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Rainforest Action Network (RAN) is questioning banks’ commitment to reducing greenhouse gas emissions with a report that shows continued financial support for carbon-intensive companies.

In ‘Bankrolling climate disruption: the impacts of the banking sector’s financed emissions’, the NGO finds that banks’ targets to reduce their own carbon footprint are in contrast with their behaviour when providing funding to companies.

“The climate footprint of energy financing activities is estimated to be 100 times larger than those that banks emit through operations,” says Amanda Starbuck, RAN energy and finance campaign director.

“The time has come for banks to address the global impacts of doing business with fossil fuel industries and come clean on their commitments.”

In particular, the report cites JP Morgan Chase as an example of the disparity between its goal of reducing its greenhouse gas (GHG) emissions to 80% of 2005 levels by 2012, and its relationship with Duke Energy, which in 2010 was “one of the largest carbon emitters in the US electric power sector”.

JP Morgan declined to comment when contacted by GTR.

RAN also points out that banks failed to properly measure their carbon footprint, and encourages them to use the guidelines at their disposal.

Ben Collins, research and policy campaigner at the NGO, says: “Banks will need to shift financing from fossil fuel-based power sources to low-carbon energy infrastructure for our communities and the climate. One way of doing that is by measuring the climate impact of investments and committing to reduction targets for financed emissions, now.”

However, banks believe it is slightly unfair to put the blame on them in this situation, as it is not up to them to decide which industry should or should not be financed.

A banker who prefers to stay anonymous tells GTR: “It is a little bit unfair because everyone has to do their job. Banks are in charge of financing the economy; we have environmental and social policies for sensitive sectors, but the push has to come from the political side, if authorities agree that the construction of a coal-fired plant is necessary, it is not the bank’s role to refuse to finance it.

The source adds that it would be unrealistic to stop financing companies that work in the coal industry, as most utilities firm work across a mix of energy sources, including renewables and more carbon-intensive sectors.

“Besides, it is not possible to consider that we could completely stop all coal-fired or nuclear power plants in the short term because the world needs that energy and it will take time to replace it,” the banker concludes.

A spokesperson at Barclays tells GTR: “In terms of oil and coal, we do provide funding for these industries because these fuels remain part of the energy mix for most economies. However, our involvement is in keeping with our stringent environmental risk policies and practices.”

The RAN report admits that the transition to financing less carbon-intensive industries could be difficult for the banking sector, due to long-term financial relationship with companies in polluting industries such as coal.