1968 / shutterstock
4 BANKING ON CLIMATE CHAOS 2022
Any bank supporting
any company that is
expanding fossil fuels
is driving climate chaos.
European gas pipeline Eugal which would
carry Russian natural gas via the Nord
Stream 2 pipeline through Germany to the
Czech Republic. The operator GASCADE
Gastransport GmbH is a subsidiary of
Wintershall and Gazprom.
PHOTO : Paul Langrock / Greenpeace
BANKING ON CLIMATE CHAOS 2022 7
In May 2021, the International Energy Agency
(IEA) — whose reports banks and their fossil
fuel clients have been happy to endorse so
long as they provide cover for business as
usual — issued its first scenario setting out
what is required for alignment with net zero
by 2050. That scenario’s headline finding was
that “no new oil and gas fields are required”
in a 1.5°C scenario — on top of the fact that
new coal mines or coal mine extensions, and
new unabated coal plants, are also outside
the 1.5°C climate budget.11 Aside from La
Banque Postale, none of the banks that have
committed to net zero in the scope of this
report have ruled out financing for companies
expanding oil and gas.
In fact, the banks in the scope of this report
that have committed to net zero by 2050 —
44 out of 60 — provided $145.9 billion in
financing in 2021 for the 100 companies doing
the most to expand oil, gas, and coal.12 This
included $11.6 billion to QatarEnergy, $13
billion to Saudi Aramco, and $10 billion to
ExxonMobil.
13 Those companies are planning
the most, the third-most, and the fourth-most
upstream oil and gas expansion, respectively,
of any companies in the world, with a total of
42.7 billion barrels of oil equivalent under
development or field evaluation in 2021.14
Taken as a whole, bank fossil fuel financing
stayed flat from 2020 to 2021. As the economy
continues to emerge from the COVID-19
pandemic, there is a real danger that bank
fossil fuel financing could stay the same, or
even increase, given that most major banks do
not have policies in place to ensure that fossil
fuel financing will decline going forward.
U.S. banks continue to be the single worst
grouping of fossil banks, with the top four fossil
fuel funders in the world (JPMorgan Chase,
Citi, Wells Fargo, and Bank of America) all
headquartered in the U.S., joined by Morgan
Stanley and Goldman Sachs in the top 14.15
Together, these six banks provided 29% of
fossil fuel financing identified in 2021 — and
31% of fossil fuel financing since the Paris
Agreement, a finding that is flatly incompatible
with U.S. aspirations to be a global leader on
climate.16 Wells Fargo and JPMorgan Chase
both increased their fossil fuel financing in
2021.
Canadian banks continue to be overrepresented in the dirty dozen top fossil banks since the Paris Agreement, with
RBC, Scotiabank, and TD all in the top 12.
Remarkably, this trio, plus Bank of Montreal
and CIBC, all increased their fossil fuel
financing from 2020 to 2021.
The Trans Canada highway remains partially submerged by flood water after rainstorms lashed the western Canadian province of British Columbia, triggering landslides and floods, shutting highways, in Abbottsford, British Columbia, Canada November 19, 2021.
PHOTO : Jennifer Gauthier / Reuters
6 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 7 Japan is the other country with two banks
among the worst 12, with MUFG and Mizuho
at #6 and #8, respectively. Both increased their
fossil fuel financing in 2021 as well. Barclays
continues to be worst in the UK, at #7 globally,
and BNP Paribas is the worst in mainland
Europe, at #11.
Among spotlight subsectors, all saw slight
declines in financing from 2020 to 2021 —
with the exceptions of coal power, which stayed
roughly flat, and tar sands oil, which increased
an alarming 51%, due largely to increased
funding for producers such as Suncor Energy
and Cenovus Energy and pipeline companies
like Inter Pipeline and Enbridge.
17 RBC was the
worst banker of tar sands in 2021, and China
Merchants Bank the worst on coal power.
In 2021, fossil fuel lending and underwriting
continued to drive shocking human rights
abuses, particularly in Indigenous, Black,
and Brown communities. And communities
facing those impacts continued to resist
— from Australia’s #StopAdani movement,
to the camps opposing Enbridge’s Line 3
Pipeline in the U.S., to the growing coalition
to stop the East African Crude Oil Pipeline
across Uganda and Tanzania. A sampling
of these destructive projects and the people
fighting them are mapped on page 22; see
BankingonClimateChaos.org/case-studies to
hear directly from communities impacted by
fossil fuel financing.
We have already squandered a quarter of the
crucial decade for the climate, making the
overall goal of cutting total global carbon
emissions in half by 2030 as urgent as ever.
As the Intergovernmental Panel on Climate
Change stated in one of its latest sobering
reports, “Any further delay in concerted
anticipatory global action on adaptation and
mitigation will miss a brief and rapidly closing
window of opportunity to secure a liveable
and sustainable future for all.”18 Even so, the
fossil fuel industry has yet to bend the curve
toward anything close to that bare-minimum
half-by-2030 target. But one crucial next step
to get on the right path is clear: an immediate
end to new oil, gas, and coal. In 2022, every
bank must make ending fossil expansion an
explicit precondition for any financial support,
while also beginning to zero out financing for
the sector altogether.
Laying out the Trans Mountain oil pipeline near Hinton Alberta Canada PHOTO : Robert McGouey / Industry / Alamy Stock Photo
The GSP Saturn drilling rig, commissioned by Gazprom-Neft to drill exploratory wells to extract offshore oil in the Arctic.
PHOTO : Gleb Paikachev / Greenpeace
Demonstrators march against Enbridge’s Line 3 pipeline in Minnesota.
PHOTO : Jake Conroy / RAN
Communities across Queensland, Australia, which include the Wangan and Jagalingou people, have been resisting Adani’s Carmichael coal mine for years.
PHOTO : Stop Adani / flickr
RANK BANK
JPMORGAN CHASE
CITI
WELLS FARGO
BANK OF AMERICA
RBC
MUFG
BARCLAYS
MIZUHO
SCOTIABANK
BNP PARIBAS
TD
MORGAN STANLEY
HSBC
GOLDMAN SACHS
BANK OF MONTREAL
BANK OF CHINA
ICBC
SMBC GROUP
CREDIT SUISSE
CIBC
SOCIÉTÉ GÉNÉRALE
DEUTSCHE BANK
CRÉDIT AGRICOLE
AGRICULTURAL BANK OF CHINA
CHINA CONSTRUCTION BANK
INDUSTRIAL BANK
CHINA CITIC BANK
ING
BPCE/NATIXIS
SHANGHAI PUDONG DEVELOPMENT BANK
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
BANKING ON CLIMATE CHAOS 2022
2018
$68.264 B
$48.923 B
$61.612 B
$34.155 B
$38.564 B
$36.608 B
$26.628 B
$29.521 B
$29.014 B
$18.516 B
$25.625 B
$20.853 B
$20.868 B
$17.342 B
$21.882 B
$22.315 B
$15.023 B
$16.125 B
$16.905 B
$12.162 B
$15.240 B
$15.477 B
$13.436 B
$7.803 B
$9.200 B
$11.709 B
$10.370 B
$11.447 B
$11.644 B
$6.477 B
8 2017
$71.042 B
$47.555 B
$55.186 B
$36.415 B
$38.829 B
$26.406 B
$30.608 B
$19.803 B
$25.867 B
$18.123 B
$29.274 B
$25.282 B
$22.338 B
$19.925 B
$21.725 B
$14.000 B
$15.349 B
$12.285 B
$21.530 B
$14.493 B
$10.553 B
$19.424 B
$11.401 B
$6.158 B
$8.877 B
$8.194 B
$6.768 B
$8.350 B
$5.835 B
$5.224 B
Bank financing for approximately 2,700 subsidiaries of 1,635 parent companies active across the fossil fuel life cycle 2020 TREND
9 $51.750 B
$48.998 B
$26.639 B
$42.146 B
$19.268 B
$29.209 B
$28.022 B
$23.497 B
$16.244 B
$42.661 B
$16.989 B
$21.787 B
$24.559 B
$19.253 B
$15.078 B
$19.144 B
$25.199 B
$29.673 B
$9.831 B
$9.585 B
$19.678 B
$9.248 B
$19.529 B
$14.897 B
$12.415 B
$13.878 B
$10.279 B
$6.237 B
$6.470 B
$11.070 B
TOTAL
2016-2021
$382.403 B
$285.370 B
$271.819 B
$232.011 B
$201.229 B
$181.495 B
$166.741 B
$155.744 B
$149.344 B
$141.605 B
$140.883 B
$137.287 B
$130.468 B
$118.976 B
$117.090 B
$115.908 B
$112.764 B
$109.275 B
$91.736 B
$90.277 B
$87.427 B
$85.953 B
$75.777 B
$70.917 B
$68.675 B
$66.952 B
$60.485 B
$54.898 B
$46.257 B
$45.993 B
BANKING ON CLIMATE CHAOS 2022
2019
$64.722 B
$53.607 B
$45.360 B
$48.055 B
$35.945 B
$31.894 B
$30.602 B
$32.885 B
$27.007 B
$29.684 B
$27.465 B
$23.018 B
$26.773 B
$21.607 B
$21.858 B
$20.306 B
$19.995 B
$20.056 B
$14.338 B
$19.578 B
$14.687 B
$11.514 B
$12.159 B
$11.736 B
$13.292 B
$10.644 B
$11.877 B
$8.970 B
$7.713 B
$8.076 B
2021
$61.732 B
$41.351 B
$46.215 B
$31.978 B
$38.757 B
$31.899 B
$19.583 B
$27.713 B
$30.402 B
$14.745 B
$21.154 B
$21.423 B
$17.976 B
$17.822 B
$18.781 B
$14.375 B
$17.490 B
$19.970 B
$9.398 B
$22.218 B
$13.652 B
$9.108 B
$9.946 B
$18.207 B
$9.475 B
$14.386 B
$12.713 B
$10.753 B
$8.839 B
$9.004 B
LEAGUE TABLE - Banking on Fossil Fuels
B = BILLIONS M = MILLIONS T = TRILLIONS
2016
$64.893 B
$44.936 B
$36.808 B
$39.263 B
$29.865 B
$25.479 B
$31.298 B
$22.325 B
$20.810 B
$17.876 B
$20.376 B
$24.924 B
$17.954 B
$23.026 B
$17.766 B
$25.767 B
$19.708 B
$11.166 B
$19.734 B
$12.242 B
$13.618 B
$21.182 B
$9.306 B
$12.116 B
$15.415 B
$8.142 B
$8.480 B
$9.140 B
$5.756 B
$6.142 B
GRAND TOTAL $737.561 B $799.212 B
10 BANKING ON CLIMATE CHAOS 2022
LEAGUE TABLE - Banking on Fossil Fuels (cont'd)
31 32
33 34
35 36
37 38
39 40
41 42
43 44
45 46
47 48
49 50
51 52
53 54
55 56
57 58
59 60
TREND TOTAL
2016-2020
$829.942 B $749.913 B $741.831 B $4.582 T
BANKING ON CLIMATE CHAOS 2022 11
RANK BANK 2016 2017 2018 2019 2020 2021
$44.297 B
$42.913 B
$40.676 B
$40.057 B
$39.727 B
$39.639 B
$36.199 B
$32.029 B
$31.526 B
$28.603 B
$26.573 B
$26.273 B
$17.934 B
$17.676 B
$14.844 B
$12.904 B
$12.757 B
$12.650 B
$11.712 B
$10.469 B
$10.232 B
$7.673 B
$7.573 B
$6.677 B
$6.605 B
$5.471 B
$1.630 B
$423 M
$397 M
$229 M
$723.468 B
CHINA MERCHANTS BANK
SANTANDER
CHINA EVERBRIGHT BANK
UBS
PING AN GROUP
STANDARD CHARTERED
UNICREDIT
PNC
BANK OF COMMUNICATIONS
CHINA MINSHENG BANK
STATE BANK OF INDIA
BBVA
INTESA SANPAOLO
ANZ
NATWEST
COMMERZBANK
KB FINANCIAL
LLOYDS
POSTAL SAVINGS BANK OF CHINA
RABOBANK
NORDEA BANK
WESTPAC
COMMONWEALTH BANK
DANSKE BANK
NAB
CAIXABANK
DZ BANK
LA BANQUE POSTALE
CRÉDIT MUTUEL
SUMI TRUST
$9.228 B
$6.512 B
$5.425 B
$7.806 B
$2.950 B
$2.674 B
$6.049 B
$2.652 B
$4.344 B
$1.856 B
$6.326 B
$4.640 B
$4.320 B
$3.227 B
$3.557 B
$995 M
$2.566 B
$2.641 B
$165 M
$2.207 B
$2.691 B
$803 M
$1.304 B
$1.114 B
$998 M
$584 M
$259 M
$18 M
$18 M
$29 M
$3.662 B
$4.994 B
$4.423 B
$9.095 B
$4.842 B
$5.197 B
$6.700 B
$4.713 B
$3.045 B
$978 M
$7.347 B
$3.439 B
$1.994 B
$2.679 B
$2.696 B
$2.655 B
$1.089 B
$2.446 B
$1.007 B
$1.644 B
$1.836 B
$1.305 B
$650 M
$711 M
$538 M
$722 M
$299 M
-
$35 M
-
$7.758 B
$4.856 B
$4.184 B
$11.000 B
$8.015 B
$10.070 B
$4.921 B
$7.546 B
$4.659 B
$2.811 B
$739 M
$4.866 B
$4.450 B
$4.033 B
$3.299 B
$2.483 B
$5.277 B
$2.431 B
$1.671 B
$1.808 B
$1.177 B
$1.136 B
$1.887 B
$1.256 B
$1.301 B
$1.276 B
$374 M
$23 M
$197 M
-
$5.802 B
$8.483 B
$4.792 B
$6.305 B
$5.448 B
$8.316 B
$5.430 B
$5.688 B
$4.265 B
$10.302 B
$6.223 B
$4.876 B
$1.596 B
$3.167 B
$1.473 B
$3.533 B
$1.302 B
$1.523 B
$2.912 B
$1.842 B
$2.063 B
$2.959 B
$950 M
$1.697 B
$1.345 B
$1.774 B
$285 M
$34 M
$134 M
-
$7.201 B
$10.147 B
$11.533 B
$2.257 B
$8.468 B
$7.094 B
$8.356 B
$4.523 B
$6.603 B
$10.659 B
$2.135 B
$4.901 B
$1.879 B
$3.090 B
$1.984 B
$2.120 B
$1.783 B
$2.300 B
$2.158 B
$873 M
$1.444 B
$788 M
$1.723 B
$799 M
$649 M
$575 M
$355 M
$82 M
-
$200 M
$10.645 B
$7.920 B
$10.320 B
$3.595 B
$10.004 B
$6.288 B
$4.742 B
$6.908 B
$8.611 B
$1.997 B
$3.605 B
$3.550 B
$3.695 B
$1.480 B
$1.835 B
$1.119 B
$739 M
$1.309 B
$3.799 B
$2.094 B
$1.019 B
$683 M
$1.059 B
$1.099 B
$1.774 B
$541 M
$57 M
$267 M
$14 M
-
B = BILLIONS M = MILLIONS T = TRILLIONS
12 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 13 This report shows that JPMorgan Chase continues to be the world’s worst banker of fossil fuels. This has been true every year since the Paris Agreement, as shown on pages 8-9.
THE DIRTY DOZEN
Twenty-six banks trended in the wrong direction last year, increasing their financing of fossil fuels, with Wells Fargo and RBC being the worst culprits.
Fossil fuel financing plateaued last year, yet with levels still higher than in 2016. During this crucial decade for action, when we need the financial sector to rapidly reduce its support for fossil fuels, the overall linear financing trend since Paris is still headed upward.
KEY FINDINGS
In the six years since the
adoption of the Paris Agreement,
the world’s 60 largest private sector banks
financed fossil fuels
with USD $4.6 trillion.
2016 2017 2018 2019 2020
$0 B
$100 B
$200 B
$300 B
$400 B
$500 B
$600 B
$700 B
$800 B
$900 B
Linear Trendline
2021
$723 B $738 B
$799 B $830 B $750 B $742 B
GLOBAL FOSSIL FUEL FINANCING 2016-2021 (BILLIONS USD)
JPMORGAN CHASE
CITI
WELLS FARGO
BANK OF AMERICA
RBC
MUFG
BARCLAYS
MIZUHO
SCOTIABANK
BNP PARIBAS
TD
MORGAN STANLEY
#1
#2
#3
#4
#5
#6
#7
#8
#9
#10
#11
#12
$0 B $100 B $200 B $300 B $400 B
$382 B
$285 B
$272 B
$232 B
$201 B
$181 B
$167 B
$156 B
$149 B
$142 B
$141 B
$137 B
JPMorgan Chase
leads by 34%
WELLS FARGO
RBC
SCOTIABANK
CIBC
JPMORGAN CHASE
ING
MIZUHO
TD
BANK OF MONTREAL
AGRICULTURAL BANK OF CHINA
CHINA MERCHANTS BANK
MUFG
$0 B $5 B $10 B $15 B $20 B
$20 B MORE THAN 2020
$19 B MORE
$14 B MORE
$13 B MORE
$10 B MORE
$5 B MORE
$4 B MORE
$4 B MORE
$4 B MORE
$3 B MORE
$3 B
$3 B
BIGGEST FINANCING INCREASES 2020-2021 (BILLIONS USD)
FOSSIL FUEL FINANCING 2016-2021 (BILLIONS USD)
GLOBAL BANKS ARE DRIVING
OIL & GAS EXPANSION
As the IEA underlined last year, net zero by 2050 — which 44 out of the 60 banks in the scope of this report have committed to — requires “no new oil and gas fields.”19 But global banks have massively supported the companies doing the most to open new oil and gas fields. The new Global Oil and Gas Exit List offers the first comprehensive comparison of companies’ upstream oil and gas expansion plans, including two key metrics: (1) resources under development/field evaluation and (2) capital expenditure (CapEx) on exploration for new reserves.20 Upstream oil and gas expansion is remarkably concentrated: the top 20 companies are responsible for more than half of resource development and more than half of exploration CapEx.
Bank support for those companies is also remarkably concentrated: the top 10 bankers of those top 20 companies are responsible for 63% of the companies’ big-bank financing since Paris. Each of those top ten bankers is formally committed to net zero by 2050.
Width of each ribbon represents the fossil fuel financing amount from a bank to a client and relevant subsidiaries from 2016–2021.21 Only 16 of the 20 companies appear on the diagram because the remaining four did not receive financing led by these 10 banks over the time period in question.
An interactive graph with all financing amounts is available at BankingonClimateChaos.org. Resource development and CapEx figures sourced from the Global Oil and Gas Exit List.22
QATARENERGY
GAZPROM
SAUDI ARAMCO
EXXONMOBIL
PETRÓLEO BRASILEIRO
(PETROBRAS)
TOTALENERGIES
CHEVRON
SHELL
BP
ABU DHABI NATIONAL
OIL CO.
EQUINOR
CHINA NATIONAL
OFFSHORE OIL CO.
EQT CORP.
PETRÓLEOS MEXICANOS
(PEMEX)
PIONEER NATURAL
RESOURCES
DIAMONDBACK ENERGY
TÜRKMENGAZ
NATIONAL IRANIAN OIL
CO.
PETROCHINA**
CHINA PETROLEUM
& CHEMICAL CORP.
(SINOPEC)
Qatar
Russia
Saudi Arabia
U.S.
Brazil
France
U.S.
U.K.
U.K.
United Arab Emirates
Norway
China
U.S.
Mexico
U.S.
U.S.
Turkmenistan
Iran
China
China
20.1 B
16.7 B
15.2 B
7.4 B
7.2 B
4.3 B
4.0 B
3.8 B
3.2 B
2.9 B
2.7 B
2.6 B
2.4 B
0.4 B
0.8 B
0.6 B
5.4 B
2.9 B
1.6 B
0.7 B
COMPANY HEADQUARTERS
EXPLORATION CAPEX 3-YEAR
AVERAGE 2019-2021
(M=MILLIONS USD)
* BOE - Barrels of Oil Equivalent
** Subsidiary of China National
Petroleum Corp.
RESOURCES UNDER
DEVELOPMENT / FIELD
EVALUATION 2021
(B=BILLIONS BOE*)
14 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 15 $172 M
$1,174 M
$1,881 M
$1,616 M
$372 M
$837 M
$942 M
$2,437 M
$939 M
$43 M
$1,168 M
$2,827 M
$26 M
$1,912 M
$1,227 M
$1,058 M
-
$21 M
$5,987 M
$2,291 M
TOTAL
$26.9 BILLION USD
= 52% OF TOTAL GLOBAL
EXPLORATION CAPEX
105 BILLION BOE
= 55% OF TOTAL GLOBAL OIL AND
GAS RESOURCE DEVELOPMENT
JPMORGAN CHASE
CITI
BANK OF AMERICA
BNP PARIBAS
HSBC
BARCLAYS
MORGAN STANLEY
GOLDMAN SACHS
CRÉDIT AGRICOLE
SOCIÉTÉ GÉNÉRALE
IMAGE : Highcharts.com
QATARENERGY
GAZPROM
SAUDI ARAMCO
EXXONMOBIL
PETRÓLEO BRASILEIRO (PETROBRAS)
TOTALENERGIES
CHEVRON
SHELL
BP
ABU DHABI NATIONAL OIL CO.
EQUINOR
CHINA NATIONAL OFFSHORE OIL CO.
EQT CORP.
PETRÓLEOS MEXICANOS (PEMEX)
PIONEER NATURAL RESOURCES
DIAMONDBACK ENERGY
BANKING ON CLIMATE CHAOS 2022 17
JUNE
Banks underwrite $2 billion in bonds to BP, including:
Bank of America Morgan Stanley
Citi Société Générale
Mizuho Wells Fargo
JUNE
Banks underwrite $12.5 billion in corporate bonds to
QatarEnergy, including:
Bank of America Goldman Sachs
Citi HSBC
Credit Suisse JPMorgan Chase
Deutsche Bank MUFG
JUNE - JULY
Banks underwrite $1.5 billion in corporate bonds to
Gazprom, including:
Credit Suisse UBS
JPMorgan Chase
AUGUST
Banks lend $10 billion to ExxonMobil, including:
Bank of America JPMorgan Chase
Barclays Mizuho
Citi Morgan Stanley
Deutsche Bank Société Générale
HSBC
SEPTEMBER
Banks underwrite $2.4 billion in corporate bonds to BP, including:
Barclays Lloyds
BNP Paribas Morgan Stanley
Commerzbank Santander
Goldman Sachs SMBC Group
HSBC Standard Chartered
JPMorgan Chase TD
Clearly, there is still a disconnect between net-zero aspirations and current practices. Out of the 44 banks in this report currently committed to net zero by 2050, 27 still lack a meaningful corporate-level no-expansion policy for any part of the fossil fuel industry.31
OCTOBER
The Net-Zero Banking Alliance grows to include 94 institutions, including every bank listed in this timeline29
OCTOBER - NOVEMBER
The UN Climate Change Conference, COP26, is held in
Glasgow with a significant focus on the role of financial institutions30
NOVEMBER
Banks underwrite $580 million in corporate bonds to Gazprom, including:
JPMorgan Chase UniCredit
Mizuho
NOVEMBER
Banks underwrite $1.5 billion in corporate bonds to Shell, including:
Barclays RBC
Citi SMBC Group
Mizuho
In 2021, the year of “net zero by 2050” pledges, banks prematurely patted themselves on the back for adopting financed emissions targets a generation away while delaying serious climate action now. This timeline lays out how banks with net-zero commitments last year also financed the top 20 upstream oil and gas expansion companies, potentially helping to lock the planet into decades of climate-warming emissions.
Of the 60 banks in the scope of this report, 28 led financing for the top 20 upstream oil and gas expansion companies in 2021, as detailed in this timeline. By April 2021, 20 of them had committed to net zero by 2050 individually, joined the Net-Zero Banking Alliance as a founding member at its launch on 21 April 2021, or both.23 MUFG committed to net zero by 2050 in May and Crédit Agricole joined the NZBA in June.24 CIBC and SMBC committed to net zero by 2050 in August.25 Intesa Sanpaolo, JPMorgan Chase, RBC and UniCredit joined the NZBA in October.26
Transaction data sourced from Bloomberg Finance L.P.
2021: A YEAR OF HYPOCRISY
16 BANKING ON CLIMATE CHAOS 2022
JANUARY-FEBRUARY
Banks underwrite $3.2 billion in corporate bonds to
Gazprom, including:
Intesa Sanpaolo SMBC Group
JPMorgan Chase
FEBRUARY
Banks underwrite $2 billion in corporate bonds to BP, including:
Citi JPMorgan Chase
Deutsche Bank Morgan Stanley
Goldman Sachs NatWest
APRIL
An initial group of banks sign on to the launch of the Net-Zero Banking Alliance, committing to transition all portfolios to “align with pathways to net-zero by 2050 or sooner”27 MAY
Banks underwrite $1.2 billion in corporate bonds and
a $445 million equity issuance to Abu Dhabi National
Oil Co., both led by:
Citi
MAY
The International Energy Agency releases a report
outlining a comprehensive energy pathway toward
global net-zero emissions by 2050, in which there are
“no new oil and gas fields approved for development”28
MAY
Banks lend $6 billion to Equinor, including:
Bank of America JPMorgan Chase
Barclays Mizuho
BNP Paribas Morgan Stanley
CIBC MUFG
Citi Nordea Bank
Crédit Agricole Santander
Deutsche Bank Société Générale
Goldman Sachs Standard Chartered
MAY
Banks lend $10 billion to Saudi Aramco, including:
BNP Paribas Mizuho
Citi MUFG
Crédit Agricole SMBC Group
HSBC Société Générale
JPMorgan Chase
While most banks in this report have at least some policy language addressing fossil fuel finance, too much of the focus is still on project-specific finance, and/or only on coal.
BANK POLICIES ARE NOT ADDRESSING
THE PROBLEM
40 banks have some restriction on financing oil and gas …while only 5 explicitly mention oil and gas companies
with expansion plans — despite the IEA clearly stating that there is no room for investments in new oil and gas in a 1.5°C scenario32
38 banks apply restrictions to some oil and gas projects …while only 23 oil and gas policies include company-level restrictions (and most are very limited)
Existing policies focus on unconventional oil and gas
» Arctic: 39 banks
» Tar sands: 25 banks
» Fracking: 21 banks
…while only 9 have a policy addressing conventional oil and/or gas
…while close to none of these policies effectively protect financing oil and gas in the Arctic, given corporate
financing and geographic loopholes
Regarding oil and gas, out of the 60 largest banks…33
48 banks have some exclusion on financing coal projects …while only 17 explicitly exclude some coal developers, without a loophole for their existing clients
…while only 34 have at least a minimal company-level
exclusion or phase-out policy for coal
Regarding coal, out of the 60 largest banks…34
18 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 19 As shown below, the majority of fossil fuel financing since 2016 has been to oil and gas companies, and the vast majority was not project-specific financing. This points to a huge mismatch between where banks have focused their policies and where money is actually flowing.
FOSSIL FUEL FINANCING BY SECTOR AND USE OF PROCEEDS, 2016-202135 100%
80%
60%
40%
20%
0%
Fossil Fuel Financing for Oil &
Gas Companies (67%)
Fossil Fuel Financing for
Utility Companies (26%)
Fossil Fuel Financing for Coal
& Mining Companies (4%)
Fossil Fuel Financing for Diversified
Companies in Other Sectors (4%)
No Listed Use of Proceeds (4%)
Project-Related Finance (5%)
Not Project-Related (91%)
FOSSIL FUEL FINANCING BY ASSET CLASS, 2016-2021
Underwriting (51%)
Lending (49%)
The majority of bank fossil fuel
financing over the last six years
came in the form of bond and equity
underwriting, as opposed to lending.
This points to a massive loophole for
any bank policy that applies to only
the bank’s loan book.
LEADERS SETTING THE EXAMPLE ON NO
FOSSIL FUEL EXPANSION
20 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 21 BANKS’ TOP FOSSIL FUEL CLIENTS ARE SABOTAGING THE FUTURE 1 2
3 4
5 6
7 8
9 10
ENBRIDGE
EXXONMOBIL
SAUDI ARAMCO
BP
TC ENERGY
OCCIDENTAL PETROLEUM
SHELL
CHINA NATIONAL PETROLEUM CORP.
SHANXI STATE-OWNED CAPITAL
INVESTMENT OPERATION CO.
SEMPRA ENERGY
$98 B
$87 B
$78 B
$78 B
$77 B
$66 B
$66 B
$64 B
$61 B
$61 B
1. TD ($17 B)
2. Scotiabank ($13 B)
3. Bank of Montreal ($12 B)
1. Bank of America ($15 B)
2. JPMorgan Chase ($15 B)
3. Citi ($15 B)
1. Citi ($9 B)
2. HSBC ($8 B)
3. JPMorgan Chase ($8 B)
1. BNP Paribas ($15 B)
2. Bank of America ($6 B)
3. Citi ($5 B)
1. Bank of Montreal ($23 B)
2. JPMorgan Chase ($23 B)
3. TD ($6 B)
1. Bank of America ($12 B)
2. Citi ($11B)
3. JPMorgan Chase ($8 B)
1. BNP Paribas ($8 B)
2. Morgan Stanley ($7 B)
3. Barclays ($7 B)
1. ICBC ($16 B)
2. China Minsheng Bank ($14 B)
3. Bank of China ($10 B)
1. Industrial Bank ($12 B)
2. China Everbright Bank ($9 B)
3. China Construction Bank ($7 B)
1. Barclays ($7 B)
2. RBC ($7 B)
3. Citi ($7 B)
RANK COMPANY TOP BANKERS
* FOSSIL FUEL FINANCING FROM 60 BANKS TO THE NAMED COMPANY AND ALL RELEVANT SUBSIDIARIES, 2016–21 (B = BILLIONS USD)
FOSSIL FUEL
FINANCING *
Twelve banks still have no fossil fuel financing exclusion policy strong enough to merit any points in our evaluation,39 including 10 of the 13 Chinese banks in the report:
EXTREME LAGGARDS
CIBC (Canada)
State Bank of India
Agricultural Bank
of China
Bank of Communications
China Construction Bank
China Everbright
China Merchants Bank
China Minsheng
CITIC ICBC
Industrial Bank
Shanghai Pudong
Development Bank
France’s La Banque Postale announced in 2021 a groundbreaking policy that suspends support for all companies expanding oil and gas and commits the bank to exit oil and gas financing entirely by 2030.
36 This policy sets a new bar that every major
bank must meet in this crucial decade for the climate. The bank’s coal policy is also sufficiently robust.37
Crédit Mutuel also adopted a policy excluding financing for coal mine, plant, and infrastructure developers, but has yet to fully exclude oil and gas expansion companies.38
Banks justify business-as-usual financing to their fossil fuel clients by assuring the public that those clients are transitioning, and banks are working with them to transition. But global banks’ top fossil fuel clients amount to a rogues’ gallery of bad actors.
Enbridge, the #1 fossil fuel
client of big banks since Paris,
is behind the Line 3 and Line
5 pipelines, which violate
Indigenous rights and jeopardize
our shared climate by expanding
access to tar sands oil.40
ExxonMobil is still planning
massive expansion of fossil
fuel extraction: oil wells
offshore of Guyana, fracking
in the southwestern U.S., and
elsewhere.41
TC Energy is behind the
destructive, rights-violating
Coastal GasLink pipeline,
without the consent of
Wet’suwet’en hereditary chiefs to
build on their land.42
22 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 23
CASE STUDIES
Bank funding for fossil fuels often brings dire threats to the lives and livelihoods of local communities
around the world — harming Indigenous Peoples,
Black and Brown communities, and poor and
working-class communities first and worst —
alongside fueling climate chaos. This map illustrates
some of the projects that put the health and safety of
local communities at risk, noting the top companies
and just a few of the banks in this report’s scope that are supporting each destructive project.
» To learn more about these case studies directly
from the impacted communities, visit
BankingonClimateChaos.org/case-studies.
Fracking in Vaca Muerta
KEY BANKS: Credit Suisse, Citi,
JPMorgan Chase
KEY COMPANIES: YPF, Tecpetrol
International, Pampa Energia
Payra Port Coal
Terminal
KEY BANKS: HSBC
KEY COMPANIES: Payra Port
Authority, Jan De Nul
Carmichael Coal
Project
KEY BANKS: Deutsche Bank,
Standard Chartered, JPMorgan
Chase
KEY COMPANIES: Adani
Offshore Cape Three
Points
KEY BANKS: HSBC, Société
Générale, Standard Chartered
KEY COMPANIES: Eni, Vitol, GNPC
Drilling Offshore
Guyana
KEY BANKS: JPMorgan Chase, Citi,
Bank of America
KEY COMPANIES: ExxonMobil,
CNOOC, Hess Bengkulu Coal Plant
KEY BANKS: ICBC
KEY COMPANIES: Power China, PT
Intraco Penta
Amazon Oil
KEY BANKS: Citi, JPMorgan Chase,
Santander
KEY COMPANIES: Ecopetrol,
Petróleos del Perú, PetroEcuador,
Petrobras
Jawa 9 and 10 Coal
Plants
KEY BANKS: Bank of China
KEY COMPANIES: KEPCO, Barito
Pacific, PT PLN (Persero)
Energía Costa Azul
LNG
KEY BANKS: BBVA, BPCE/Natixis,
Scotiabank
KEY COMPANIES: Sempra Energy
Nigeria LNG Train 7
KEY BANKS: SMBC Group, DZ Bank,
Société Générale
KEY COMPANIES: Nigerian
National Petroleum Corp., Shell,
TotalEnergies, Eni
Mozambique LNG
KEY BANKS: Mizuho, SMBC Group,
Standard Chartered
KEY COMPANIES: TotalEnergies,
Mitsui, ENH
Offshore Drilling in
the Barents Sea
KEY BANKS: JPMorgan Chase, Bank
of America, Barclays
KEY COMPANIES: Equinor
Thar Block-I Coal
Plant
KEY BANKS: ICBC
KEY COMPANIES: Sino Sindh
Resources
Trans Adriatic
Pipeline
KEY BANKS: Intesa Sanpaolo,
UniCredit, ING
KEY COMPANIES: BP, SOCAR,
Snam
Emba Hunutlu Coal
Plant
KEY BANKS: ICBC, Bank of China
KEY COMPANIES: Shanghai Electric
Power Co., Avic-International Project
Engineering Co.
East African Crude Oil
Pipeline
KEY BANKS: ICBC, SMBC Group
KEY COMPANIES: TotalEnergies,
CNOOC
Arctic National
Wildlife Refuge
KEY BANKS: N/A; BNP Paribas,
JPMorgan Chase, UniCredit are
largest bankers of sector overall
KEY COMPANIES: Alaska Industrial
Development & Export Authority,
Regenerate Alaska, Knik Arm
Services
Line 3 Pipeline
KEY BANKS: TD, Scotiabank, Bank
of Montreal
KEY COMPANIES: Enbridge
Rio Grande LNG
KEY BANKS: Société Générale
KEY COMPANIES: NextDecade Nghi Son 2 Coal Plant
KEY BANKS: Mizuho, MUFG,
SMBC Group
KEY COMPANIES: Marubeni
Corporation, KEPCO, Tohoku Electric
Power Co.
Vung Ang II Coal Plant
KEY BANKS: MUFG, Mizuho,
SMBC Group
KEY COMPANIES: Mitsubishi Corp.,
Chugoku Electric Power Co., KEPCO
Coastal GasLink
Pipeline
KEY BANKS: RBC, TD, Bank of
America
KEY COMPANIES: TC Energy,
KKR, AIMCo
Trans Mountain
Pipeline Expansion
KEY BANKS: Bank of Montreal, TD
KEY COMPANIES: Trans Mountain
Corp.
Hambach Coal Mine
KEY BANKS: Barclays, Bank of
America, Goldman Sachs
KEY COMPANIES: RWE
Tanjung Jati-B 2 Coal
Plant
KEY BANKS: SMBC Group, MUFG,
Mizuho
KEY COMPANIES: KEPCO,
Sumitomo Corp., PT United Tractors
Cirebon 2 Coal Plant
KEY BANKS: MUFG, Mizuho,
SMBC Group
KEY COMPANIES: Marubeni,
Samtan, IMECO
Plaquemines LNG
KEY BANKS: Goldman Sachs,
Mizuho, Scotiabank
KEY COMPANIES: Venture
Global LNG
Mountain Valley
Pipeline
KEY BANKS: JPMorgan Chase, Wells
Fargo, Bank of America
KEY COMPANIES: EQM Midstream
Partners, NextEra Energy Resources,
Con Edison Transmission, WGL
Midstream
TAR SANDS OIL ARCTIC OIL & GAS OFFSHORE
OIL & GAS
LIQUEFIED
NATURAL GAS COAL MINING COAL POWER
FRACKED
OIL & GAS
FOSSIL FUEL
EXPANSION
BANKING INDUSTRY SCOPE
This year’s report again analyzes the world’s 60 largest relevant banks by assets. Due to year-on-year changes in bank sizes, 56 of these banks were included in last year’s report, while four are new. See page 66 for details of all banks included, as well as which banks didn’t make the cutoff this year.
FOSSIL INDUSTRY SCOPE
Each of this report’s nine league tables looks at bank financing for a different slice of the fossil fuel industry, as follows. 24 BANKING ON CLIMATE CHAOS 2022
ALL FOSSIL FUELS
Scope: Approximately 2,700 subsidiaries of 1,635 parent companies that received financing led by one of the 60 banks analyzed and that are involved in the extraction, transportation, transmission, combustion, trade, or storage of any fossil fuels or fossil-based electricity, globally, according to the Bloomberg Industry Classification Standard; or are on the Global Coal Exit List; or are on the Global Oil & Gas Exit List; or are in the scope of any of the other tables in the report, as described below Source: Bloomberg Finance L.P.,43 urgewald e.V.,44 and Rystad Energy AS provided by Oil Change International45
METHODOLOGY
BANKING ON CLIMATE CHAOS 2022 25
FOSSIL FUEL EXPANSION
Scope: 100 top companies expanding fossil fuels46
Upstream Oil and Gas: Top 54 companies by resources under development or field evaluation in 2021 (hereafter referred to as short-term expansion) and top 30 companies by exploration capital expenditure three-year average, totaling 60 companies due to overlap — these 60 companies are responsible for 76% of global short-term oil and gas expansion and 72% of capital expenditure on oil and gas exploration
Source: Global Oil & Gas Exit List compiled by urgewald e.V.47 Midstream Oil and Gas: Top 13 companies by LNG capacity proposed or under construction and top 14 companies by pipeline miles proposed or under construction, totaling 25 additional companies due to overlap — 10 of these 25 companies are among the 60 top upstream oil and gas expansion companies
Source: Global Oil & Gas Exit List compiled by urgewald e.V.48 Coal: Top 11 coal mining expansion companies and top 16 companies proposing new coal power plants, totaling 25 companies due to overlap
Source: Global Coal Exit List compiled by urgewald e.V.49
TAR SANDS OIL
Scope: Top 30 companies by tar sands production in 2020 plus short-term expansion, and the six companies with existing or proposed pipelines to carry tar sands oil out of Alberta in the past six years Source: Global Oil & Gas Exit List compiled by urgewald e.V.50 and Oil Sands Magazine51
ARCTIC OIL AND GAS
Scope: Top 30 companies by Arctic oil and gas production52 in 2020 plus short-term expansion Source: Global Oil & Gas Exit List compiled by urgewald e.V.53
OFFSHORE OIL AND GAS
Scope: Top 30 companies by offshore oil and gas production in 2020 plus short-term expansion Source: Rystad Energy AS provided by Oil Change International54
FRACKED OIL AND GAS
Scope: Top 30 companies by fracked oil and gas production in 2020 plus short-term expansion and 10 key fracked oil and gas pipeline companies
Source: Global Oil & Gas Exit List compiled by urgewald e.V.55
LIQUEFIED NATURAL GAS (LNG)
Scope: Top 30 companies by attributable capacity in current and planned LNG import or export terminals worldwide Source: Global Energy Monitor56
COAL MINING
Scope: Top 30 companies by annual coal production plus coal mining capacity expansion plans Source: Global Coal Exit List compiled by urgewald e.V.57
COAL POWER
Scope: Top 30 companies by installed plus planned coal power capacity Source: Global Coal Exit List compiled by urgewald e.V.58 This report is the 13th annual in a series of reports analyzing bank financing for fossil fuels. As in the 2021 version, this report assesses private bank financing for the fossil fuel sector as a whole as well as for top expanders of the fossil fuel industry. In addition, the report highlights bank support for and policies regarding certain “spotlight fossil fuels”: tar sands oil, Arctic oil and gas, offshore oil and gas, fracked oil and gas, LNG, coal mining, and coal-fired power. These fossil fuels are spotlighted due to their high environmental, social, and climate impacts and/or their heightened risk of becoming stranded assets. Of course, these are far from being the only problematic sectors funded by big banks, many of whom continue to support other particularly problematic areas of the fossil fuel sector such as oil development in the Amazon, as well as other controversial industries such as large hydropower projects, conflict palm oil and other deforestation-risk commodities, private prisons and immigration detention centers, and more.
26 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 27 Construction of the Trans Mountain oil pipeline through the rocky mountains near Hinton Alberta Canada.
PHOTO : Robert McGouey / Industry / Alamy Stock Photo
CALCULATING FINANCE FLOWS
For the companies included in this analysis, we assessed each bank’s leading involvement in corporate lending and underwriting transactions — including project finance where data were available — between January 1, 2016, and December 31, 2021, inclusive. All amounts in this report are expressed in U.S. dollars unless otherwise indicated. Transaction data were primarily sourced from Bloomberg Finance L.P., in which case the value of a transaction is split between leading banks according to Bloomberg’s league credit methodology.59 This methodology assigns banks league credit when financing is initially issued or renewed, provided the event meets certain criteria. Additional project finance transactions in the LNG and coal power sectors were researched using the IJGlobal database, in which case all involved banks received credit for their participation in a deal.60 All deals marked as green bonds or loans were removed from the dataset.
Each transaction was weighted based on the proportion of the borrower or issuer’s operations devoted to the sector in question:
» For the league tables measuring financing for all fossil fuels, and the top fossil fuel expanders, transactions were adjusted based on each company’s overall fossil fuel–based assets or revenue.61 » For the upstream oil and gas sectors, taking into account information from the recently published Global Oil & Gas Exit List, transactions were adjusted based on a company’s production in the particular sector out of its total oil and gas production in a given year (whereas previous editions of this report adjusted these transactions based on a company’s sector reserves).62
» For the key pipeline companies included in the tar sands and fracked oil and gas sectors, adjusters were based on the estimated proportion of pipeline capacity transporting tar sands or shale oil and gas, respectively. » For LNG and coal mining, transactions were adjusted based on a company’s total LNG-related or coal assets as a percentage of the company’s total assets.
» For coal power, transactions were adjusted based on a company’s share of coal in its generation capacity.63 » For more detailed methodology and frequently asked questions, visit: BankingonClimateChaos.org
INDIGENOUS RESISTANCE:
AS URGENT AS EVER
PHOTO : Jake Conroy / RAN
The conclusion of the delayed UN Climate Change Conference, COP26, at the end of 2021 marked yet another missed opportunity for making the changes we need — underlining the continued urgency of ongoing resistance to fossil fuels led by Indigenous and other frontline communities, and the need for global solidarity.
More Business-as-Usual at COP26
At the midpoint of COP26 in Glasgow, the Climate Action Tracker published its sobering assessment of the summit’s results. It found that even if all mitigation pledges for countries’ nationally determined contributions (NDCs) were fully implemented, the results would still be catastrophic, bringing global warming to 2.4°C by the end of the century.64 In fact, greenhouse gas emissions have been on the rise since the Paris Agreement was signed — with a brief exception at the onset of the COVID-19 pandemic in 202065 — and are on track to be higher in 2030 than they are now if countries do not strengthen their current implemented climate policies.66
The Intergovernmental Panel on Climate Change (IPCC) has made clear that the 1.5°C warming threshold could be breached in the early 2030s, which makes the next eight years critical for emissions reductions.67
Meanwhile, the agreement coming out of COP26 saw the first explicit fossil fuel mention get watered down in the final hours of negotiation.
In the end, parties agreed to “phase down” rather than “phase out” unabated coal use, while oil and gas were not mentioned at all.68 For many parties, a key objective of COP26 was to agree on implementation rules for Article 6 of the Paris Agreement and, specifically, to establish market approaches for countries to use to comply with their NDCs.69 However, existing compliance and voluntary carbon markets and credits have largely failed to ensure any real, additional emissions reductions of anthropogenic greenhouse gasses, and risk allowing the continued growth of emissions that accelerate global warming.70 The fossil fuel industry lobbied hard for this approach to emissions “reductions,” with companies like Shell reportedly taking credit for helping to author Article 6.71
Not only have the various carbon market mechanisms developed over the years largely failed to demonstrate emissions reductions, they have also often been associated with land grabbing and other rights violations.72 At COP26, many parties were eager to discuss ways to further kick the can of cutting emissions down the road, such as the agreement that the U.S. and China made in November 2021 to cooperate on “deployment and application of technology such as Carbon Capture Utilization and Storage (CCUS) and direct air capture of greenhouse gasses.” As a study published by the Heinrich Böll Foundation warns,
So far, however, none of these technologies have been
implemented on a larger scale, and it cannot be predicted whether they will ever be able to function effectively, especially at a large scale. As “technological fixes,” they also harbour the danger of extending the lifetime of the fossil fuel industry — which would explain its interest in such technologies — and minimizing the acute need for action. Moreover, these technologies bring considerable risks and side effects for humans and ecosystems.73
The fossil fuel industry is and has been busy greenwashing itself inside and outside the UN climate negotiations, primarily through hyping the need for fossil fuels — even though renewables provide cheaper, safer energy access to communities that lack electricity74 — and appealing to the public with propositions primarily based on carbon credits and offsets. These appeals often boil down to, “Give us money and we’ll plant a tree to cover your carbon footprint.”75
28 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 29 Indigenous resistance to colonialism
is based on the responsibility to defend
their lands and sovereignty, and by so
doing, defend the Earth itself.
Indigenous Rights and Resistance
For millennia, Indigenous Peoples have resisted unwanted development.
More recently, they have led global resistance to the fossil fuel industry, from exploration to combustion. Indigenous Peoples have led a constant and persistent resistance to colonialist expansion and the notion of development that says “natural resources” are to be consumed until they are all gone.
In late 2021, Indigenous Environmental Network and Oil Change International published Indigenous Resistance Against Carbon, a report examining 26 cases of Indigenous resistance to the fossil fuel industry that led to quantifiable and large reductions of greenhouse gas emissions.76 The report finds that Indigenous communities on Turtle Island (North America) have opposed 1.8 billion metric tons of carbon dioxide equivalent, which is about 28% of pollution from the U.S. and Canada in 2019. Victories against fossil fuel infrastructure have blocked an amount equal to 12% of U.S. and Canadian pollution, or 779 million metric tons of carbon dioxide equivalent.77
As reflected in that report, for Indigenous Peoples, “natural resources” do not exist simply to be consumed; rather, they are a part of Indigenous Peoples’ relationship to their lands. This relationship includes Indigenous rights and their responsibilities to the Earth. Indigenous resistance is based on hundreds of years of resistance to colonization, the preservation of their sovereign rights as peoples, their right of selfdetermination, and their right to say “no” — no to unwanted, unfettered ruination of not only their lands but also their cultures, languages, food sovereignty and security, as well as their cosmovision and spiritual lives. The collective and recognized right of all Peoples, including Indigenous Peoples, to self-determination includes, among others, the right to establish their own political status, the right to freely pursue their economic, social, and cultural development, and the right to not be deprived of their means of subsistence.78
Key to these rights is the right of Free, Prior, and Informed Consent. This right of Indigenous Peoples encompasses the right to full and effective participation in all matters that affect them; the right to their lands, territories, and resources; and the right to give or withhold consent for project development. Fundamentally, the right to their lands also reflects the right to their languages, cultures, traditions, and traditional knowledge, as these arise from their connection to the land and cannot be exercised without this fundamental relationship. The Earth teaches and guides the people, and with that knowledge language develops to describe and transmit that relationship to future generations.
Settler colonial states and their successors, until the recent past, labeled Indigenous Peoples as savages and heathens, to be wiped off the face of the Earth. These past crimes of genocide and ecocide are still in the memory of Indigenous Peoples. More recently, successor neocolonialists give lip service to the rights of Indigenous Peoples but continue to dishonor their treaties and rights to self-determination and Free, Prior, and Informed Consent, thus denying Indigenous Peoples sovereignty over their lands.79
Indigenous resistance to colonialism is based on the responsibility to defend their lands and sovereignty, and by so doing, defend the Earth itself. It is their obligation to the Earth and all future generations.
Across Turtle Island, Indigenous ceremony, song, traditions, and cultural practices preserve the primordial relationship to the land and lend strength to resistance to colonialism in all its forms.
And as shown in the Indigenous Resistance Against Carbon report, this resistance in fact contributes to the struggle against global warming.
If ongoing struggles prove successful, Indigenous communities in strenuous opposition to the fossil fuel industry could end up preventing carbon emissions on Turtle Island by an amount equal to one-quarter of total combined greenhouse gas pollution from the United States and Canada.80 In 2020, Indigenous women with Divest Invest Protect, Indigenous Peoples Law and Policy Program, and Women’s Earth and Climate Action Network filed a claim with the OECD regarding harmful impacts to Indigenous Peoples resulting from Credit Suisse’s financing of the U.S.-based company Energy Transfer.
81 And of course,
this resistance is not limited to Turtle Island — for instance, Indigenous leaders in the Amazon and their global allies are calling on banks to exit Amazon oil, by committing to end financing and investment for any oil and gas activity in the Amazon biome.82
The Indigenous cosmovision holds that all life is related, and that Mother Earth is the only home we have. The notion that we are related to all the creatures that fly, swim, walk, or crawl is no longer the belief of just Indigenous Peoples; it is a worldview held by a growing number of people of all walks of life, of all races and creeds. The destructive global development paradigm is increasingly being rejected. A new paradigm is emerging, that of sustainability, where life seeks balance with our Mother the Earth, where Her needs and our needs are kept in balance — even if it requires a rapid reduction and end to our consumption of fossil fuels.
30 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 31 PHOTOS : Katherine Sammons / Greater Cincinnati Native
American Coalition; Ayse Gürsöz PHOTO : Mitch Anderson / Amazon Frontlines Youth movements are recognizing that their world is being destroyed by fossil fuels — that they and their children and grandchildren will suffer an increasingly unlivable world. Their movements overlap, join, and support Indigenous and local communities’ struggles against fossil fuel development.
Defending Sustainability
But predatory capitalist institutions are fighting back, criminalizing defenders of the Earth and intimidating Indigenous resistance and entire communities with assassinations, threats, imprisonment, and exile.83 We must defend our defenders and bring their plight to light, joining in solidarity with their local struggles. Defending our defenders means defending sustainability in an increasingly unsustainable and warming world.
“Keep It in the Ground” campaigns are now global, and the ripple effects are spreading. In May 2021, a Dutch court ruled that Shell has to slash its greenhouse gas emissions as part of its responsibility to respect human rights.84 Challenging the extractive colonialist fossil fuel industry and its financial backers means supporting human rights, and in particular the social and moral authority of Indigenous Peoples and other communities fighting fossil fuel development. By promoting an end to bank financing for fossil fuel expansion and a phase-out of fossil fuel funding overall, we support sustainability and systemic change in fossil fuel–dependent economies and an end to the industry’s destruction of Earth’s life-sustaining capacity.
Keep it in the ground!
FOSSIL FUEL EXPANSION
PHOTO : Orjan Ellingvag / Alamy Stock Photo
BIG OIL REALITY CHECK:
Oil and Gas Companies Plan Expansion Far Beyond
Climate Goals
The industry that has done the most to cause the climate crisis will not solve it. Research shows that the oil and gas industry has already invested in producing more oil and gas than we can afford to burn if we are to limit global warming to 1.5ºC.85
In 2021, the International Energy Agency published its first 1.5ºCaligned energy scenario, concluding that no new oil or gas fields are “needed” beyond those already producing or under development.86 This is not a result of modeling choices, but of mathematics. The arithmetic of 1.5ºC requires oil and gas production to decline by at least 3–4% per year, allowing no room for continued expansion. That the IEA reached this finding is particularly notable, because the agency was originally created with an express purpose of securing wealthy nations’ access to oil, and because the IEA scenario itself relies on an extremely rapid, implausible growth in carbon capture and storage.87
Despite this, no major oil and gas company has committed to ending new expansion beyond existing fields. While these companies claim to be part of the solution to the climate crisis, the reality is very different.
A 2020 report from Oil Change International (endorsed by 30 other civil society organizations) analyzed the current climate commitments of eight of the largest integrated oil and gas companies — BP, Chevron, Eni, Equinor, ExxonMobil, Repsol, Shell, and TotalEnergies — in light of the ambition and integrity required to achieve a 1.5°C-aligned managed decline of oil and fossil gas use. It found that none of the evaluated oil and gas majors’ climate strategies, plans, and pledges come close to alignment with the Paris Agreement.88
A subsequent report by Oil Change International and Environmental Defence Canada (endorsed by 16 other Canadian organizations) analyzed eight Canadian producers of oil, gas, or both: Cenovus, Suncor Energy, Canadian Natural Resources (CNRL), Tourmaline Oil, Imperial Oil (owned by ExxonMobil), ARC Resources, Shell Canada, and Ovintiv, finding that almost all the companies ranked “grossly insufficient” on all 12 criteria.
Worldwide, only one oil major, BP, has committed to make an absolute cut to oil and gas extraction by 2030. However, it has excluded from that commitment around 30% of the carbon pollution associated with its extraction via its investment in Russian company Rosneft. It is too early to tell how BP’s intention to sell or abandon its stake in Rosneft will affect its production goal.89 Ultimately, it has not yet taken concrete steps to achieve this partial goal.90 Another oil major, Shell, has stated that it believes that 2019 will be the year that its oil production peaked, and that oil production will begin to decline by 1–2% until 2030 — but Shell’s plans to expand gas extraction mean its total fossil fuel production could still rise.91 In any case, such plans fall short of the bare minimum ambition needed to align with 1.5ºC.92
Several big oil and gas companies have published misleading netzero emissions pledges that contain vast loopholes. The reality is that many so-called net-zero pledges do not translate into real emissions reductions. Many either exclude the majority of the companies’ emissions — the emissions from their customers burning the oil and gas they sell — or provide no guarantee of them declining in the short- to medium-term. For example, ExxonMobil’s January 2022 pledge includes only its Scope 1 and 2 emissions from its operated assets, not its Scope 3 emissions (which are primarily from the burning of the oil and gas it sells).93
Though several companies have released new climate promises and plans over the last year, the conclusion remains unchanged: No major oil and gas company has yet released a climate pledge or sustainability plan that meets the bare minimum criteria for alignment with the Paris Agreement, and their bankers need to face this reality when making financing decisions — including explicitly requiring real Paris Agreement alignment as a precondition for financing, and walking away from clients that are not aligned.
32 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 33 Time is running out:
fossil fuel expansion
must end immediately.
RANK BANK
JPMORGAN CHASE
CITI
BANK OF AMERICA
MORGAN STANLEY
BNP PARIBAS
HSBC
BARCLAYS
ICBC
MUFG
GOLDMAN SACHS
MIZUHO
RBC
WELLS FARGO
BANK OF CHINA
SMBC GROUP
SOCIÉTÉ GÉNÉRALE
CRÉDIT AGRICOLE
SCOTIABANK
AGRICULTURAL BANK OF CHINA
DEUTSCHE BANK
CHINA CONSTRUCTION BANK
SANTANDER
CREDIT SUISSE
CHINA CITIC BANK
PING AN GROUP
CHINA MERCHANTS BANK
CHINA MINSHENG BANK
SHANGHAI PUDONG DEVELOPMENT BANK
INDUSTRIAL BANK
CHINA EVERBRIGHT BANK
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
BANKING ON CLIMATE CHAOS 2022
2018
$14.760 B
$12.633 B
$7.444 B
$7.398 B
$5.031 B
$5.357 B
$6.447 B
$6.322 B
$6.294 B
$3.419 B
$6.969 B
$6.799 B
$7.894 B
$6.562 B
$5.356 B
$3.826 B
$3.879 B
$4.532 B
$1.701 B
$2.031 B
$2.760 B
$1.898 B
$2.793 B
$3.132 B
$5.325 B
$4.186 B
$1.219 B
$2.222 B
$2.453 B
$1.365 B
34 2017
$15.479 B
$9.826 B
$5.611 B
$7.391 B
$4.357 B
$8.882 B
$5.439 B
$5.176 B
$6.761 B
$3.676 B
$3.355 B
$7.207 B
$5.377 B
$4.455 B
$3.706 B
$2.701 B
$3.893 B
$4.557 B
$2.191 B
$3.520 B
$2.277 B
$2.600 B
$3.215 B
$2.967 B
$3.218 B
$1.759 B
$109 M
$2.168 B
$2.089 B
$1.977 B
Bank financing for 100 key oil, gas, and coal companies expanding fossil fuels 2016
$22.837 B
$15.603 B
$15.201 B
$11.399 B
$5.431 B
$5.890 B
$12.348 B
$10.280 B
$5.767 B
$9.819 B
$5.994 B
$4.300 B
$1.934 B
$7.263 B
$4.609 B
$4.336 B
$3.797 B
$2.366 B
$6.521 B
$8.338 B
$6.881 B
$4.511 B
$8.086 B
$4.424 B
$1.432 B
$3.235 B
$325 M
$3.454 B
$2.117 B
$2.599 B
2020 TREND
35 $25.436 B
$25.045 B
$23.689 B
$13.263 B
$29.128 B
$16.405 B
$15.559 B
$10.189 B
$10.719 B
$7.898 B
$7.501 B
$4.149 B
$5.751 B
$7.476 B
$9.779 B
$11.103 B
$11.217 B
$3.155 B
$6.687 B
$3.923 B
$4.024 B
$7.841 B
$2.119 B
$2.904 B
$3.903 B
$3.411 B
$6.705 B
$3.232 B
$4.092 B
$4.389 B
BANKING ON CLIMATE CHAOS 2022
2019
$22.261 B
$26.200 B
$20.738 B
$12.883 B
$7.754 B
$11.821 B
$10.472 B
$10.464 B
$9.847 B
$11.043 B
$11.195 B
$8.681 B
$8.889 B
$7.752 B
$7.529 B
$7.242 B
$6.079 B
$5.174 B
$5.181 B
$2.355 B
$4.224 B
$4.642 B
$4.270 B
$5.932 B
$2.623 B
$2.724 B
$8.129 B
$2.939 B
$1.055 B
$2.191 B
2021
$15.833 B
$15.101 B
$8.356 B
$9.054 B
$3.856 B
$6.494 B
$4.003 B
$5.597 B
$8.287 B
$8.068 B
$6.935 B
$7.683 B
$7.975 B
$4.018 B
$5.972 B
$4.349 B
$3.733 B
$6.146 B
$2.909 B
$3.691 B
$3.404 B
$1.902 B
$2.339 B
$2.374 B
$4.299 B
$3.988 B
$67 M
$2.009 B
$3.969 B
$3.195 B
TOTAL
2016-2021
$116.605 B
$104.406 B
$81.040 B
$61.388 B
$55.557 B
$54.850 B
$54.267 B
$48.028 B
$47.676 B
$43.923 B
$41.949 B
$38.818 B
$37.819 B
$37.526 B
$36.950 B
$33.557 B
$32.598 B
$25.930 B
$25.190 B
$23.858 B
$23.571 B
$23.393 B
$22.821 B
$21.733 B
$20.799 B
$19.304 B
$16.554 B
$16.024 B
$15.775 B
$15.716 B
LEAGUE TABLE - Banking on Fossil Fuel Expansion
B = BILLIONS M = MILLIONS T = TRILLIONS
GRAND TOTAL $156.897 B $178.793 B
36 BANKING ON CLIMATE CHAOS 2022
LEAGUE TABLE - Banking on Fossil Fuel Expansion (cont’d) 31 32
33 34
35 36
37 38
39 40
41 42
43 44
45 46
47 48
49 50
51 52
53 54
55 56
57 58
59 60
RANK BANK 2016 2017 2018
$218.853 B
TD
UBS
STANDARD CHARTERED
BBVA
BPCE/NATIXIS
BANK OF MONTREAL
STATE BANK OF INDIA
UNICREDIT
BANK OF COMMUNICATIONS
ING
ANZ
INTESA SANPAOLO
POSTAL SAVINGS BANK OF CHINA
NATWEST
CIBC
LLOYDS
COMMONWEALTH BANK
COMMERZBANK
NORDEA BANK
PNC
WESTPAC
DANSKE BANK
NAB
KB FINANCIAL
CAIXABANK
DZ BANK
SUMI TRUST
RABOBANK
CRÉDIT MUTUEL
LA BANQUE POSTALE
$1.641 B
$2.688 B
$379 M
$1.761 B
$1.250 B
$266 M
$447 M
$1.534 B
$1.612 B
$782 M
$1.143 B
$1.356 B
$117 M
$415 M
$141 M
$860 M
$107 M
$208 M
$487 M
-
$67 M
$237 M
$65 M
$155 M
-
-
-
$41 M
-
-
$2.272 B
$2.698 B
$1.739 B
$1.143 B
$1.231 B
$1.662 B
$605 M
$466 M
$1.123 B
$420 M
$721 M
$970 M
$123 M
$1.129 B
$140 M
$613 M
$135 M
$556 M
$1.195 B
$736 M
$722 M
$159 M
$47 M
$154 M
-
$150 M
-
$47 M
-
-
$3.447 B
$3.382 B
$2.729 B
$1.812 B
$766 M
$1.786 B
$270 M
$1.172 B
$1.087 B
$2.262 B
$1.264 B
$1.023 B
$761 M
$570 M
$1.043 B
$701 M
$1.242 B
$650 M
$50 M
$350 M
$21 M
-
$129 M
$67 M
$142 M
-
-
-
$62 M
-
TREND
$285.553 B $319.661 B $185.491 B $1.345 T
BANKING ON CLIMATE CHAOS 2022 37
2019 2020 2021 TOTAL
2016-2020
$2.471 B
$3.744 B
$1.784 B
$2.145 B
$1.626 B
$1.576 B
$5.603 B
$650 M
$402 M
$2.042 B
$1.613 B
$252 M
$2.236 B
$364 M
$453 M
$733 M
$431 M
$927 M
$749 M
$609 M
$1.884 B
$364 M
$381 M
$84 M
$143 M
-
-
-
-
-
$1.938 B
$464 M
$3.094 B
$2.307 B
$1.935 B
$2.161 B
$806 M
$3.159 B
$1.628 B
$643 M
$2.033 B
$635 M
$997 M
$907 M
$1.637 B
$603 M
$1.492 B
$539 M
$59 M
$849 M
$114 M
$59 M
$254 M
$232 M
$134 M
$87 M
$200 M
-
-
-
$3.929 B
$1.108 B
$1.053 B
$561 M
$2.271 B
$957 M
$455 M
$970 M
$1.859 B
$939 M
-
$1.236 B
$1.181 B
$700 M
$549 M
$139 M
$126 M
$302 M
$613 M
$301 M
-
$298 M
$126 M
$100 M
$89 M
-
-
$25 M
-
-
$15.699 B
$14.083 B
$10.778 B
$9.730 B
$9.079 B
$8.406 B
$8.187 B
$7.952 B
$7.711 B
$7.089 B
$6.774 B
$5.471 B
$5.415 B
$4.085 B
$3.961 B
$3.649 B
$3.533 B
$3.183 B
$3.153 B
$2.845 B
$2.808 B
$1.116 B
$1.002 B
$791 M
$507 M
$237 M
$200 M
$113 M
$62 M
-
B = BILLIONS M = MILLIONS T = TRILLIONS
$218.853 B $156.897 B $178.793 B
PHOTO : Paul Miles / Alamy Stock Photo
TAR SANDS OIL
Despite fierce — and still ongoing — resistance to its construction, in 2021 Enbridge’s Line 3 tar sands pipeline came online, giving upstream producers greater access to export markets in the U.S.94 At the same time that it was pushing through this climate-damaging and rights-abusing project, Enbridge issued “sustainability-linked” financing, linked to operational emissions intensity targets and greenwashed by major Canadian banks like CIBC and global peers like Bank of America and HSBC. 95 Of the 60 banks in the scope of this report, 25 have a policy restricting some tar sands financing; however, most are limited to project-related transactions — only about 4% of tar sands oil lending and underwriting since the Paris Agreement.96 BANKING ON CLIMATE CHAOS 2022 39
$0B
$2B
$4B
$6B
$8B
$10B
TD RBC CIBC
‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 WORST BANKS BY TOTAL TAR SANDS FINANCING (2016–2021)
» For a detailed assessment of banks’ tar sands policies, see the Oil and Gas Policy Tracker at
OilGasPolicyTracker.org and excerpted at
BankingonClimateChaos.org.
TAR SANDS FINANCING POLICIES BY QUALITY
Robust
Comprehensive
Weak
Very Weak
No Policy
38 BANKING ON CLIMATE CHAOS 2022 Page 563 of 630
Bank financing for 30 top tar sands production companies and six key tar sands pipeline companies
RANK BANK
TD
RBC
CIBC
JPMORGAN CHASE
SCOTIABANK
BANK OF MONTREAL
BARCLAYS
BANK OF AMERICA
CITI
HSBC
MUFG
WELLS FARGO
MIZUHO
MORGAN STANLEY
DEUTSCHE BANK
SMBC GROUP
CREDIT SUISSE
BNP PARIBAS
SOCIÉTÉ GÉNÉRALE
GOLDMAN SACHS
CRÉDIT AGRICOLE
ICBC
BANK OF CHINA
UBS
CHINA CONSTRUCTION BANK
AGRICULTURAL BANK OF CHINA
BANK OF COMMUNICATIONS
SANTANDER
STANDARD CHARTERED
INDUSTRIAL BANK
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
2021
COMPARED TO
2016
40 BANKING ON CLIMATE CHAOS 2022
$5.424 B
$5.445 B
$2.228 B
$1.971 B
$1.464 B
$2.191 B
$330 M
$608 M
$530 M
$446 M
$393 M
$286 M
$703 M
$223 M
$192 M
$267 M
$32 M
$15 M
$122 M
$118 M
$68 M
$43 M
$21 M
$12 M
$39 M
$23 M
$22 M
$15 M
$8 M
$28 M
2021
$27.454 B
$27.445 B
$13.682 B
$10.879 B
$10.443 B
$9.738 B
$4.322 B
$3.831 B
$3.730 B
$3.009 B
$2.092 B
$1.665 B
$1.581 B
$1.318 B
$1.131 B
$922 M
$902 M
$867 M
$632 M
$619 M
$392 M
$233 M
$161 M
$148 M
$122 M
$116 M
$94 M
$87 M
$57 M
$50 M
TOTAL
2016-2021
+$2.370 B
+$3.024 B
-$459 M
+$179 M
+$147 M
-$237 M
-$171 M
+$53 M
-$136 M
-$261 M
+$215 M
-$332 M
+$474 M
-$28 M
-$296 M
+$152 M
-$109 M
-$411 M
+$41 M
+$2 M
+$9 M
-$6 M
-$24 M
-$6 M
+$31 M
+$15 M
+$14 M
+$11 M
-$0.4 M
+$28 M
RANK BANK
2021
COMPARED TO
2016
31 32
33 34
35 36
37 38
39 40
41 42
43 44
45 46
47 48
BBVA
CHINA EVERBRIGHT BANK
BPCE/NATIXIS
ING
ANZ
CHINA MINSHENG BANK
NATWEST
LLOYDS
CHINA MERCHANTS BANK
COMMONWEALTH BANK
UNICREDIT
COMMERZBANK
INTESA SANPAOLO
PNC
CHINA CITIC BANK
SHANGHAI PUDONG DEVELOPMENT BANK
PING AN GROUP
POSTAL SAVINGS BANK OF CHINA
CAIXABANK
CRÉDIT MUTUEL
DANSKE BANK
DZ BANK
KB FINANCIAL
LA BANQUE POSTALE
NAB
NORDEA BANK
RABOBANK
STATE BANK OF INDIA
SUMI TRUST
WESTPAC
GRAND TOTAL $128.039 B
BANKING ON CLIMATE CHAOS 2022 41
2021
$1 M
-
-
$1 M
-
$12 M
$3 M
$1 M
-
-
-
$1 M
-
$1 M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$23.288 B
TOTAL
2016-2021
$41 M
$40 M
$35 M
$31 M
$29 M
$22 M
$19 M
$19 M
$18 M
$17 M
$16 M
$13 M
$6 M
$5 M
$3 M
$2 M
$2 M
$1 M
-
-
-
-
-
-
-
-
-
-
-
-
+$4.284 B
-$1 M
-
-
-$3 M
-$4 M
+$12 M
+$1 M
-$1 M
-
-
-$6 M
+$1 M
-$6 M
+$1 M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
LEAGUE TABLE - Banking on Tar Sands Oil
PHOTO : Saraporn / shutterstock
ARCTIC OIL & GAS
BANKING ON CLIMATE CHAOS 2022 43
After years of pressure from the Gwich’in — native to the Alaskan Arctic — and their allies, at this point 39 of the 60 banks covered in this report have an Arctic oil and gas policy.97 However, not only are most of these policies limited to project finance, but most also use a very narrow definition of “the Arctic,” thus limiting their effectiveness.98
For instance, an investigation by Reclaim Finance revealed that banks like Bank of America, UniCredit, and Mizuho apply their policies only within the Arctic Circle, which excludes 168 oil and gas assets in the Arctic region as defined by the Arctic Monitoring and Assessment Programme (AMAP).99
$0B
$1B
$2B
$3B
$4B
$5B
BNP PARIBAS JPMORGAN CHASE UNICREDIT
‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 WORST BANKS BY TOTAL ARCTIC OIL & GAS FINANCING (2016–2021) » For a detailed assessment of banks’ Arctic oil and
gas policies, see the Oil and Gas Policy Tracker at
OilGasPolicyTracker.org and excerpted at
BankingonClimateChaos.org.
ARCTIC OIL & GAS FINANCING POLICIES BY QUALITY
Robust
Comprehensive
Weak
Very Weak
No Policy
42 BANKING ON CLIMATE CHAOS 2022 Page 565 of 630
Bank financing for 30 top Arctic oil and gas companies
RANK BANK
BNP PARIBAS
JPMORGAN CHASE
UNICREDIT
CITI
CRÉDIT AGRICOLE
BARCLAYS
BANK OF AMERICA
SMBC GROUP
SOCIÉTÉ GÉNÉRALE
DEUTSCHE BANK
MUFG
MIZUHO
CHINA MINSHENG BANK
INTESA SANPAOLO
HSBC
MORGAN STANLEY
GOLDMAN SACHS
ING
COMMERZBANK
WELLS FARGO
BANK OF CHINA
CREDIT SUISSE
BPCE/NATIXIS
SANTANDER
UBS
ICBC
STATE BANK OF INDIA
TD
AGRICULTURAL BANK OF CHINA
RBC
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
2021
COMPARED TO
2016
44 BANKING ON CLIMATE CHAOS 2022
$341 M
$1.052 B
$519 M
$642 M
$331 M
$98 M
$387 M
$1.000 B
$353 M
$85 M
$205 M
$269 M
-
$711 M
$200 M
$94 M
$91 M
$251 M
$172 M
$251 M
-
$94 M
$251 M
$245 M
$94 M
-
$18 M
$0.3 M
-
$120 M
2021
$5.966 B
$5.212 B
$2.868 B
$2.412 B
$2.227 B
$2.063 B
$1.894 B
$1.669 B
$1.599 B
$1.345 B
$1.295 B
$1.271 B
$1.270 B
$1.133 B
$1.045 B
$862 M
$776 M
$601 M
$564 M
$513 M
$507 M
$499 M
$472 M
$458 M
$458 M
$449 M
$334 M
$311 M
$300 M
$224 M
TOTAL
2016-2021
+$123 M
+$533 M
+$289 M
+$314 M
+$200 M
-$277 M
+$97 M
+$947 M
+$243 M
-$251 M
+$132 M
+$92 M
-
+$662 M
+$38 M
-$92 M
+$18 M
+$231 M
+$172 M
+$251 M
-$181 M
+$28 M
+$251 M
+$205 M
-$45 M
-
+$18 M
-$206 M
-
+$95 M
RANK BANK
2021
COMPARED TO
2016
31 32
33 34
35 36
37 38
39 40
41 42
43 44
45 46
47 48
49 50
SHANGHAI PUDONG DEVELOPMENT BANK
DZ BANK
STANDARD CHARTERED
CHINA CONSTRUCTION BANK
POSTAL SAVINGS BANK OF CHINA
CHINA CITIC BANK
LLOYDS
NATWEST
NORDEA BANK
BBVA
CIBC
PNC
ANZ
BANK OF MONTREAL
WESTPAC
CHINA MERCHANTS BANK
SCOTIABANK
COMMONWEALTH BANK
CAIXABANK
INDUSTRIAL BANK
BANK OF COMMUNICATIONS
CHINA EVERBRIGHT BANK
CRÉDIT MUTUEL
DANSKE BANK
KB FINANCIAL
LA BANQUE POSTALE
NAB
PING AN GROUP
RABOBANK
SUMI TRUST
GRAND TOTAL $42.023 B
BANKING ON CLIMATE CHAOS 2022 45
2021
-
-
$57 M
-
-
-
$0.2 M
$11 M
$57 M
$45 M
$57 M
$57 M
-
-
-
-
-
-
$0.3 M
-
-
-
-
-
-
-
-
-
-
-
$8.159 B
TOTAL
2016-2021
$210 M
$185 M
$129 M
$121 M
$110 M
$106 M
$93 M
$89 M
$83 M
$76 M
$62 M
$57 M
$45 M
$27 M
$18 M
$8 M
$6 M
$2 M
$1 M
$1 M
-
-
-
-
-
-
-
-
-
-
+$4.119 B
-
-
+$53 M
-
-
-
-$31 M
-$6 M
+$57 M
+$45 M
+$57 M
+$57 M
-
-
-
-
-
-
+$0.3 M
-
-
-
-
-
-
-
-
-
-
-
LEAGUE TABLE - Banking on Arctic Oil & Gas
Robust
Comprehensive
Weak
Very Weak
No Policy
PHOTO : Rick Wood Photography / Alamy Stock Photo
OFFSHORE OIL & GAS
BANKING ON CLIMATE CHAOS 2022 47
Only 10 of the world’s 60 biggest banks have a policy restricting financing for ultra-deepwater offshore oil and gas activities.100 Yet banks need to contend not only with their financing of drilling deeper than around 7,000 feet (2,100 meters), but also with all offshore drilling, given the potentially devastating impacts of a spill at any depth.101 The Deepwater Horizon oil spill in 2010, for example, occurred when BP was drilling at a depth of about 5,000 feet (1,500 meters).102
$0B
$2B
$4B
$6B
$8B
$10B
$12B
$14B
$16B
BNP PARIBAS JPMORGAN CHASE CITI
‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 WORST BANKS BY TOTAL OFFSHORE OIL & GAS FINANCING (2016–2021) » For a detailed assessment of banks’ ultra-deepwater oil and gas policies, see the Oil and Gas Policy Tracker at OilGasPolicyTracker.org and excerpted at
BankingonClimateChaos.org.
ULTRA-DEEPWATER OFFSHORE OIL & GAS FINANCING POLICIES BY
QUALITY
46 BANKING ON CLIMATE CHAOS 2022 Page 567 of 630
Bank financing for 30 top offshore oil and gas companies
RANK BANK
BNP PARIBAS
JPMORGAN CHASE
CITI
BANK OF AMERICA
HSBC
MORGAN STANLEY
BARCLAYS
CRÉDIT AGRICOLE
GOLDMAN SACHS
MUFG
MIZUHO
SMBC GROUP
SOCIÉTÉ GÉNÉRALE
SANTANDER
DEUTSCHE BANK
CREDIT SUISSE
BBVA
UBS
UNICREDIT
STATE BANK OF INDIA
SCOTIABANK
STANDARD CHARTERED
ING
BPCE/NATIXIS
ANZ
RBC
BANK OF CHINA
WELLS FARGO
NORDEA BANK
INTESA SANPAOLO
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
2021
COMPARED TO
2016
48 BANKING ON CLIMATE CHAOS 2022
$2.629 B
$4.835 B
$6.281 B
$3.723 B
$3.525 B
$1.806 B
$1.365 B
$2.310 B
$3.571 B
$3.510 B
$2.406 B
$2.219 B
$2.127 B
$869 M
$2.522 B
$856 M
-
$189 M
$1.242 B
$221 M
$434 M
$441 M
$678 M
$667 M
-
$363 M
$629 M
$755 M
$567 M
$804 M
2021
$36.536 B
$35.287 B
$34.566 B
$28.496 B
$23.518 B
$20.092 B
$19.636 B
$17.015 B
$15.418 B
$15.203 B
$14.418 B
$13.386 B
$12.662 B
$11.935 B
$10.563 B
$4.682 B
$3.994 B
$3.961 B
$3.887 B
$3.525 B
$3.031 B
$3.030 B
$2.942 B
$2.938 B
$2.918 B
$2.838 B
$2.661 B
$2.599 B
$2.297 B
$2.256 B
TOTAL
2016-2021
+$19 M
-$3.226 B
+$916 M
-$3.511 B
+$746 M
-$2.939 B
-$3.999 B
+$585 M
+$1.448 B
+$1.431 B
-$248 M
+$337 M
+$676 M
-$2.356 B
-$609 M
-$329 M
-$775 M
-$346 M
+$666 M
+$221 M
+$355 M
+$320 M
+$562 M
+$124 M
-$600 M
-$399 M
+$264 M
+$480 M
+$317 M
+$228 M
RANK BANK
2021
COMPARED TO
2016
31 32
33 34
35 36
37 38
39 40
41 42
43 44
45 46
47 48
49 50
51 52
ICBC
LLOYDS
NATWEST
COMMERZBANK
COMMONWEALTH BANK
WESTPAC
AGRICULTURAL BANK OF CHINA
BANK OF COMMUNICATIONS
BANK OF MONTREAL
DANSKE BANK
CHINA MINSHENG BANK
CHINA CONSTRUCTION BANK
CIBC
TD
RABOBANK
KB FINANCIAL
SHANGHAI PUDONG DEVELOPMENT BANK
INDUSTRIAL BANK
POSTAL SAVINGS BANK OF CHINA
CHINA CITIC BANK
NAB
CHINA MERCHANTS BANK
CAIXABANK
CHINA EVERBRIGHT BANK
CRÉDIT MUTUEL
DZ BANK
LA BANQUE POSTALE
PING AN GROUP
PNC
SUMI TRUST
GRAND TOTAL $370.046 B
BANKING ON CLIMATE CHAOS 2022 49
2021
-
$60 M
$339 M
$182 M
-
-
-
-
$118 M
$298 M
-
-
$269 M
$103 M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$52.913 B
TOTAL
2016-2021
$1.760 B
$1.491 B
$1.402 B
$1.368 B
$1.075 B
$833 M
$763 M
$730 M
$715 M
$691 M
$688 M
$675 M
$359 M
$346 M
$290 M
$231 M
$153 M
$53 M
$52 M
$50 M
$29 M
$4 M
-
-
-
-
-
-
-
-
-$10.183 B
-$270 M
-$253 M
+$170 M
+$182 M
-$24 M
-$24 M
-$10 M
-$578 M
+$118 M
+$298 M
-
-$355 M
+$269 M
+$103 M
-$116 M
-$49 M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
LEAGUE TABLE - Banking on Offshore Oil & Gas
Robust
Comprehensive
Weak
Very Weak
No Policy
FRACKED OIL & GAS
BANKING ON CLIMATE CHAOS 2022 51
Among the world’s 60 biggest banks, 21 have a policy restricting financing to fracked oil and gas.103 The largest U.S. banks are not among them, and they remain the largest funders of the sector.
$0B
$2B
$4B
$6B
$8B
$10B
$12B
$14B
JPMORGAN CHASE WELLS FARGO CITI
‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 » For a detailed assessment of banks’ fracked oil and gas policies, see the Oil and Gas Policy Tracker at
OilGasPolicyTracker.org and excerpted at
BankingonClimateChaos.org.
FRACKED OIL & GAS FINANCING POLICIES BY QUALITY
50 BANKING ON CLIMATE CHAOS 2022
WORST BANKS BY TOTAL FRACKED OIL & GAS FINANCING (2016–2021) PHOTO : Peter Bennet / Alamy Stock Photo
Bank financing for 30 top fracking companies and 10 key fracked oil and gas pipeline companies
RANK BANK
JPMORGAN CHASE
WELLS FARGO
CITI
BANK OF AMERICA
BARCLAYS
MIZUHO
MUFG
SCOTIABANK
RBC
TD
CREDIT SUISSE
GOLDMAN SACHS
MORGAN STANLEY
BANK OF MONTREAL
SMBC GROUP
PNC
DEUTSCHE BANK
BNP PARIBAS
SOCIÉTÉ GÉNÉRALE
HSBC
CRÉDIT AGRICOLE
CIBC
BPCE/NATIXIS
UBS
ICBC
BBVA
NATWEST
COMMERZBANK
SANTANDER
BANK OF CHINA
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
2021
COMPARED TO
2016
52 BANKING ON CLIMATE CHAOS 2022
$6.853 B
$8.542 B
$5.162 B
$4.339 B
$3.115 B
$3.361 B
$3.270 B
$5.749 B
$3.711 B
$2.462 B
$1.416 B
$1.683 B
$2.554 B
$932 M
$1.562 B
$1.470 B
$720 M
$123 M
$1.073 B
$485 M
$573 M
$452 M
-
-
$349 M
$137 M
$44 M
$169 M
$56 M
$210 M
2021
$58.022 B
$47.785 B
$45.411 B
$42.181 B
$28.834 B
$27.572 B
$27.147 B
$22.956 B
$21.582 B
$18.238 B
$15.830 B
$15.352 B
$12.933 B
$10.565 B
$9.046 B
$7.879 B
$7.740 B
$6.205 B
$6.033 B
$5.422 B
$4.738 B
$3.381 B
$2.894 B
$2.785 B
$2.020 B
$2.015 B
$1.368 B
$1.358 B
$1.095 B
$934 M
TOTAL
2016-2021
-$3.566 B
+$5.840 B
-$881 M
-$1.176 B
-$503 M
+$882 M
+$361 M
+$3.649 B
+$1.882 B
+$1.043 B
-$3.690 B
-$2.810 B
+$1.641 B
+$715 M
+$1.144 B
+$1.134 B
-$597 M
-$456 M
+$308 M
+$154 M
+$453 M
+$369 M
-$116 M
-$680 M
+$46 M
-$97 M
-$823 M
+$169 M
+$18 M
+$37 M
RANK BANK
2021
COMPARED TO
2016
31 32
33 34
35 36
37 38
39 40
41 42
43 44
45 46
AGRICULTURAL BANK OF CHINA
CHINA MINSHENG BANK
INDUSTRIAL BANK
CHINA CONSTRUCTION BANK
CHINA EVERBRIGHT BANK
STANDARD CHARTERED
LLOYDS
ING
PING AN GROUP
CHINA CITIC BANK
CHINA MERCHANTS BANK
BANK OF COMMUNICATIONS
SHANGHAI PUDONG DEVELOPMENT BANK
ANZ
POSTAL SAVINGS BANK OF CHINA
NORDEA BANK
CAIXABANK
COMMONWEALTH BANK
CRÉDIT MUTUEL
DANSKE BANK
DZ BANK
INTESA SANPAOLO
KB FINANCIAL
LA BANQUE POSTALE
NAB
RABOBANK
STATE BANK OF INDIA
SUMI TRUST
UNICREDIT
WESTPAC
GRAND TOTAL $464.752 B
BANKING ON CLIMATE CHAOS 2022 53
2021
$143 M
-
$358 M
$193 M
$178 M
$56 M
$19 M
$217 M
$128 M
-
$98 M
$78 M
-
-
-
$37 M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$62.077 B
TOTAL
2016-2021
$842 M
$827 M
$679 M
$518 M
$502 M
$310 M
$303 M
$267 M
$240 M
$214 M
$202 M
$180 M
$114 M
$99 M
$98 M
$37 M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
+$5.677 B
-$57 M
-
+$358 M
+$193 M
+$178 M
+$56 M
-$10 M
+$170 M
+$128 M
-
+$98 M
+$78 M
-
-
-
+$37 M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
LEAGUE TABLE - Banking on Fracked Oil & Gas
PHOTO : Pomorzev / shutterstock
BANKING ON CLIMATE CHAOS 2022 55
LNG continues to be touted by industry, governments, and banks as a “bridge fuel,” even after the IEA stated that in its net-zero scenario, “no new [gas] fields or export projects are developed.”104 Meanwhile, a slate of proposed export terminals in North America, concentrated on the U.S. Gulf Coast, could be looking to banks to finance their massive projects in the coming years.105 A corresponding group of import terminals proposed in Asia are being pushed forward, even given financial market constraints that threaten to make them stranded assets almost instantly.106 $0B
$1B
$2B
$3B
$4B
MORGAN STANLEY CITI JPMORGAN CHASE
‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 WORST BANKS BY TOTAL LNG FINANCING (2016–2021)
54 BANKING ON CLIMATE CHAOS 2022
LNG
PHOTO : Bildagentur Zoonar GmbH / shutterstock
Bank financing for 30 top liquefied natural gas import and export companies
RANK BANK
MORGAN STANLEY
CITI
JPMORGAN CHASE
SMBC GROUP
MIZUHO
BANK OF AMERICA
SOCIÉTÉ GÉNÉRALE
BNP PARIBAS
MUFG
GOLDMAN SACHS
HSBC
RBC
SANTANDER
SCOTIABANK
UBS
BPCE/NATIXIS
CRÉDIT AGRICOLE
BARCLAYS
ING
ICBC
CREDIT SUISSE
STANDARD CHARTERED
BBVA
BANK OF CHINA
INTESA SANPAOLO
DEUTSCHE BANK
WELLS FARGO
LLOYDS
ANZ
AGRICULTURAL BANK OF CHINA
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
2021
COMPARED TO
2016
56 BANKING ON CLIMATE CHAOS 2022
$3.268 B
$1.234 B
$1.251 B
$1.334 B
$999 M
$1.145 B
$329 M
$135 M
$957 M
$1.647 B
$742 M
$1.908 B
$724 M
$1.086 B
$94 M
$1.634 B
$298 M
$168 M
$684 M
$464 M
$472 M
$197 M
$242 M
$23 M
$181 M
$340 M
$420 M
$17 M
-
-
2021
$13.398 B
$8.666 B
$8.398 B
$7.750 B
$7.730 B
$7.230 B
$6.437 B
$5.964 B
$5.894 B
$5.630 B
$5.279 B
$5.037 B
$4.343 B
$4.168 B
$4.055 B
$3.701 B
$3.698 B
$3.410 B
$3.350 B
$2.913 B
$2.714 B
$2.114 B
$1.958 B
$1.747 B
$1.746 B
$1.507 B
$1.246 B
$1.024 B
$941 M
$823 M
TOTAL
2016-2021
+$2.247 B
-$364 M
-$507 M
-$67 M
-$196 M
+$255 M
-$1.182 B
-$998 M
-$324 M
+$1.020 B
+$92 M
+$1.318 B
+$204 M
+$575 M
-$633 M
+$1.485 B
-$416 M
-$769 M
+$42 M
-$176 M
-$418 M
+$25 M
-$74 M
-$421 M
-$236 M
-$96 M
+$320 M
-$354 M
-$400 M
-$14 M
RANK BANK
2021
COMPARED TO
2016
31 32
33 34
35 36
37 38
39 40
41 42
43 44
45 46
47 48
49 50
51 52
53 54
55 56
57 58
WESTPAC
COMMONWEALTH BANK
CIBC
NAB
UNICREDIT
CAIXABANK
DANSKE BANK
NORDEA BANK
CHINA CONSTRUCTION BANK
CHINA MERCHANTS BANK
COMMERZBANK
SUMI TRUST
NATWEST
DZ BANK
INDUSTRIAL BANK
BANK OF MONTREAL
CHINA MINSHENG BANK
KB FINANCIAL
TD
CRÉDIT MUTUEL
BANK OF COMMUNICATIONS
SHANGHAI PUDONG DEVELOPMENT BANK
CHINA EVERBRIGHT BANK
PNC
POSTAL SAVINGS BANK OF CHINA
CHINA CITIC BANK
PING AN GROUP
LA BANQUE POSTALE
RABOBANK
STATE BANK OF INDIA
GRAND TOTAL $139.668 B
BANKING ON CLIMATE CHAOS 2022 57
2021
-
$126 M
$180 M
$126 M
$1 M
-
$75 M
$75 M
$21 M
$11 M
$17 M
-
$39 M
-
$39 M
$18 M
-
$94 M
$29 M
-
-
-
$19 M
-
-
-
$14 M
$1 M
-
-
$22.874 B
TOTAL
2016-2021
$787 M
$684 M
$642 M
$532 M
$521 M
$498 M
$390 M
$383 M
$377 M
$319 M
$285 M
$200 M
$173 M
$162 M
$147 M
$138 M
$129 M
$94 M
$85 M
$63 M
$54 M
$36 M
$28 M
$19 M
$19 M
$19 M
$14 M
$1 M
-
-
-$287 M
-$43 M
+$83 M
+$180 M
+$126 M
-$222 M
-$149 M
-$169 M
-$125 M
-$140 M
+$11 M
+$17 M
-
+$22 M
-
+$39 M
+$18 M
-
+$94 M
+$29 M
-
-$30 M
-
+$19 M
-
-
-
+$14 M
+$1 M
-
-
LEAGUE TABLE - Banking on LNG
BANKING ON CLIMATE CHAOS 2022 59
Of the world’s 60 biggest banks, 48 have a coal project financing exclusion policy, and 34 of these also have some sort of exclusion policy for coal financing at the corporate level. Coal is the sector that has seen the most progress on expansion policies, though the numbers are still disappointingly low: only 17 of the 60 biggest banks have some sort of explicit prohibition on financing coal developers that applies to their existing clients.
And yet, the sector’s biggest bankers have not made such policy commitments: none of the 13 Chinese banks profiled in this report have any sort of coal financing restriction at the corporate level.107
» For a detailed assessment of banks’ coal policies, see the Coal Policy Tool at CoalPolicyTool.org and excerpted at BankingonClimateChaos.org. $0B
$1B
$2B
$3B
$4B
$5B
$6B
$7B
$8B
BANK OF CHINA ICBC CHINA CITIC BANK
‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 WORST BANKS BY TOTAL COAL POWER FINANCING (2016–2021)
$0B
$1B
$2B
$3B
$4B
INDUSTRIAL BANK CHINA CITIC BANK CHINA CONSTRUCTION BANK ‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21 ‘16 ‘17 ’18 ‘19 ’20 ‘21
COAL MINING & POWER
WORST BANKS BY TOTAL COAL MINING FINANCING (2016–2021)
58 BANKING ON CLIMATE CHAOS 2022
PHOTO : Markik / shutterstock
Bank financing for 30 top coal mining companies
RANK BANK
INDUSTRIAL BANK
CHINA CITIC BANK
CHINA CONSTRUCTION BANK
CHINA EVERBRIGHT BANK
BANK OF CHINA
ICBC
CHINA MERCHANTS BANK
PING AN GROUP
BANK OF COMMUNICATIONS
SHANGHAI PUDONG DEVELOPMENT BANK
AGRICULTURAL BANK OF CHINA
CREDIT SUISSE
POSTAL SAVINGS BANK OF CHINA
CHINA MINSHENG BANK
CITI
JPMORGAN CHASE
DEUTSCHE BANK
UBS
COMMERZBANK
GOLDMAN SACHS
SOCIÉTÉ GÉNÉRALE
STANDARD CHARTERED
BANK OF MONTREAL
UNICREDIT
BANK OF AMERICA
ING
MIZUHO
MUFG
SANTANDER
HSBC
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
2021
COMPARED TO
2016
60 BANKING ON CLIMATE CHAOS 2022
$1.644 B
$2.333 B
$1.344 B
$3.454 B
$1.402 B
$965 M
$896 M
$1.093 B
$405 M
$573 M
$431 M
$13 M
$1.078 B
$394 M
$218 M
$70 M
$255 M
$57 M
$72 M
-
$69 M
-
-
-
$85 M
$62 M
$84 M
$41 M
-
$7 M
2021
$14.037 B
$12.030 B
$11.716 B
$10.040 B
$8.554 B
$6.861 B
$6.695 B
$5.342 B
$5.180 B
$5.164 B
$5.015 B
$2.068 B
$1.820 B
$1.745 B
$1.702 B
$1.625 B
$1.435 B
$1.181 B
$1.016 B
$953 M
$741 M
$686 M
$662 M
$660 M
$653 M
$558 M
$473 M
$472 M
$471 M
$461 M
TOTAL
2016-2021
+$131 M
+$383 M
-$1.072 B
+$2.643 B
+$671 M
-$252 M
-$1.010 B
+$773 M
-$325 M
-$188 M
-$986 M
-$56 M
+$1.068 B
$192 M
-$618 M
+$6 M
+$220 M
-$255 M
-$50 M
-
-$77 M
-$35 M
-$35 M
-$217 M
+$40 M
-$90 M
+$49 M
+$5 M
-$35 M
-$76 M
RANK BANK
2021
COMPARED TO
2016
31 32
33 34
35 36
37 38
39 40
41 42
43 44
45 46
47 48
49 50
MORGAN STANLEY
INTESA SANPAOLO
CRÉDIT AGRICOLE
BARCLAYS
BNP PARIBAS
NATWEST
BBVA
SCOTIABANK
TD
RBC
SMBC GROUP
NAB
COMMONWEALTH BANK
ANZ
RABOBANK
STATE BANK OF INDIA
NORDEA BANK
CIBC
BPCE/NATIXIS
WESTPAC
CAIXABANK
CRÉDIT MUTUEL
DANSKE BANK
DZ BANK
KB FINANCIAL
LA BANQUE POSTALE
LLOYDS
PNC
SUMI TRUST
WELLS FARGO
GRAND TOTAL $115.928 B
BANKING ON CLIMATE CHAOS 2022 61
2021
$55 M
-
$65 M
-
-
-
$43 M
$77 M
-
-
$77 M
-
-
-
$22 M
-
-
-
$22 M
-
-
-
-
-
-
-
-
-
-
-
$17.407 B
TOTAL
2016-2021
$452 M
$447 M
$445 M
$431 M
$403 M
$400 M
$391 M
$385 M
$384 M
$372 M
$353 M
$329 M
$308 M
$287 M
$215 M
$150 M
$90 M
$35 M
$29 M
$4 M
-
-
-
-
-
-
-
-
-
-
+$302 M
+$20 M
-$122 M
+$30 M
-$35 M
-$75 M
-$40 M
+$8 M
+$42 M
-$35 M
-$35 M
+$77 M
-$57 M
-$35 M
-$8 M
-$131 M
-
-$87 M
-$35 M
+$22 M
-
-
-
-
-
-
-
-
-
-
-
LEAGUE TABLE - Banking on Coal Mining
Bank financing for 30 top coal power companies
RANK BANK
BANK OF CHINA
ICBC
CHINA CITIC BANK
AGRICULTURAL BANK OF CHINA
CHINA CONSTRUCTION BANK
PING AN GROUP
CHINA MERCHANTS BANK
INDUSTRIAL BANK
SHANGHAI PUDONG DEVELOPMENT BANK
CHINA EVERBRIGHT BANK
CITI
MUFG
BANK OF COMMUNICATIONS
JPMORGAN CHASE
BARCLAYS
MIZUHO
BANK OF AMERICA
POSTAL SAVINGS BANK OF CHINA
CREDIT SUISSE
HSBC
WELLS FARGO
SCOTIABANK
STANDARD CHARTERED
CHINA MINSHENG BANK
RBC
UBS
MORGAN STANLEY
SMBC GROUP
STATE BANK OF INDIA
BNP PARIBAS
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
2021
COMPARED TO
2016
62 BANKING ON CLIMATE CHAOS 2022
$3.222 B
$3.191 B
$3.234 B
$2.618 B
$3.012 B
$3.862 B
$3.984 B
$3.217 B
$2.689 B
$2.677 B
$716 M
$627 M
$2.147 B
$1.233 B
$642 M
$694 M
$719 M
$1.042 B
$295 M
$217 M
$559 M
$405 M
$107 M
$324 M
$206 M
$215 M
$307 M
$173 M
$136 M
$88 M
2021
$29.918 B
$27.230 B
$21.924 B
$20.050 B
$19.658 B
$19.546 B
$16.771 B
$13.463 B
$12.508 B
$11.417 B
$6.294 B
$5.801 B
$5.658 B
$4.607 B
$4.509 B
$4.284 B
$3.642 B
$3.556 B
$3.432 B
$3.270 B
$3.098 B
$2.191 B
$2.183 B
$1.957 B
$1.938 B
$1.848 B
$1.713 B
$1.670 B
$1.542 B
$1.380 B
TOTAL
2016-2021
-$2.055 B
-$2.020 B
+$305 M
-$1.440 B
-$2.529 B
+$2.564 B
+$610 M
+$1.424 B
+$95 M
+$640 M
+$241 M
-$473 M
+$1.405 B
+$752 M
-$119 M
+$15 M
+$192 M
+$934 M
-$408 M
+$41 M
+$181 M
+$98 M
+$107 M
-$68 M
-$147 M
-$573 M
-$36 M
+$173 M
-$273 M
-$122 M
RANK BANK
2021
COMPARED TO
2016
31 32
33 34
35 36
37 38
39 39
41 42
43 44
45 46
47 48
GOLDMAN SACHS
PNC
CRÉDIT AGRICOLE
TD
ANZ
DEUTSCHE BANK
KB FINANCIAL
SANTANDER
NAB
COMMONWEALTH BANK
INTESA SANPAOLO
BBVA
CIBC
COMMERZBANK
WESTPAC
SOCIÉTÉ GÉNÉRALE
UNICREDIT
BPCE/NATIXIS
BANK OF MONTREAL
CAIXABANK
CRÉDIT MUTUEL
DANSKE BANK
DZ BANK
ING
LA BANQUE POSTALE
LLOYDS
NATWEST
NORDEA BANK
RABOBANK
SUMI TRUST
GRAND TOTAL $264.793 B
BANKING ON CLIMATE CHAOS 2022 63
2021
$106 M
$164 M
$133 M
$153 M
$71 M
$7 M
-
-
$96 M
$96 M
-
-
$115 M
$19 M
-
-
-
$2 M
-
-
-
-
-
-
-
-
-
-
-
-
$43.520 B
TOTAL
2016-2021
$1.369 B
$1.140 B
$1.020 B
$1.006 B
$781 M
$619 M
$364 M
$347 M
$220 M
$220 M
$199 M
$136 M
$115 M
$108 M
$53 M
$15 M
$14 M
$9 M
-
-
-
-
-
-
-
-
-
-
-
-
-$561 M
-$68 M
+$164 M
+$89 M
-$99 M
-$64 M
-$242 M
-
-$182 M
+$96 M
+$96 M
-
-
+$115 M
+$19 M
-
-
-
+$2 M
-
-
-
-
-
-
-
-
-
-
-
-
LEAGUE TABLE - Banking on Coal Power
64 BANKING ON CLIMATE CHAOS 2022
CONCLUSION
AND DEMANDS
Publication of this report marks another year in which most of the world’s biggest banks failed to take the bold action needed to drastically reduce their contributions to climate chaos. Time is running out: fossil fuel expansion must end immediately. Each dollar that banks put toward new fossil fuel projects and the companies behind them is incompatible with climate stability and their own net-zero commitments. Ending support for fossil fuel expansion is the next, urgent step toward banks zeroing out their fossil fuel financing on a 1.5°C-compatible timeline.
To align their policies and practices with a world that limits global warming to 1.5°C and fully respects human rights, and Indigenous rights in particular, banks must:
BANKING ON CLIMATE CHAOS 2022 65
PHOTO : Marcio Jose Bastos Silva / shutterstock; Rawpixel.com / shutterstock Measure, disclose, and set targets to zero out
the absolute climate impact of overall financing
activities on a 1.5°C-aligned timeline, including
short-, medium-, and long-term targets. Longterm climate impact commitments must be paired with immediate action on fossil fuels, the
single largest source of financed emissions.108
Fully respect all human rights, particularly the
rights of Indigenous Peoples, including their
rights to their water and lands and the right to
Free, Prior, and Informed Consent, as articulated
in the UN Declaration on the Rights of Indigenous
Peoples. Prohibit all financing for projects and
companies that abuse human rights, including
Indigenous rights.
Prohibit all financing for all fossil fuel expansion
projects and for all companies expanding fossil
fuel extraction and infrastructure along the
whole value chain.
Immediately begin zeroing out all financing
for fossil fuel extraction, combustion, and
infrastructure, on an explicit timeline that is
aligned with limiting global warming to 1.5°C,
starting with coal mining and coal power, as well
as financing for existing projects and companies
active in tar sands oil, Arctic oil and gas,
offshore oil and gas, fracked oil and gas, and
LNG. As part of this process, banks must require
all fossil fuel clients to publish plans to zero out
fossil fuel activity on a 1.5°C-aligned timeline.
PHOTO : Yellow Coat COP26 Collective
APPENDIX
BANKS INCLUDED
ABBREVIATED
NAME USED IN
THIS REPORT
IINDUSTRIAL AND COMMERCIAL BANK OF CHINA
CHINA CONSTRUCTION BANK
AGRICULTURAL BANK OF CHINA
BANK OF CHINA
MITSUBISHI UFJ FINANCIAL GROUP
JPMORGAN CHASE
BNP PARIBAS
HSBC
BANK OF AMERICA
CRÉDIT AGRICOLE
CITIGROUP
SUMITOMO MITSUI FINANCIAL GROUP (SMFG)
MIZUHO
WELLS FARGO
SANTANDER
BARCLAYS
SOCIÉTÉ GÉNÉRALE
BPCE/NATIXIS
POSTAL SAVINGS BANK OF CHINA
BANK OF COMMUNICATIONS
DEUTSCHE BANK
TORONTO-DOMINION BANK
ROYAL BANK OF CANADA
CHINA MERCHANTS BANK
INTESA SANPAOLO
SHANGHAI PUDONG DEVELOPMENT BANK
INDUSTRIAL BANK
LLOYDS BANKING GROUP
GOLDMAN SACHS
CHINA CITIC BANK
ICBC
MUFG
CITI
SMBC GROUP
TD
RBC
LLOYDS
COUNTRY
OF HEADQUARTERS
CHINA
CHINA
CHINA
CHINA
JAPAN
UNITED STATES
FRANCE
UNITED KINGDOM
UNITED STATES
FRANCE
UNITED STATES
JAPAN
JAPAN
UNITED STATES
SPAIN
UNITED KINGDOM
FRANCE
FRANCE
CHINA
CHINA
GERMANY
CANADA
CANADA
CHINA
ITALY
CHINA
CHINA
UNITED KINGDOM
UNITED STATES
CHINA
RANK BY
TOTAL ASSETS
1 2
3 4
5 6
7 8
9 10
11 12
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 29
30 31
66 BANKING ON CLIMATE CHAOS 2022
BANK
ING
UNICREDIT
UBS
MORGAN STANLEY
NATWEST
CHINA MINSHENG BANK
CRÉDIT MUTUEL
CREDIT SUISSE
SCOTIABANK
LA BANQUE POSTALE *
CHINA EVERBRIGHT BANK
COMMONWEALTH BANK OF AUSTRALIA
CAIXABANK *
BBVA
STANDARD CHARTERED
RABOBANK
BANK OF MONTREAL
AUSTRALIA & NEW ZEALAND BANKING GROUP
DZ BANK
PING AN INSURANCE GROUP
NORDEA BANK
DANSKE BANK
WESTPAC BANKING CORPORATION
STATE BANK OF INDIA
NATIONAL AUSTRALIA BANK
COMMERZBANK
CANADIAN IMPERIAL BANK OF COMMERCE
SUMITOMO MITSUI TRUST HOLDINGS
PNC FINANCIAL SERVICES *
KB FINANCIAL GROUP *
COMMONWEALTH BANK
ANZ
PING AN GROUP
WESTPAC
NAB
CIBC
SUMI TRUST
PNC
KB FINANCIAL
NETHERLANDS
ITALY
SWITZERLAND
UNITED STATES
UNITED KINGDOM
CHINA
FRANCE
SWITZERLAND
CANADA
FRANCE
CHINA
AUSTRALIA
SPAIN
SPAIN
UNITED KINGDOM
NETHERLANDS
CANADA
AUSTRALIA
GERMANY
CHINA
FINLAND
DENMARK
AUSTRALIA
INDIA
AUSTRALIA
GERMANY
CANADA
JAPAN
UNITED STATES
SOUTH KOREA
32 33
34 35
36 37
38 40
41 42
43 44
45 46
47 48
49 50
51 52
54 55
56 57
58 59
60 61
62 63
BANKING ON CLIMATE CHAOS 2022 67
COUNTRY
OF HEADQUARTERS
RANK BY
TOTAL ASSETS
ABBREVIATED
NAME USED IN
THIS REPORT
This analysis covers the world’s 60 biggest relevant banks by assets, according to the S&P Global Market Intelligence ranking from April 2021.109 Banks with little-to-no league credit for economy-wide financing were deemed irrelevant to this analysis. This resulted in the exclusion of three Japanese banks: Japan Post Bank (13th largest by assets globally), Norinchukin Bank (39th largest), and Resona Holdings (53rd largest). Due to changes in bank sizes, the starred banks are new to the 2022 edition of this report, replacing Shinhan Financial Group, U.S. Bancorp, Truist Financial, and Sberbank.
Due to data availability constraints, Ping An is the only one of the Chinese banks that is included at the group level:
Ping An Insurance (Group) Company of China, Ltd., which includes subsidiaries Ping An Bank and Ping An Securities.
BANK
68 BANKING ON CLIMATE CHAOS 2022
1 David Feliba and Rehan Ahmad, “The World’s 100 Largest Banks, 2021,” S&P Global, 12 April 2021, p. 2.
2 “La Banque Postale Is Stepping Up Its Decarbonisation Strategy,” La Banque Postale, 14 October 2021; “French Bank La Banque Postale Quits Oil & Gas, Sets International Precedent,” Reclaim Finance, 14 October 2021. 3 Bronwen Tucker and Nikki Reisch, “The Sky’s Limit Africa: The Case for a Just Energy Transition From Fossil Fuel Production in Africa,” Oil Change International, October 2021, p. 13; Greg Muttitt, “The Sky’s Limit: Why the Paris Climate Goals Require a Managed Decline of Fossil Fuel Production,” Oil Change International, 22 September 2016.
4 Coal Policy Tool, Reclaim Finance, accessed March 2022. 5 See page 62.
6 “Citi Becomes First U.S. Bank to Restrict Financing for Companies Expanding Coal Power,” Rainforest Action Network, 15 March 2021.
7 See page 19. Alongside any project-related financing identified via the Bloomberg Terminal, additional project finance deals were researched in the LNG and coal power sectors using IJGlobal, a project finance database. Additional research on this database may have provided more project-related financing in scope; however, the vast majority of fossil fuel financing remains at the corporate level. 8 “Members,” Net-Zero Banking Alliance, accessed March 2022; “Net Zero Banking Alliance Germany,” Green and Sustainable Finance Cluster Germany, accessed March 2022.
9 “Amount of Finance Committed to Achieving 1.5°C Now at Scale Needed to Deliver the Transition,” Glasgow Financial Alliance for Net Zero, 3 November 2021. 10 See, e.g., “The Amazon Rainforest-Sized Loophole in Net Zero,” Amazon Watch, July 2021; “COP26 Glasgow: What’s Needed Now to Avert Climate Chaos,” Rainforest Action Network, October 2021.
11 “Net Zero by 2050: A Roadmap for the Energy Sector,” IEA, May 2021. 12 See page 34. “Members,” Net-Zero Banking Alliance, accessed March 2022; “Net Zero Banking Alliance Germany,” Green and Sustainable Finance Cluster Germany, accessed March 2022.
13 The full dataset is available for download at bankingonclimatechaos.org. 14 “Global Oil & Gas Exit List,” urgewald e.V., November 2021. 15 See page 8.
16 These six banks together provided $220.5 billion in fossil fuel financing in 2021 (out of $749.8 billion) and $1.43 trillion in fossil fuel financing from 2016–2021 (out of $4.59 trillion). See page 8.
17 See page 40, and bankingonclimatechaos.org for the full dataset. 18 “Climate Change 2022: Impacts, Adaptation and Vulnerability: Summary for Policymakers,” Intergovernmental Panel on Climate Change, February 2022, p. 35. 19 “Members,” Net-Zero Banking Alliance, accessed March 2022; “Net Zero Banking Alliance Germany,” Green and Sustainable Finance Cluster Germany, accessed March 2022.
20 “Global Oil & Gas Exit List,” urgewald e.V., November 2021. 21 Financing flows represent the amount of league credit each bank was attributed by Bloomberg Finance L.P. in lending and underwriting to the company and all relevant subsidiaries, adjusted down by the proportion of each subsidiary’s involvement in fossil fuels. See the methodology section for more details. 22 “Global Oil & Gas Exit List,” urgewald e.V., November 2021. 23 “Members,” Net-Zero Banking Alliance, accessed March 2022; “TD Commits to Ambitious Climate Action Plan and Targets Net-Zero Emissions by 2050,” TD, 9 November 2020; “Nordea Sets Target to Become a Net Zero Emissions Bank by 2050,” Nordea Bank, 4 February 2021; “Goldman Sachs Update on Our 2030 Sustainable Finance Commitment,” Goldman Sachs, 4 March 2021; “Wells Fargo Sets Goal to Achieve Net Zero Greenhouse Gas Emissions by 2050,” Wells Fargo, 8 March 2021; “Addressing Climate Change,” Mizuho, accessed March 2022. 24 “MUFG Carbon Neutrality Declaration,” MUFG, 17 May 2021; “Members,” NetZero Banking Alliance, accessed March 2022. 25 “CIBC Declares Net Zero Ambition by 2050, Increases Sustainable Finance Target,” CIBC, 26 August 2021; “Commitment to Achieve Net Zero Emissions,” SMBC, 31 August 2021.
26 “Members,” Net-Zero Banking Alliance, accessed March 2022. 27 “43 banks Launch Net-Zero Banking Alliance as Key Part of Consolidated Glasgow COP Climate Action,” United Nations Environment – Finance Initiative, 21 April 2022.
28 “Net Zero by 2050: A Roadmap for the Energy Sector,” IEA, May 2021. 29 “Members,” Net-Zero Banking Alliance, accessed March 2022. 30 “COP26 Goals,” UN Climate Change Conference UK 2021, accessed March 2022.
31 “Members,” Net-Zero Banking Alliance, accessed March 2022; “Net Zero Banking Alliance Germany,” Green and Sustainable Finance Cluster Germany, accessed March 2022; Oil & Gas Policy Tracker, Reclaim Finance, accessed March 2022; Coal Policy Tool, Reclaim Finance, accessed March 2022.
32 “Net Zero by 2050: A Roadmap for the Energy Sector,” IEA, May 2021. 33 Oil & Gas Policy Tracker, Reclaim Finance, accessed March 2022. 34 Coal Policy Tool, Reclaim Finance, accessed March 2022. 35 Company sectors were determined using the Bloomberg Industry Classification System designation of the borrower or issuer, or of its parent company(ies). Only the primary sector designation was used.
36 “La Banque Postale Is Stepping Up Its Decarbonisation Strategy,” La Banque Postale, 14 October 2021.
37 Coal Policy Tool, Reclaim Finance, accessed March 2022. 38 “2019 – A Record Year for Credit Mutuel Alliance Federale Proof of Sustainable Collective Performance,” Crédit Mutuel, 20 February 2020, page 4. 39 Coal Policy Tool, Reclaim Finance, accessed March 2022; Coal Policy Tool, Reclaim Finance, accessed March 2022.
40 “Line 3 Fact Sheets,” StopLine3.Org, accessed March 2022; “Stop Enbridge’s Line 5,” Ganawendan Nibi, accessed March 2022.
ENDNOTES
BANKING ON CLIMATE CHAOS 2022 69
41 Jordan Blum and Janet McGurty, “ExxonMobil Leans on Permian, Guyana for Major Production Growth,” S&P Global, 2 March 2022.
42 Mark Armao, “Canada Sides With a Pipeline, Violating Wet’suwet’en Laws — And Its Own,” Grist, 18 November 2021.
43 See bankingonclimatechaos.org for lists of all oil and gas companies that were included in the expansion and sector league tables, as well as a methodology document that lists all the Bloomberg Industry Classification Standards included in the fossil fuel financing analysis.
44 “Global Oil & Gas Exit List,” urgewald e.V., November 2021; “Global Coal Exit List,” urgewald e.V., October 2021.
45 Rystad Energy’s UCube database is an exploration and production upstream database with reserves, production profiles, and economical figures for all fields, discoveries, and exploration licenses globally.
46 Three-quarters of the 100 companies selected are oil and gas companies, to account for the larger size of the oil and gas industry as compared to coal. Of those 75 companies, 80% were selected for their upstream activity, to weigh toward the companies most responsible for producing new oil and gas. 47 “Global Oil & Gas Exit List,” urgewald e.V., November 2021. 48 Ibid.
49 “Global Coal Exit List,” urgewald e.V., October 2021. 50 “Global Oil & Gas Exit List,” urgewald e.V., November 2021. 51 “Oil Pipelines,” Oil Sands Magazine, last updated 9 March 2022. Inter Pipeline is included as of its purchase of the Milk River Pipeline in June 2021, and Kinder Morgan is included through September 2018, when it was the owner of the Trans Mountain Pipeline. “Kinder Morgan Canada Limited - Trans Mountain Pipeline and Expansion Project Transaction Closes,” Trans Mountain, 31 August 2018. 52 This report uses the definition provided by the Arctic Monitoring & Assessment Programme (AMAP) of the Arctic Council, also used in the Global Oil & Gas Exit List.
This definition covers onshore and offshore oil and gas production in the High Arctic and sub-Arctic regions defined by AMAP. “Geographical Coverage,” AMAP, accessed January 2022.
53 “Global Oil & Gas Exit List,” urgewald e.V., November 2021. 54 “UCube,” Rystad Energy.
55 “Global Oil & Gas Exit List,” urgewald e.V., November 2021. 56 “Summary Tables,” Global Energy Monitor, 1 June 2021. 57 “Global Coal Exit List,” urgewald e.V., October 2021. 58 Ibid.
59 The Bloomberg Terminal is a ubiquitous provider of financial data available by subscription. Financial research was done using the Bloomberg Terminal’s league table function, which aggregates “creditable” transactions and assigns each leading bank (in an arranger or agent role) a portion of the value of the deal, according to the Bloomberg L.P. League Table Standards and Guidelines. The Bloomberg League Table Standards and Guidelines reference document is available to terminal subscribers.
60 IJGlobal is a project finance and infrastructure journal and data provider; see ijglobal.com.
61 Note that this method effectively undercounts figures in the league table for fossil fuel expansion, as the adjuster is based on current operations, while these companies are highlighted because of their large fossil fuel expansion plans that have yet to be developed. For companies in the top expanders list and their subsidiaries, annual adjusters were used in the overall fossil fuel league table. For all other companies, one adjuster was calculated and applied to all five years of data. 62 If the company was involved in other sectors in addition to oil and gas, the proportion of production was applied to the company’s reported oil and gas business segment(s)’s capital expenditure, assets, or revenue, as available. 63 Where a company was involved in activities other than energy generation and distribution, the coal-fired capacity percentage was applied to the electricity generation or power segment of the company as a percentage of total assets. 64 “Warming Projections Global Update,” Climate Action Tracker, November 2021, p. i.
65 Kai Kuhnhenn, Luis Costa, Eva Mahnke, Linda Schneider, and Steffen Lange, “A Societal Transformation Scenario for Staying Below 1.5° C: Summary,” Heinrich Böll Stiftung, December 2020, p. 3.
66 Mark Roelfsema et al., “Taking Stock of National Climate Policies to Evaluate Implementation of the Paris Agreement,” Nature Communications, 11, 2020, p. 2. 67 “Global Warming of 1.5°C: Headline Statements From the Summary for Policymakers,” IPCC, 2019.
68 Washington Post staff, “The Glasgow Climate Pact, Annotated,” The Washington Post, 13 November 2021.
69 Article 6 contends with international carbon markets and other methods of “voluntary cooperation” by which countries can meet their NDCs. One goal of COP26 was for parties to negotiate a “rulebook” for Article 6. “Cooperative Implementation,” UN Framework Convention on Climate Change, accessed February 2022; Charles E.
Di Leva and Scott Vaughan, “The Paris Agreement’s New Article 6 Rules,” International Institute for Sustainable Development, 13 December 2021. 70 See, e.g., Martin Cames et al., “How Additional Is the Clean Development Mechanism? Analysis of the Application of Current Tools and Proposed Alternatives,” Öko-Institut e.V., March 2016, p. 11; “The EU Emissions Trading System: Failing to Deliver,” Friends of the Earth Europe, October 2010; “Vallourec: Junk Offset Credits Through Charcoal Production for the Iron and Steel Sector in Brazil,” CORSIA, December 2020; Joe Sandler Clarke and Luke Barratt, “Top Airlines’ Promises to Offset Flights Rely on ‘Phantom Credits’,” Unearthed, 4 May 2021. 71 Kate Aronoff, “Shell Oil Executive Boasts That His Company Influenced the Paris Agreement,” The Intercept, 8 December 2018.
72 Juan Pablo Sarmiento Barletti and Anne M. Larson, “Rights Abuse Allegations in the Context of REDD+ Readiness and Implementation: A Preliminary Review and Proposal for Moving Forward,” Center for International Forestry Research, October 2017.
73 Kai Kuhnhenn, Luis Costa, Eva Mahnke, Linda Schneider, and Steffen Lange, “A Societal Transformation Scenario for Staying Below 1.5° C: Summary,” Heinrich Böll Stiftung, December 2020, p. 4.
74 Andrew Scott and Sam Pickard, “FAQ 1: Oil and Gas, Poverty and Energy Access,” ODI, accessed February 2022.
ENDNOTES
68 BANKING ON CLIMATE CHAOS 2022
75 Phoebe Cook, “Investigation: The Problem With Big Oil’s ‘Forest Fever’,” DeSmog, 6 July 2020.
76 Dallas Goldtooth, Alberto Saldamando, and Kyle Gracey, “Indigenous Resistance Against Carbon,” Indigenous Environmental Network and Oil Change International, August 2021.
77 Ibid., p. 12.
78 “International Covenant on Economic, Social and Cultural Rights,” Office of the UN High Commissioner for Human Rights, 3 January 1976, Article 1. 79 See, e.g., Mark Armao, “Canada Sides With a Pipeline, Violating Wet’suwet’en Laws — and Its Own,” Grist, 18 November 2021.
80 Dallas Goldtooth, Alberto Saldamando, and Kyle Gracey, “Indigenous Resistance Against Carbon,” Indigenous Environmental Network and Oil Change International, August 2021, p. 12.
81 “Specific Instance between Divest Invest Protect, Indigenous Peoples Law and Policy Program, Women’s Earth and Climate Action Network and Credit Suisse - United States Department of State,” U.S. Department of State, 31 August 2021; “Indigenous Women File OECD Specific Instance Against Credit Suisse for Rights Violations Regarding Pipeline Financing,” Women’s Earth & Climate Action Network International, 30 January 2020; “USA: Indigenous Women File OECD Specific Instance Against Credit Suisse for Rights Violations Regarding Pipeline Financing; Credit Suisse Responds,” Business & Human Rights Resource Centre, 25 May 2020. 82 “Exit Amazon Oil and Gas,” Stand.earth and Amazon Watch, accessed March 2022.
83 See, e.g., “Last Line of Defence: The Industries Causing the Climate Crisis and Attacks Against Land and Environmental Defenders,” Global Witness, September 2021.
84 “Watershed Decision Orders Shell to Slash Emissions to Respect Human Rights,” Center for International Environmental Law, 26 May 2021. 85 Bronwen Tucker and Nikki Reisch, “The Sky’s Limit Africa: The Case for a Just Energy Transition From Fossil Fuel Production in Africa,” Oil Change International, October 2021, p. 13; Greg Muttitt, “The Sky’s Limit: Why the Paris Climate Goals Require a Managed Decline of Fossil Fuel Production,” Oil Change International, 22 September 2016.
86 “World Energy Outlook 2021,” IEA, October 2021; “Net Zero by 2050: A Roadmap for the Energy Sector,” IEA, May 2021.
87 “History: From Oil Security to Steering the World Toward Secure and Sustainable Energy Transitions,” IEA, accessed March 2022.
88 David Tong, “Big Oil Reality Check: Assessing Oil and Gas Company Climate Plans,” Oil Change International, September 2020.
89 “bp to Exit Rosneft Shareholding,” bp, 27 February 2022. 90 Discussed in more detail in David Tong, “Big Oil Reality Check,” Oil Change International, September 2020.
BANKING ON CLIMATE CHAOS 2022 71
91 “Shell Accelerates Drive for Net-Zero Emissions With Customer-First Strategy,” Shell, 11 February 2021.
92 See, e.g., “The Production Gap Report 2021,” Stockholm Environment Institute, October 2021.
93 “Advancing Climate Solutions: 2022 Progress Report,” ExxonMobil, January 2022. 94 Yasmine Askari, “The Line 3 Replacement Has Been Completed and Operating for Months. So Why Are Activists Still Camped Out by the Construction Sites?,” MinnPost, 29 November 2021.
95 Financing information sourced from Bloomberg Finance L.P.; “Enbridge Publishes Sustainability-Linked Bond Framework,” Enbridge, 17 June 2021. 96 Project finance proportion assessed from the transaction data researched in this report; Oil & Gas Policy Tracker, Reclaim Finance, accessed March 2022. 97 Oil & Gas Policy Tracker, Reclaim Finance, accessed March 2022. 98 Eren Can Ileri, Henri Her, Alix Mazounie, and Lucie Pinson, “Drill, Baby, Drill:
How Banks, Investors and Insurers Are Driving Oil and. Gas Expansion in the Arctic,” Reclaim Finance, September 2021.
99 Ibid., p. 31.
100 Oil & Gas Policy Tracker, Reclaim Finance, accessed March 2022 101 “What Is Deepwater and Ultra Deepwater Drilling?,” Enhanced Drilling, accessed March 2022.
102 Richard Pallardy, “Deepwater Horizon Oil Spill,” Encyclopedia Britannica, last updated 30 November 2021.
103 Oil & Gas Policy Tracker, Reclaim Finance, accessed March 2022. 104 “World Energy Outlook 2021,” IEA, October 2021, p. 102. 105 Victoria Zaretskaya, “U.S. Liquefied Natural Gas Export Capacity Will Be World’s Largest by End of 2022,” U.S. Energy Information Administration, 9 December 2021 (Download the spreadsheet at the bottom of the page for a look at all the approved terminals that could begin construction once they reach a Final Investment Decision.) 106 Sam Reynolds and Grant Hauber, “IEEFA: Emerging Asia’s Unrealistic LNG-toPower Project Pipeline Threatens Macroeconomic and Financial Stability,” Institute for Energy Economics and Financial Analysis, 15 December 2021. 107 Coal Policy Tool, Reclaim Finance, accessed March 2022. 108 For more on how financial institutions must align with the Paris Agreement, see “Principles for Paris-Aligned Financial Institutions: Climate Impact, Fossil Fuels and Deforestation,” Rainforest Action Network, 16 September 2020. 109 David Feliba and Rehan Ahmad, “The World’s 100 Largest Banks, 2021,” S&P Global, 12 April 2021.
PHOTO : Erik McGregor / SIPA USA
Each dollar that banks put toward new fossil
fuel projects and the companies behind
them is incompatible with climate stability
and their own net-zero commitments.
72 BANKING ON CLIMATE CHAOS 2022
ENDORSEMENTS
This report is endorsed by 504 organizations
from 51 countries around the world:
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BANKING ON CLIMATE CHAOS 2022 73
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Seneca Lake Guardian
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Sisters of Charity of Saint Elizabeth Office of
Peace, Justice, & Ecological Integrity
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Solidarité pour la Réflexion et Appui au
Développement Communautaire
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Istot
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Texas Campaign for the Environment
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The Climate Optimist
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The Shalom Center
74 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS Page 581 of 630 2022 75
76 BANKING ON CLIMATE CHAOS 2022 BANKING ON CLIMATE CHAOS 2022 77 The authors believe the information in this report comes from reliable sources and that the data analysis is sound, but do not guarantee the accuracy, completeness, or correctness of any of the information or analysis. The authors disclaim any liability arising from use of this report and its contents. Nothing herein shall constitute or be construed as an offering of investment advice. You should determine on your own whether you agree with the content of this document and any information or data provided.
This report was a joint effort between Rainforest Action Network (RAN), BankTrack, Indigenous Environmental Network (IEN), Oil Change International (OCI), Reclaim Finance, Sierra Club, and urgewald.
ACKNOWLEDGEMENTS
DISCLAIMER
Contributing authors and researchers:
Alison Kirsch, Rainforest Action Network
Grant Marr, Rainforest Action Network
Jason Opeña Disterhoft, Rainforest Action Network
Henrieke Butijn, BankTrack
Johan Frijns, BankTrack
Maaike Beenes, BankTrack
Alberto Saldamando, Indigenous Environmental Network
Mea Johnson, Indigenous Environmental Network
Collin Rees, Oil Change International
David Tong, Oil Change International
Kyle Gracey, Oil Change International
Lorne Stockman, Oil Change International
Clément Faul, Reclaim Finance
Maude Lentilhac, Reclaim Finance
Ryan Cooper, Reclaim Finance
Yann Louvel, Reclaim Finance
Adele Shraiman, Sierra Club
Ben Cushing, Sierra Club
Julia Dubslaff, urgewald
Katrin Ganswindt, urgewald
Report design:
Toben Dilworth, Rainforest Action Network
Additional research provided by:
Léa Pham Van, Profundo
Ward Warmerdam, Profundo
The Wilderness Society
The YEARS Project
Third Act
Third Act Virginia
Thomas Berry Forum for Ecological Dialogue at
Iona College
TIAA-DIVEST!
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Development
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County Texas
Unitarian Universalist Mass Action
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Unite North Metro Denver
United Church of Christ Environmental Justice
Ministry
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United Native Americans
United Student Leaders
Uplift
Upper Valley Affinity Group
Vermont Yankee Decommissioning Alliance
Veterans for Climate Justice
Veterans For Peace Linus Pauling Chapter 132
Voices Of Community Activists & Leaders New
York
Wahana Lingkungan Hidup Indonesia South
Sulawesi / Friends of the Earth Indonesia South
Sulawesi
Wall of Women Colorado
Waterkeeper Alliance
We Are Here Venice
Weald Action Group
West Coast Environmental Law Association
West Kootenay Climate Hub
Westchester Peace Action Committee
Foundation
Western New York Environmental Alliance
Western Slope Businesses for a Livable Climate
White Rabbit Grove RDNA
Women Environmental Programme
Women Without Roofs Nepal
Women’s Earth & Climate Action Network
Women’s Institute for Freedom of the Press
Womxn from the Mountain
Working for Racial Equity
World Centric
Yayasan Pusaka Bentala Rakyat
Youth Advocates for Climate Action Philippines
/ Fridays for Future Philippines
Youth Climate Finance Alliance
Youth United for Climate Crisis Action
Zero Hour
Zero-Carbon Energy Development &
Information Centre
ENDORSEMENTS (CONT’D)
PHOTO : Jake Conroy / RAN
PUBLICATION DATE : March 30, 2022
FOSSIL FUEL FINANCE REPORT 2022
BankingonClimateChaos.org
Florida Will Pull $2 Billion of Assets From BlackRock Over ESG By Danielle Moran and Saijel Kishan
December 1, 2022
Bloomberg
https://news.yahoo.com/florida-pull-2-billion-assets-180630120.html Florida will pull $2 billion worth of state assets managed by BlackRock Inc., accelerating Republicans’ fight with the world’s largest money manager over its ESG investing practices.
The state treasury will immediately have Florida’s custody bank freeze about $1.43 billion worth of long-term securities and remove BlackRock as the manager of approximately $600 million worth of short-term overnight investments, Florida Chief Financial Officer Jimmy Patronis said in a statement on Thursday. The pullback is the latest step in a broader fight led by Republican Governor Ron DeSantis against corporations that embrace environmental, social and corporate governance values.
“I need partners within the financial services industry who are as committed to the bottom line as we are – and I don’t trust BlackRock’s ability to deliver,” Patronis said in the statement. “Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for,” he said. “It’s got nothing to do with maximizing returns and is the opposite of what an asset manager is paid to do. Florida’s Treasury Division is divesting from BlackRock because they have openly stated they’ve got other goals than producing returns.” Reuters reported Florida’s planned divestiture earlier. The Florida Department of Financial Services manages approximately $60 billion in taxpayer money.
Ed Sweeney, a spokesperson for New York-based BlackRock, said the firm is “surprised” by the decision given the strong returns the company has delivered for Florida the last five years.
ESG Trigger
Republicans are ratcheting up attacks on environmental, social and governance investing this year. BlackRock, which oversees $8 trillion globally, is a major proponent of the strategy and has been a prime target for the GOP. Louisiana and Missouri have pulled a combined $1.3 billion from BlackRock this year. And in August, Texas included the firm on a list of those it says boycott the energy industry.
Read More: BlackRock, UBS Ask to Be Removed From Texas’ Energy Boycott List “Neither the CFO nor his staff have raised any performance concerns,” BlackRock’s Sweeney said in a statement. “We are disturbed by the emerging trend of political initiatives like this that sacrifice access to high-quality investments and thereby jeopardize returns, which will ultimately hurt Florida’s citizens. Fiduciaries should always value performance over politics.”
Read more: DeSantis Amps Up ESG Attack, Banning Strategy for State Pensions Back in August, DeSantis and other state officials passed a resolution calling for state funds to be invested without considering the “ideological agenda” of the ESG movement. “The tax dollars and proxy votes of the people of Florida will no longer be commandeered by Wall Street financial firms and used to implement policies through the board room that Floridians reject at the ballot box,” DeSantis said at the time.
The move follows other similar clashes with corporate giants, such as PayPal Holdings Inc. and Walt Disney Co. DeSantis is seen as a key rival of Donald Trump for the 2024 Republican presidential nomination. The governor won a landslide re-election victory in November promising to battle what he called “woke ideology” being promoted by Wall Street banks, asset managers and big-tech companies in Florida.
On Wednesday, BlackRock’s Fink said he’s been working to counter criticism from across the political spectrum for BlackRock’s support of sustainable investing. Republicans have retaliated against his firm’s embrace of what they’ve described as “woke” capitalism, while Democrats and environmental activists have targeted BlackRock for investing in fossil-fuel producers.
Against that backdrop, BlackRock poured record amounts of money into US political campaigns this year. Fink said Wednesday that he has been spending a lot of time in Washington to “correct the narrative.”
--With assistance from Felipe Marques and Shelly Hagan.
Fossil fuels are a losing bet. Why are CalPERS & CalSTRS still investing in them? | Opinion
By James Stone
April 9, 2023
Sacramento Bee
https://www.yahoo.com/news/fossil-fuels-losing-bet-why-130000606.html Over the last decade, Californians have experienced intensifying fires, deadly heat and deepening drought. Record-breaking floods have swept through our communities, taking the lives of at least 22 people, devastating thousands of homes and costing over $1 billion in damages. In 2022, climate damages surpassed $165 billion in the U.S. alone, and the reinsurance firm Swiss Re predicted that if world temperatures are allowed to rise to 3.2° Celsius, the global economy’s gross domestic product will decline by at least 18%.
For all of those reasons and many more, California’s legislators must pass Senate Bill 252 this year to ensure that CalPERS and CalSTRS, our state’s pension funds, stop financing climate chaos that is destroying the communities, homes and lives of Californians, including pension beneficiaries.
Executives at fossil fuel companies like Exxon knew about the devastating impacts of extracting, transporting and burning coal, oil and gas more than 40 years ago. Now, as fossil fuel corporations rake in record profits, Californians are bearing the costs of their lies. When Californians passed legislation to reign in fossil fuel damages to our communities, fossil fuel companies spent over $20 million to overturn the will of the people.
It’s not only major oil companies that are responsible. As the two largest public pensions in the nation, with $440 billion and $306 billion in respective assets, CalPERS and CalSTRS collectively represent over 3 million members and their families, including public employees, teachers, firefighters and first responders. Yet the state’s pensions are bankrolling over $14 billion in fossil fuel assets, effectively enabling the very climate catastrophe its membership is responding to on the frontlines.
Fossil fuels are a losing investment. Reports reveal that CalPERS and CalSTRS would have generated an additional $11.9 billion and $5.5 billion respectively by 2019 had they divested from fossil fuels in 2009. That’s that equivalent of $6,072 per CalPERS member and $5,752 per CalSTRS member.
To date, over 1,550 institutions representing more than $40 trillion in assets have committed to divest. This includes New York State’s Common Retirement Fund, the Bank of England and ABP, one of the world’s largest pension funds. There’s a growing group of pension decisionmakers who conducted independent, rigorous climate risk assessments, and even those who previously doubted divestment ultimately chose to divest.
If SB 252 passes, California would become the third state to divest from fossil fuels, alongside Maine and New York. Sponsored by Sen. Lena Gonzalez, the bill ensures that we don’t sacrifice investment performance. We have the opportunity to seize the momentum of the worldwide divestment movement and end contradictory policies positioning California as a climate leader while our pensions continue to invest billions in the fossil fuel companies causing the climate crisis.
This legislation comes as fossil fuel-funded politicians peddle anti-environmental legislation and false, politically-motivated claims, costing taxpayers millions. It’s time for legislators to listen to their constituents — the people of California — and not the fossil fuel lobby and their think tanks.
CalPERS and CalSTRS’ shareholder sustainability engagement record is abysmal. Pension executives claim they’re engaging with fossil fuel corporations, but this is a proven futile strategy. Moreover, they voted against all climate resolutions at North American banks last year.
SB 252 is about more than divesting from fossil-fueled chaos. It’s about requiring CalPERS and CalSTRS to meet their fiduciary duty to protect the future of not only the funds they manage, but of the lives and livelihoods of Californians and pension beneficiaries everywhere.
James Stone is a professor of political science at Mt. San Antonio College and the author of “Populism, Eco-Populism and the Future of Environmentalism.”
WHO’S
MANAGING
YOUR FUTURE?
An assessment of asset
managers’ climate action
2 WHO’S MANAGING YOUR FUTURE?
An assessment of asset managers’ climate action
Authors and contributors:
Lara Cuvelier, Ryan Cooper, Maude Lentilhac, Nathan Guillot, Agathe Masson:
Reclaim Finance
Casey Harell, Alex Wilks, Alice Delemare Tangpuori: The Sunrise Project Jessye Waxman, Mahima Dave: Sierra Club
Layout:
Jordan Jeandon
Graphic designer:
Guénolé Le Gal
Publication date:
June 2023
3 TABLE OF CONTENTS
Scope of the report and analysis grid 8
1. Asset managers pour cash into fossil fuel expansion via the bond market
a. Investments keep flowing to newly issued bonds
b. Fossil fuel bond holdings: a hidden carbon bomb?
10 10
16 2. Existing engagement activities will not decarbonize the economy a. Weak policies fail to influence coal, oil and gas companies b. Poor policies mean poor results
18 18
24 Appendix 1 : Methodology
1. Financial research
2. Policy analysis section
30 30
32 Appendix 2 : Financial research details 34
Executive summary 4
3. Asset manager evaluation table 26
4. Our recommendations to asset managers 28
Key findings 6
4 5
EXECUTIVE SUMMARY
This report, the third annual edition,
takes a deep dive into the policies and
practices of 30 big asset managers.
The aim of our research is to provide an
assessment of how these firms manage
climate risk - in particular, looking at how they
ensure they manage their assets for the long
term and align with a 1.5°C target,1
assessing
whether their activities are aggravating
the climate crisis and therefore other
associated systemic risks. For those asset
managers claiming to have made net zero
commitments, this must imply an immediate
change in practice, ending support for fossil
fuel expansion and sanctioning polluters who
continue with activities that are incompatible
with limiting global warming to 1.5°C.
The analysis grid for this report focuses on the
primary ways in which asset managers have
an impact on the climate: their investment
decisions in the bond market and how they act
as shareholders. For the first time, we publish
data on investments these asset managers
have made in bonds recently issued by fossil
fuel developers. This data sheds light on how
when asset managers lend money to fossil
fuel companies without any requirement
to put an end to their expansion plans, they
are directly and actively contributing to
fossil fuel expansion. This report, based
on independent research and a survey of
the 30 asset managers, also reveals how
asset managers fail to sanction polluting
companies for not acting on decarbonization.
This failure, due to poor policies, undermines
the engagement activities of many of these
asset managers’ biggest clients: institutional
investors. We therefore encourage these
clients to use our results to question their
links with asset managers and the influence
they could have on them.
Asset owners must pick asset managers
for the long term
The findings of this report must be a wake up call for asset owners, who are entrusting their money to large asset managers working against their interests. Many pension funds, insurance companies, and other asset owners, say that they intend to pick managers that act in line with their long-term interests, including action to mitigate climate change.2 This is
crucial because asset managers “not only allocate assets, but also conduct corporate engagements, cast proxy votes (notably on directors and climate resolutions), and have an important voice in the business community”, as explained in the Net Zero Asset Owner Alliance’s Future of Engagement paper.
Asset owners must reassess which asset managers they agree to work with and ensure their interests are aligned, as asset managers’ short-term considerations often eclipse the long-term interests of their clients. It’s time for asset owners to demand robust default policies that provide a strict framework for investment practices, including rules for companies involved in fossil fuel expansion, and to publish clear deadlines for shifting their business to fully-aligned asset managers.
We hope this report can be used as a tool to do so.
KEY FINDINGS
Asset managers are pouring cash
into fossil fuel expansion via the bond
market
At the parent (or group) level, the 30 asset managers
included in this report invested at least $3.5 billion in 74 newly issued bond securities3 from companies actively
engaged in fossil fuel expansion.
The biggest recent bond issuances by fossil fuel developers that we were able to identify on Bloomberg were from
Freeport Indonesia PT, China National Petroleum Corp
(CNPC), BP, ConocoPhillips and Eni. We identified that 20 of the 30 asset managers are currently invested in at least one of them.
Existing engagement activities will not
decarbonize the economy
Of the 20 asset managers that have a coal sector policy setting out their expectations and restrictions, only 10 restrict investments in companies based on their expansion plans. Of these, only 4 (AXA IM, DWS, M&G, Ostrum) define expansion plans as new projects for the entire coal value chain (mines, plants, infrastructure), while the others focus only on some parts of the value chain.
Among the 12 asset managers that have an oil & gas sector policy setting out their expectations and restrictions, only one (Ostrum) has any measures in place to induce companies to stop their oil and gas expansion plans, although we assess these measures as weak.
While 25 asset managers set out high level and basic climate-related expectations for portfolio companies, only 7 go further and describe more precise and strategy-level expectations for fossil fuel companies.
While 7 have clear and robust expectations for coal companies,7 Ostrum
is the only asset manager assessed that has published a clear expectation that companies should stop their oil and gas upstream expansion plans and states that this expectation can lead to defined sanctions.8 This means that the majority of these 30 major asset managers do not currently sanction polluting companies for failing to take the right steps for the climate, because they do not systematically apply sanctions to signal their redlines.
Poor policies mean poor results: the
CA100+ example
After five years of intensive dialogue by investors from the CA100+ initiative, only 20% of the companies from the coal mining and oil and gas sectors that have been engaged have even set an ambition to achieve net zero emissions by 2050.
Only 14% of the companies have set a target for reducing their greenhouse gas (GHG) emissions by 2025 that covers at least 95% of Scope 1 and 2 emissions and the most relevant Scope 3 emissions. Even worse, only two of the companies are working to decarbonize their capital expenditures.
Fossil fuel bond holdings are a hidden
carbon bomb
The 30 asset managers analyzed held US$597 bn in bonds
and shares in the biggest fossil fuel developers4 as of January 2023. This is made up of 92% in equity holdings and 8% in bond holdings.5
The bond holdings we report are likely to be heavily underestimated, mainly because of transparency rules.6 They nevertheless illustrate the strong presence of many big asset managers on the fossil fuel bond market and show how this is helping these companies to raise capital more easily.
1 2
3 4
6 7
We surveyed 30 major asset managers,
headquartered in Europe (25) and in the
US (5) and among the biggest institutions
worldwide in terms of assets under
management.9 We analyzed their practices
regarding climate change, focusing on the
fossil fuel sector as the priority sector to
tackle. Our analysis has a specific focus on
fossil fuel expansion as putting an end to new
fossil fuel projects is essential to avoid the
worst effects of climate change and to remain
on a 1.5°C pathway.10 We have evaluated the
30 asset managers based on a survey11 that
was sent to them in April 2023.
The analysis grid for this report narrows
in on how asset managers have an impact
on real-world emissions reductions. This
report looks at whether they are taking the
most critical steps to deliver on their net zero
commitments: using their power in the bond
markets, especially during capital rounds,
and using their power as shareholders,
with all the tools at their disposal to set
and communicate the right expectations to
polluting companies. Together these embody
the primary ways in which asset managers can
credibly affect outcomes that reduce climate
impacts on society and reduce the growing
systemic risks posed by climate change.
The first part of this report (section 1.)
analyzes the bond holdings of these asset
managers, with a focus on investments in
SCOPE AND
ANALYSIS GRID
8 9
Key information on the 30 asset managers assessed
in this report:
• They represent a total of €37.5 trillion in assets under management as of December 2022;
• Almost 40% of these assets are currently passively managed; • Ech investor represents at least €200 billion in assets under management. 9 asset managers manage more than €1 trillion;
• This sample consists of the 25 biggest asset managers headquartered in Europe and the 5 biggest asset managers headquartered in the US. bonds that have been recently issued by the
world’s biggest fossil fuel developers. The
second part (section 2.) evaluates their fossil
fuel sector policies, with a focus on how
they set the right expectations for portfolio
companies, communicate them to companies
and escalate action.
10 11
1. ASSET MANAGERS POUR
CASH INTO FOSSIL FUEL
EXPANSION VIA THE BOND
MARKET
Time is of the essence. The window of
opportunity for a 1.5°C pathway is limited,
and the next year and a half will be
crucial, as global GHG emissions must peak by
2025. But despite repeated calls from climate
scientists and international bodies to decrease
fossil fuel production, current production trends
are not headed in the right direction. In fact,
most of the companies within the industry
still have expansion plans and will not reduce
their overall production levels. 96% of oil and
gas companies are still exploring or developing
new oil and gas fields and 490 companies are
still planning to expand the coal industry.12
These companies’ strategies will only make
the climate crisis worse, as it has been clearly
established by the Intergovernmental Panel on
Climate Change (IPCC) when it indicates that
putting an end to new fossil fuel projects is
essential to avoid the worst effects of climate
change.13 On the other hand, the International
Energy Agency (IEA) states that it is possible to
meet the world’s energy needs and limit global
warming to 1.5°C without them.14 Fossil fuel
expansion is therefore a key driver of systemic
climate risk. For financial institutions, this risk
is not only a systemic financial risk to portfolios
but an existential risk to their fundamental
businesses.
a. Investments keep flowing
to newly issued bonds
For fossil fuel expansion to stop and production
to start decreasing, the financing behind it
must stop. And as a significant proportion
of this financing comes from bonds,15 asset
managers’ role in this financing is clear.
Investors’ support is crucial to companies,
making them a key lever in steering the world
away from high-carbon activities. There are
many powerful tools they can use to push the
largest carbon emitters to change. Investors can
use their power as shareholders, that include
all the tools that are generally associated with
engagement,16 but they first and foremost
should use their full power in the bond markets,
especially considering the growing importance
of bonds issuance as a source of financing for
fossil fuel companies.17 Furthermore, as the vast
majority of the largest corporate emitters use
the bond market, bonds are another way into
companies that are inaccessible or difficult to
reach via traditional shareholder mechanisms,18
as it the case for state-owned fossil fuel
companies such as Saudi Aramco.19 Bonds are
used both by listed and non-listed companies,
which broadens the scope of companies that
can be reached.
As bonds contribute to fossil fuel expansion,
not using their bond market power to drive
climate action would mean investors are
responding to the climate emergency with
one hand tied behind their backs.20 Using
such power starts with refusing to buy bonds
from companies engaged in activities that
are clearly incompatible with a 1.5°C pathway,
such as those involved in fossil fuel expansion.
Adopting redlines for bond purchases is key to
influencing the largest corporate greenhouse
gas emitters, as advocated by the Principles of
Responsible Investments (PRI).21
We extracted the investments of the 30 asset
managers at the parent (or group) level in a
list of newly issued fossil fuel bonds (issued
in the past 18 months). All the bonds we
included in this research are issued by fossil
fuel developers. We call ‘fossil fuel developers’
in this report companies developing new coal
projects or having oil & gas upstream expansion
plans - see Methodology section (Appendix #1)
for more details. While these bond investments
are not necessarily all primary market financing
(for which information is not available on the
Bloomberg Terminal), they are investments
in newly-issued bonds and thus contribute
to helping these companies raise capital.
Indeed, a company will more easily raise capital
if its corporate bonds are easily traded on the
secondary markets.22 Furthermore, as most of
the 30 asset managers analyzed have passive
funds,23 these investments in newly issued
bonds are more likely to have been primary
market investments made through these
passive funds. Indeed, as evidenced by research
by the Oxford Sustainable Finance Programme,
passive funds not only hold fossil fuel assets, but
directly finance them by buying large quantities
of new bonds as they are issued by fossil fuel
companies on the primary market.24
New findings show which asset managers are still
investing in the newly-issued bonds of the world’s biggest fossil fuel developers
We conducted research on the Bloomberg Terminal to track down investments in bonds that were recently issued by a list of fossil fuel developers (see Methodology section (Appendix #1) for more details). As bond data is highly incomplete on the Terminal, our research is likely to be a stark underestimation of the flows going to newly issued bonds. It is important to note that the data featured below is at the investor parent level (e.g. holdings for DWS are reported under Deutsche Bank and could include holdings from other asset management subsidiaries of the group) as the Bloomberg API does not enable sufficient granularity at the manager and fund level. Nonetheless, it is a good indication and estimation of which asset managers are likely to be directly funding these companies.
• The parent groups of the asset managers in this report invested at least US$3.5 billion in newly-issued bonds25 (issued in the past 18 months) from 38 companies actively engaged in fossil fuel expansion.
• Vanguard is the top investor in such bonds with US$1.2 billion invested in 18 fossil fuel developers, followed by BlackRock with US$851 million in 22 fossil fuel developers.26
• BPCE Group (the parent group of Natixis IM and its affiliates Ostrum and Loomis) is the top European investor in such bonds with US$122 million invested in bonds recently issued by 14 fossil fuel developers.27 Whilst we do not have data at manager level for these recent bonds, as previous research28 that 84% of BCPE’s bond exposure to fossil fuel developers comes from its affiliate Loomis, it is likely that Loomis holds a significant share of the US$122 million. • The biggest recent bond issuances by fossil fuel developers that we were able to identify on Bloomberg were from Freeport Indonesia PT, China National Petroleum Corp (CNPC), BP, ConocoPhillips and Eni. We identified that 20 of the 30 asset managers are currently invested in at least one of them.
See more bonds data in Appendix #2.
12 13
As we show below in the policy analysis
section, these investments, which are
essentially fresh cash for a company, are
made without any conditions or strings
attached. This strongly questions the
credibility and effectiveness of the “dialogue”
that ESG engagement specialists at asset
managers are leading with companies. The
policy analysis section (see section 2.) reveals
for example that while 10 of the 30 asset
managers deny debt to coal developers, none
are doing the same for the oil and gas sector.
This means that asset managers are leaving
aside a powerful tool to push big polluters
to change. And beyond missing out on this
powerful tool, it might mean that they are
exposing their clients to stranded asset
risks.29 Indeed, studies show that the fixed
income market does not yet fully incorporate
climate risk in oil and gas debt pricing.30
This chart represents the holdings of 12 investors in a selection of newly issued bonds (issued between 01.01.2022 and 19.05.2023) of 10 fossil fuel developers. The financial institutions featured on the left side of the diagram are the 12 investors with the overall biggest holdings in the newly issued bonds we identified on Bloomberg. The companies featured on the right side are the companies that issued the biggest bonds among those that we identified on Bloomberg.
This chart represents the holdings of 11 asset managers in bonds issued recently by ConocoPhillips (between 01.01.2022 and 19.05.2023). ConocoPhillips Vanguard
BlackRock
JPMorgan Chase
Allianz
State Street
Invesco
UBS
Abrdn
Deutsche Bank
Groupe BPCE
Asset
manager
Company
This chart represents the holdings of 10 asset managers in the latest bond issued by TotalEnergies (on 10.01.2022).
Company
TotalEnergies SE
BlackRock BlackRock
Schroders Schroders
Invesco Invesco
DZ Bank DZ Bank
Credit Agricole Group Credit Agricole Group
Allianz Allianz
BNP Paribas BNP Paribas
HSBC
Deutsche Bank Deutsche Bank
Credit Suisse Credit Suisse
Asset
manager
Investments flowing into newly issued bonds
Investments in the latest ConocoPhillips and TotalEnergies bonds
14 15
16 17
b. Fossil fuel bond holdings:
a hidden carbon bomb?
Overall, the 30 asset managers analyzed held
US$597 billion in bonds and shares of the
biggest fossil fuel developers31 as of January
2023. This is made up of 92% in equity holdings
and 8% in bond holdings.32 BlackRock is the top
bondholder of the biggest fossil fuel developers
(US$13.4 billion) and UBS AM is the top European
bondholder (US$1.6 billion), followed closely by
Amundi (US$1.2 billion).
While the bond holdings seem relatively small,
as bonds are the main source of capital raising
for fossil fuel companies,33 these holdings are
far from being incidental. Indeed, if a fossil fuel
developer has popular bonds, it will actually be
easier for the company to raise capital. There is a
link between demand for a bond in the secondary
market and the decision of an issuer to issue new
bonds (if the demand for a bond on secondary
markets is high, the company is more likely to
be able to issue new bonds).34 Furthermore, for
passive funds, it has been shown that there is a
direct link between portfolio holdings and their
investments in newly issued bonds - including in
their primary market investments.35 With passive
funds, investments keep flowing in newly issued
bonds because of the existing stocks. For carbonintensive sectors, a study suggests that new bonds will increasingly be bought by passive
funds as active investors avoid riskier carbonintensive assets.36 The study concludes that asset owners concerned about financing carbon
lock-in should consider the interplay between
portfolio holdings and portfolio flows.
CASE STUDY
How asset managers help Adani
fund its expansion plans
The Indian conglomerate Adani is one of the world’s most problematic coal companies.
It is involved in 12 GW of new coal power plants in India and in 8 coal mining expansion plans, making it one of the world’s biggest coal plant and coal mine developers. Adani’s unethical practices have been widely denounced as well as its coal expansion plans, that are destroying the land of indigenous communities in India or Australia. Severe controversies surround the Adani Group subsidiaries activities.41 Any financial support to the Adani Group is highly incompatible with a net zero commitment or any sustainability claim.
Our data reveals that support to Adani remains unquestioned:
• he 30 asset managers currently hold42 US$2.5 billion in the Adani entities that have links with coal activities according to the Global Coal Exit List.43 • The top investors are BlackRock, Vanguard and State Street Global Advisors which together hold US$2 billion in Adani bonds and shares.
• Of the 13 asset managers for which voting data was available for 2022, 10 voted “for” the reelection of Rajesh S. Adani as Director of Adani Enterprises.44 All but one approved the allocation of dividends.45
Furthermore, the figures above are a stark underestimation of the investments that might be supporting Adani’s coal business. Many of the asset managers have holdings in Adani Green Energy (e.g. Amundi, BlackRock, UBS AM and M&G) or in other Adani entities that are not directly linked to the coal expansion plans of Adani. But allegations that the company is moving money between entities are not new, as reported in an investigation from 2019,46 in a webinar held by Market Forces and Responsible Investor in 202147 and more recently the Hindenburg research.48 Recent public filings also make clear that Adani is using stock from its Green companies as collateral in a credit facility that’s helping to finance the Carmichael coal mine in Australia, via Adani Enterprises Ltd.49 Investments in the Adani Group are incompatible with the net zero commitments taken by the vast majority of the asset managers. And while many asset managers have excluded, via their coal policies, some Adani subsidiaries from their portfolios, most have not excluded all Adani entities.
This case should be a clear reminder to asset managers and their clients that they must assess companies at the parent group level and question whether investing in a “green” subsidiary is not at risk of supporting the expansion plans of the company.
Total holdings in fossil fuel developers,37 as of January 2023 Asset manager Bondholding
(US$ million)
Shareholding
(US$ million)
Total
(US$ million)
BlackRock 13 364 166 172 179 536
Vanguard 11 906 158 380 170 286
State Street Global Advisors 1 448 84 731 86 179
JP Morgan AM 2 705 23 073 25 778
Invesco Limited 1 308 16 357 17 665
Amundi Asset Management 1 241 14 296 15 537
LGIM 403 11 346 11 749
UBS AM 1 574 9 202 10 776
DWS 883 9 371 10 254
Schroders 972 7 812 8 784
Credit Suisse Asset Management 568 6 871 7 439
HSBC Asset Management 734 4 285 5 019
Fidelity International 1 027 3 661 4 687
Allianz (PIMCO) 3 926 585 4 511
Aviva Investors 964 3 501 4 465
Natixis IM38 984 6 328 7 312
M&G Investments 705 3 530 4 235
abrdn 713 3 317 4 031
Allianz (AGI) 1 064 2 825 3 889
Union Asset Management Holding AG 262 2 966 3 228
BNP Paribas Asset Management 287 2 679 2 962
Algemeen Burgerlijk Pensioenfonds (ABP) 142 2 507 2 649 Aegon Asset Management 1 219 727 1 946
Eurizon Capital 438 1 396 1 834
Ostrum Asset Management 4 1 774 1 778
AXA IM 296 716 1 012
Loomis Sayles 923 87 1 009
Nordea Investment Funds - AM 16 426 442
Generali Investments39 167 172 338
Insight Investment - BNY Mellon 84 63 147
Total40 49 399 547 291 596 691