SUBSECTOR FINANCING

JPMorgan Chase was also the top banker over the past three years of three spotlight oil and gas subsectors: Arctic oil and gas, ultra-deepwater oil and gas, and LNG. Our research shows an uptick in overall bank financing for Arctic oil and gas last year, which is worrisome considering the Trump regime’s attempts to open up the Arctic Refuge for drilling, as described on page 38. JPMorgan Chase is the biggest banker of Arctic oil and gas by a long shot, followed by Deutsche Bank and SMBC Group.

To be sure, JPMorgan Chase is not the worst on absolutely everything. The big four Chinese banks pour vastly more money into coal than their international competitors. In fact, last year Agricultural Bank of China, Bank of China, China Construction Bank, and ICBC were responsible for 71 percent of finance from major global banks for the coal mining subsector, and 55 percent of coal power finance.

Overall finance from the 33 banks analyzed fell only slightly over the past three years in both the coal mining and power sectors. This is obviously grossly inadequate to the task of meeting the IPCC’s “pathway” to staying below a 1.5°C increase in global temperature, which calls for a 78 percent drop in coal emissions by 2030 — and also unacceptable given that pollution from coal burning is estimated to cause over 800,000 premature deaths per year globally.4 Notably, Wells Fargo and Natixis were found not to have led any transactions for top coal mining companies since the Paris Agreement, and CIBC and Bank of Montreal were in the same position on coal power.

At the same time, bank policies on restricting financing for coal are on average much better than their policies in other sectors. Five of the banks reviewed here received B-range grades across the coal mining and power sector: the four French banks, and the Dutch bank ING (a B-range grade requires a prohibition on financing for new projects and a commitment to restrict some financing for coal companies). Overall, nine of these 33 banks issued new policies on coal finance in the year since the publication of last year’s report card, including RBS and SMBC Group. The four big Chinese banks remain at the bottom of the class on coal, with Fs all around — as they do across the board with none of them having public corporate due diligence policies, let alone policies restricting fossil fuel financing.

Not surprisingly, given the concentration of tar sands oil in Alberta, five of the top six tar sands bankers between 2016 and 2018 are Canadian, with RBC and TD by far the two worst. The only non-Canadian in this top six is — no surprise — JPMorgan Chase, in third place over the past three years. Overall tar sands financing from the 33 banks we analyzed fell sharply in 2018. This was to be expected given that the previous year saw a massive influx of finance to enable Canadian pure-play tar sands companies to buy up the Albertan assets of some of the global majors such as Shell and ConocoPhillips. Most notably, Barclays financing fell by 94 percent and HSBC’s by 87 percent. BNP Paribas, BPCE/Natixis, and ING have the strongest tar sands policies. Natixis, RBS, and HSBC all came out with strengthened tar sands restrictions over the past year. Commendably, neither RBS, ING, BBVA, nor UniCredit led transactions in 2018 to any of the top tar sands companies covered by our analysis.

On fracking finance, Wells Fargo comes out an unrespectable first. Wells Fargo, JPMorgan Chase, and Bank of America dominate the sector; together they account for over a third of the total. Fracking finance from banks has climbed rapidly over the past three years. BNP Paribas stands out as the only bank whose fracking policy earned a grade in the B range. Alarmingly, none of the rest of the group of 33 banks earned higher than a D+ — meaning that they only have committed to carrying out enhanced due diligence on frackingrelated transactions, a very low bar to cross given the clear environmental, climate, and public health risks of fracking.

Last year, these big banks increased their financing for the top companies behind liquefied natural gas (LNG) import and export terminals worldwide. Often touted as a climate solution, new LNG terminals lock in an expansion of fossil fuel infrastructure that our climate can’t afford — especially for a fuel that can be even worse for the climate than coal.7 JPMorgan Chase, SociétéGénérale, and SMBC Group are the worst funders of LNG over the past three years. BNP Paribas is notable for its sharp drop in financing for LNG over the past three years — and with its C+ policy grade, it is the only bank in the group to surpass a D-level grade for LNG.

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