Banks’ Pledge to Fight Climate Change Isn’t Universally Lauded

Environmental groups criticize pact as a P.R. stunt that masks their un-green activities.

The banking industry, or at least a chunk of it, is making a commitment to be greener, touting an agreement at the United Nations in New York this week to push for a reduced carbon future and other means of combating climate change.

The agreement is not enough for some environmentalists, who staged a protest Monday outside the Manhattan office of the French bank BNP Paribas. That’s where a symposium of bank executives met to discuss their adherence to the Principles for Responsible Banking, as their climate effort is known.

The protesters labeled the bank pact “greenwashing,” a variant of whitewashing. They say the agreement is a ruse designed to make the banks look more climate friendly than they are in practice.

A coalition of environmental groups, including Greenpeace and the Rain Forest Action Network, applauded the intent of the banking document but denounced its signatories as hypocrites. In a statement, the coalition said the bank initiative “was yet another greenwashing tool that masks the destruction of the planet and egregious human rights abuses that are currently being fueled by much of the banking sector.”

The bank climate initiative, which was formally launched at the United Nations on Sunday, is part of the world body’s Climate Action Summit, coinciding with the convening of the UN General Assembly. The UN climate events comes after world-wide youth rallies last week decrying environmental degradation.

The principles, which 130 banks with a combined $47 trillion in assets have signed, require them to develop concrete plans on how they will fight climate change–such as by funding renewable energy and moving away from fossil fuels. The accord binds banks to publishing their goals and meeting them. If they don’t, they get kicked out of the pact.

For some banks, satisfying environmental goals will be easier than for others. Dutch giant ING, for instance, is into funding renewables. Its CEO, Ralph Hamers, told the bank gathering Monday that “we exited coal two years ago.” The Netherlands, though, doesn’t have much of a coal industry.

Contrast that to Norway’s DNB, which is heavily involved in extracting North Sea oil. Its chairwoman, Olaug Svarva, told the banking conclave that “oil and gas will be part of the mix for years to come” because making the switch suddenly out of fossil fuels is impossible. As an audience member booed her, she added that DNB was directing its lending toward gas, which is cleaner than oil. She said the bank  would lend $25 billion by 2025 to boost renewables.

Large U.S. banks were conspicuous by their absence among the pact signers, the exception being Citigroup, which advertises itself as environmentally friendly. The lone other U.S. lender was union-owned Amalgamated, whose devotion to ecological causes has a long history.

The bank executives talking Monday expressed hope that other large institutions will join their effort. Other than the US lenders, several large banks are on board. They included France’s Société Generale, Britain’s Barclays, and Spain’s Santander.

The environmental coalition made a point of highlighting the activities of various banks which it deemed contrary to the pact’s goals. The group noted Citi’s involvement in commodity trading, which the critics claimed was linked to Amazon deforestation.  Citi did not return a request for comment.


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