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Davos financial players pump $1.4 trillion into fossil fuels: new Greenpeace report

Banks, insurers and pension funds are as culpable for the climate emergency as the fossil fuel industry - especially those at the World Economic Forum Annual Meeting

by Katie Nelson

January 21, 2020

January 21, 2020, Davos, Switzerland – Banks and pension funds with CEOs attending the World Economic Forum Annual Meeting in Davos are collectively financially exposed to fossil fuel companies to the tune of $1.4 trillion. Also represented at the gathering of the world’s most powerful are five of the worst insurance companies for coal coverage. These are the findings of “It’s the finance sector, stupid,” a new Greenpeace International report.

Greenpeace International analyzed which banks, pension funds and insurers go to Davos but fail to live up to the Forum’s goal, from an environmental and economic perspective, of “improving the state of the world.” The report and accompanying website, www.worldeconomicfailure.com, also illustrate how lobbyists and PR firms are engaged by these financial actors and fossil fuel companies to work against the Paris Agreement.

“The banks, insurers and pension funds here at Davos are culpable for the climate emergency. Despite environmental and economic warnings, they’re fueling another global financial crisis by propping up the fossil fuel industry. These money men at Davos are nothing short of hypocrites as they say they want to save the planet but are actually killing it for short term profit,” said Greenpeace International Executive Director, Jennifer Morgan.

24 banks that go to Davos have financed the fossil fuel industry to the amount of $1.4 trillion since the Paris Agreement through to 2018. [1] $1.4 trillion is the same as what the world’s 3.8 billion poorest people had collectively in 2018.

Of these 24, it is just 10 banks that account for $1 trillion in fossil fuel finance: JP Morgan Chase, Citi, Bank of America, RBC Royal Bank, Barclays, MUFG, TD Bank, Scotiabank, Mizuho and Morgan Stanley. $1 trillion is equivalent to the financial risk reported by 215 of the world’s biggest global companies due to climate impacts that are likely to hit within the next five years. $1 trillion could also buy 640GW of solar power, which is more than the current global capacity.

Three pension funds that are due this year at Davos have at least $26 billion in fossil fuel holdings in Shell, Chevron, and Exxon, among others, and in fossil fuel bankers JP Morgan Chase, Bank of America, and Royal Bank of Canada. [2] $26 billion equates to the world’s biggest IPO to date, that of Saudi Aramco. These three pension funds are Ontario Teachers’ Pension Plan, Canada Pension Plan Investment Board, and PensionDanmark.

If a sector is not insurable, it is not bankable. Five of the world’s worst insurance providers when it comes to covering coal attended the 2019 Annual Meeting in Davos and are likely to be there this year. They are AIG, Prudential, Sompo, Tokio Marine, and Lloyd’s. [3] Four of the five have not adopted any public policies to reduce their support for coal projects. [4] And the same number has not adopted any public policies to divest from coal and other fossil fuels. [5] AIG, sponsor of New Zealand’s national rugby union team, is deemed as the worst insurer as it also has not excluded support for the giant Adani coal mine project in Australia.

“Around the world, there’s a movement brewing to call on the financial industry to stop funding the climate crisis. Here in the US, Greenpeace and dozens of other groups have launched the Stop the Money Pipeline campaign [6], targeting the worst banks, insurance companies, and investors funding fossil fuels and deforestation. We know that the time for half measures is long gone — the CEOs of our leading financial institutions must recognize that we are in a climate emergency and act immediately,” said Janet Redman, Climate Campaign Director at Greenpeace USA. 

ENDS

Notes:

  1. Since the Paris Agreement was signed, 33 major global banks have collectively poured $1.9 trillion into fossil fuels, according to BankTrack’s report, Banking on Climate Change – Fossil Fuel Finance Report Card 2019. 24 of these banks attended the World Economic Forum’s 2019 Annual Meeting in Davos, based on Quartz data, and are likely to attend this year’s event in Davos. These 24 banks have funded fossil fuels to the tune of $1.4 trillion since the adoption of the Paris climate accord in 2015 and up to the end of 2018, according to BankTrack. The 24 banks are: JP Morgan Chase, Citi, Bank of America, RBC Royal Bank, Barclays, MUFG Bank, TD Bank, Scotiabank, Mizuho, Morgan Stanley, Goldman Sachs, HSBC, Credit Suisse, Bank of Montreal, Deutsche Bank, Canadian Imperial Bank of Commerce (CIBC), Société Générale, UBS, ING, BPCE/Natixis, Standard Chartered, Santander, BBVA and Royal Bank of Scotland (RBS).

  2. The $26bn figure for the 3 pension funds is based on Greenpeace International calculations via desk research into the Ontario Teachers’ Pension Plan, Canada Pension Plan Investment Board, and PensionDanmark. These pension funds attended the World Economic Forum’s 2019 Annual Meeting in Davos, based on Quartz data, and are likely to attend this year’s event in Davos.

  3. The UnfriendCoal scorecard 2019 focused on 30 leading insurers, assessing and scoring their policies on coal and tar sands insurance, divestment and other aspects of climate leadership on the basis of a survey with more than 80 questions. Of the 30 companies, 24 responded to the survey or provided other information. Those that did not respond were scored on the basis of publicly available information. 5 of these insurers attended the World Economic Forum’s 2019 Annual Meeting in Davos, based on Quartz data, and are likely to attend this year’s event in Davos.

  4. AIG, Sompo, Tokio Marine, and Llyod’s have not adopted any public policies to reduce their support for coal projects.

  5. AIG, Prudential, Sompo, and Tokio Marine have not adopted any public policies to divest from coal and other fossil fuels.

  6. Greenpeace USA is part of a new coalition effort, Stop the Money Pipeline, that will be campaigning to end the financing of fossil fuels and deforestation. Stop the Money Pipeline is focused on the worst offenders in the finance industry: JP Morgan Chase, the largest bank funder of fossil fuels, Liberty Mutual, a top insurer of new fossil fuel projects, and BlackRock, the world’s largest investor in coal, oil and gas companies and the corporations driving deforestation in the Amazon.

Prediction of 2020 Davos attendees is based on the Quartz magazine’s lists of Davos attendees between 2016-2019.

“It’s the finance sector, stupid” report by Greenpeace International is available for download at www.worldeconomicfailure.com, which features interactive alternative business cards for financial players who are likely to attend Davos 2020.

Contact:

Katie Nelson, Strategic Communications Specialist – Greenpeace USA, 678-644-1681, [email protected]

Greenpeace International Executive Director, Jennifer Morgan, will be attending the World Economic Forum Annual Meeting in Davos. For interviews, please contact Dannielle Taaffe at [email protected].

Katie Nelson

By Katie Nelson

Katie Nelson is a Senior Communications Specialist at Greenpeace USA.

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