The dirty 12 investing into fossil fuels.
We all know the banking sector is no darling child of morality, more rather you have to pick your sin.
Where there is money there is corruption, of some kind, and this is no different than for the banking sector.
You can do a quick google search and find a plethora of different banks caught in different scandals, but today are are going to look into how they invest the money.
When we talk about investing money and sin we typically refer to sin stocks or sin sectors, this is otherly known as Vice investing.
Typically when looking at Sin sectors when Vice investing we look towards alcohol, tobacco, gambling, sex-related industries and weapons manufactures.
While it isn’t classed as unethical or immoral to invest into oil companies, with current movements and climate change its starting to look like oil maybe the next to join the sin sector.
Lawsuits have increased as an example in 2019 Exxon Mobile had a lawsuit files which investors were defrauded up to $1.6 billion (£1.2 billion) by hiding the true costs of climate change regulation.
Exxon Mobile won this lawsuit where the judge said “prosecutors did not prove oil giant had misled investors – but does not absolve it of responsibility for global heating”.
Just like tobacco companies I don’t expect these types of lawsuits to stop or even slow down.
But how do banks tie in with oil companies and how does it affect you?
Simply having money with a bank allows them to invest into non renewables.
Banks are able to use your money whether its held in an account, pension or other investments. They can loan or invest the money into businesses around the world, this means your money could end up going towards an oil pipeline or deforestation which maybe against your ethics and indirectly contributing.
That is correct! Just having an account or a pension you could be contributing to climate change.
Is your pension polluting?
A paper was published by Friends of the Earth Scotland with Friends of the Earth England, Wales & Norther Ireland and Platform who worked together as ‘UK Divest’ which was published in October 2021.
Here they investigated six of the Uk’s largest pension funds to consider what is a typical investment into fossil fuel companies. They then scaled up to apply to the UK pension sector as a whole.
They found that investments into fossil fuels would be expected to be around £128 billion and on average would be £1,916 invested into these companies per UK citizen.
The transparency of some of the pensions varied with information of members, AUM & data of specific investments.
If interested in reading here is the link for the PDF for further reading:
How many types of fossil fuels investments can there be?
How about 7 types? Tar Sands Oil, Artic Oil & Gas, Offshore Oil & Gas, Fracked Oil & Gas, Liquefied Natural Gas (LNG), Coal mining & Coal Power.
Each type has a different top bank which invests into each but there is one above all which reigns over fossil fuels, JPMorgan Chase $JPM.
JPMorgan Chase remains the worlds worst bank for fossil fuel investments though it has been dropping over the years, this is followed by Citi $C as the second worst fossil fuel investment bank.
The top 5 list:
1. JPMorgan Chase $JPM
2. Citi $C
3. Wells Fargo $WFC
4. Bank of America $BAC.
5. Royal Bank of Canada $RY.TO
Worst bank in Europe: Barclays £BARC
Worst bank in China: Bank of China 3988.HK
The dirty dozen
Fossil fuel financing between 2016 – 2020
Looking over the data it is surprising how far in the lead (if we can say that) that JPMorgan Chase has financed fossil fuels compared to second place. In fact in 2020 JPM lead by 33% more than second place, which is Citi.
#1 JPMorgan Chase – American – $317 billion
#2 Citi – American – $237 billion
#3 Wells Fargo – American – $223 billion
#4 Bank of America – American – $198 billion
#5 RBC – Canadian – $160 billion
#6 MUFG – Japan – $148 billion
#7 Barclays – British – $145 billion
#8 Mizuho – Japan – $123 billion
#9 TD – Canadian – $121 billion
#10 BNP Paribas – French – $121 billion
#11 Scotiabank – Canadian – $114 billion
#12 Morgan Stanley – American – $111 billion
Largest investments from banks in fossil fuel investments.
First number is total invested between 2016-2020 and second is the amount invested in 2020 alone.
Tar Oil Sands:
TD – $24.2 billion – $1.529 billion
RBC – $22.5 billion – $1.793 billion
JPMorgan Chase – $12.1 billion – $1.758 billion
Artic Oil & Gas:
JPMorgan Chase – $2.2 billion – $835 million
ICBC – $2.2 billion – $591 million
China Minsheng Bank – $2.1 billion – $786 million
Offshore Oil & Gas:
BNP Pariba – $29.3 billion – $14.14 billion
JPMorgan Chase – $29 billion – $9.45 billion
Citi – $28.3 billion – $10.75 billion
Fracked Oil & Gas:
Wells Fargo – $53.9 billion – $9.91 billion
JPMorgan Chase – $52.2 billion – $8.91 billion
Citi – $38.9 billion – $9.56 billion
Liquefied Natural Gas (LNG):
Morgan Stanley – $8.6 billion – $1.34 billion
Citi – $8.1 billion – $1.99 billion
JPMorgan Chase – $7.8 billion – $2.04 billion
Industrial Bank – $17.4 billion – $3.35 billion
China Construction Bank – $12.4 billion – $1.95 billion
Bank of China – $12.2 billion – $1.94 billion
Bank of China – $22.7 billion – $3.32 billion
ICBC – $22.3 billion – $3.09 billion
China CITIC Bank – $18.4 billion – $2.92 billion
To check out all the data here is the link to the PDF: