The article in the url below contains a headline that I don't see very often:
"Bank of America Pledged to Stop Financing Coal. Now It's Backtracking."
What strikes me about it that is different is not that companies are not taking climate change seriously or that they are saying one thing and then doing the opposite (both of which have always been true), but that they feel comfortable saying so, so directly. In other words, backtracking like this is exposed by the media, all the time, but it is rare to see the company announce its own backtrack:
"Two years ago, Bank of America won kudos from climate activists for saying it would no longer finance new coal mines, coal-burning power plants or Arctic drilling projects because of the toll they take on the environment. The bank's latest environment and social-risk policy reneged on those commitments. The policy, updated in December, says that such projects will instead be subject to 'enhanced due diligence.'"
I know there has been a backlash against the label "ESG" (correct impulse, but orchestrated for all the wrong reasons; see Strategic CSR – ESG and Strategic CSR – Green-hushing), but that is different from backtracking on a commitment not to fund fossil fuel projects. The reasoning, according to the article, is the same as the pushback against ESG, in general – I just would have thought Bank of America could have made a meaningful distinction among its stakeholders (and those it perceives to be most important):
"Bank of America's change follows intensifying backlash from Republican lawmakers against corporations that consider environmental and social factors in their operations. Wall Street in particular has come under fire for what some Republicans have called 'woke capitalism,' a campaign that has pulled banks into the wider culture wars."
While the backlash against ESG and related initiatives is a general phenomenon (at least, here in the U.S.), it seems particularly virulent in the finance industry, whether targeted against investment funds or the banks that finance large infrastructure projects:
"States including Texas and West Virginia have passed financial regulations designed to ward off efforts to deny fossil-fuel companies access to banking services. In New Hampshire, state lawmakers have sought to criminalize the business principle known as E.S.G., shorthand for environmental, social and governance."
The shift by Bank of America, in particular, is quite dramatic:
"Bank of America said in a statement that clients or transactions 'that carry heightened risks will continue to go through an enhanced due diligence process involving senior level risk review.' In late 2021, the bank's policy stated that it 'will not directly finance new thermal coal mines or the expansion of existing mines' or 'petroleum exploration or production activities in the Arctic.' It also would not 'directly finance the construction or expansion of new coal-fired power plants, including refinancing recently constructed plants' unless those facilities employed carbon capture or similar technology. That language is gone from its updated policy."
But, there are other signs that a similar shift is occurring industry-wide:
"There have been other contentious changes. In November, JPMorgan Chase said in its annual climate report that it was overhauling the oil and gas emissions-reduction target that had guided its energy investing and was adopting a new 'energy mix' target that took into account financing for clean energy projects. … In a statement, JPMorgan said at the time that its modified target recognized that 'a singular focus on fossil fuels will not successfully achieve the necessary transition of the global energy system.'"
For examples of more banks reneging on their climate commitments, see the article in the second url, below:
"Many of the world's biggest financial firms spent the past several years burnishing their environmental images by pledging to use their financial muscle to fight climate change. Now, Wall Street has flip-flopped. In recent days, giants of the financial world including JPMorgan, State Street and Pimco all pulled out of a group called Climate Action 100+, an international coalition of money managers that was pushing big companies to address climate issues."
Take care
David
David Chandler
© Sage Publications, 2023
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Bank of America Reverses Pledge Against Fossil Fuels
By Hiroko Tabuchi
February 4, 2024
The New York Times
Late Edition – Final
p19
More Wall Street Firms Flip-Flop on Climate Pledges
By David Gelles
February 20, 2024
The New York Times
Late Edition – Final
B2
