Bank adds language recognizing crisis but adds only limited restrictions on coal power financing; ignores oil and gas finance
(San Francisco, April 22, 2019) — Bank of America has squandered an opportunity to reclaim a climate leadership role within the finance community by releasing an updated Environmental and Social Risk Policy Framework that places only very incremental restrictions on the bank’s funding in the fossil fuel sector. The banking giant remains woefully far from aligning its policies with the Paris Agreement’s goals of limiting the increase in global average temperature to well below 1.5 °C despite clearly acknowledging the critical need to do so.
“Bank of America’s new environmental policy has no teeth,“ said Elana Sulakshana, Energy Finance Campaigner at Rainforest Action Network. “The partial prohibition on coal power project finance allows the bank to continue funding new coal plants. It is nowhere close to meeting the urgency and requirements of the Paris Agreement.”
The bank has simply followed its U.S. peers in setting forth weak coal power policies that allow for the continued financing of new coal plants. It does not restrict oil and gas financing at all. This new policy solidifies the position of all major U.S. banks as laggards in the race to stop the catastrophic impacts of climate change such as extreme weather events, food shortages, rising sea levels, drought and increasing wildfires.
In 2015, Bank of America was the first major global bank to adopt a policy restricting coal mining financing, but their updated Environmental and Social Risk Policy Framework makes clear that Bank of America no longer aspires to lead.
Though the framework now includes explicit language that supports the Paris Agreement, Bank of America was the fourth largest global banker of fossil fuels since the climate agreement was adopted in 2016. The bank financed coal, oil, and gas with $106.7 billion from 2016 to 2018, according to Banking on Climate Change 2019.
The bank funded the 30 biggest global coal power companies to the tune of $2.8 billion over that period — with financing increasing each year. Only 4% of that total was in the form of project finance. The bank’s new partial prohibition on coal power project finance is nowhere close to meeting the scale of the climate crisis