Climate groups are calling on John Kerry to shut off the flow of money from Wall Street to the fossil-fuel industry and acknowledge the role of U.S. finance firms in warming the planet.
A total of 145 organizations, including the U.S. divisions of Friends of the Earth and Greenpeace, wrote to Kerry, the special presidential envoy for climate, requesting his support in addressing the contribution that banks and investors make to climate change by financing companies involved in fossil-fuel extraction and deforestation. If the U.S. is to be a global leader on climate issues, it must take action to cut off the money pipeline to polluters, the groups said.
“We must recognize that Wall Street isn’t yet an ally,” they wrote. “As long as U.S. firms continue to pour more money into the drivers of climate change, they are actively undermining President Biden’s climate goals.’’
A State Department spokesperson said the U.S. government doesn't have sufficient resources to address the crisis by itself and will require the public and private sector to help finance its climate agenda.
Fossil-fuel financing is becoming a growing focus for activists because Wall Street dollars can either be an enabler for polluting industries or a powerful lever that could be used to push companies to cut emissions and prepare for a low-carbon future. Mobilizing financial markets to support the transition away from fossil fuels was among the key goals of the 2015 Paris climate accord, which the U.S. officially rejoined last month.
The largest lenders to fossil-fuel companies are New York-based banks, led by JPMorgan Chase & Co. and Citigroup Inc. U.S. banks, as well as insurers and institutional investors, also are “a long way from the leading edge of climate justice,” the groups wrote.
For the country to be a credible global leader on climate change, it should push domestic and international financial institutions to commit to ending fossil-fuel and “forest-destroying” financing and insurance, the group wrote. Kerry should pressure banks and insurers that have made net-zero commitments to do more sooner, including completely exiting sectors such as coal mining, tar-sands oil and Arctic oil and gas.
The climate groups also said Kerry should urge U.S. asset managers to divest from “pure-play” coal, oil and gas companies and ensure that their discussions with companies “appropriately reflect climate risk.” They also requested Kerry advocate for coordinated international climate-focused financial regulation and that he engage with climate advocates and “frontline communities” most impacted by climate change.
“Until we can hold Wall Street firms to account, no amount of new green-finance commitments can credibly undo the damage that their fossil-fuel financing is doing to the climate, to U.S. climate leadership, and to our chances of meeting the goals of the Paris Agreement,’’ the groups wrote in the five-page letter.
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