The Hypocrisy Hall of Shame

How “dirty banks” talk a good game on climate but don’t deliver.

Generated by Dall-E 2

We all know the story of Willie Sutton, who was asked why he robbed banks. “Because that’s where the money is,” he said.

It’s also where the power is — to save the planet or not. The real action in the climate change movement is now shifting to “dirty banks.” Some of today’s most pernicious lies come in the form of “greenwashing”— splashy plans by financial institutions to do something real about climate change that turn out — so far — to be bullshit.

Americans have resented banks since the early days of the Republic. In the 1830s, President Andrew Jackson led a democratic movement to destroy the Bank of the United States. In the 1890s, resistance to Wall Street fueled agrarian populism. In the 1930s, bankers were reviled as “banksters” for getting us into the Great Depression. And in the 2000s, when the subprime mortgage crisis brought on the Great Recession, banks won a gargantuan bailout, the price we were forced to pay to avoid a global economic meltdown.

Identifying the problem with banks has always been easier than bringing them to heel. When I was writing my book about Barack Obama’s first year in office and the Senate was dawdling on reform legislation, Dick Durbin told me flatly: “The banks own this place.”

Now we have a new problem with banks and private equity funds, which Al Gore and others are bringing to light: When they pledged to help reduce carbon emissions, they didn’t scale back financing for the fossil fuel industry. In fact, many increased it.

Gore — heroically prescient for more than four decades — has pivoted in recent years to stressing hope; he knows a message of pure gloom is paralyzing. But this month in Davos, he couldn’t hide his frustration about what’s not happening:

I have noticed a huge increase in the amount of passion and attention being paid by CEOs and other business leaders. It is for real, but…we are not winning. The crisis is still getting worse, faster than we are deploying these solutions and we need to make changes quickly. Emissions are still going up. All these promises of the last few years to cut emissions?  Emissions are still going up! When are we going to bring these emissions down?

I recommend you watch the whole thing, which is only about nine minutes long.  (A longer panel he moderated is also worth a look) Gore’s vision helped inspire Greta Thunberg and thousands of other climate activists who are the world’s best hope for confronting the challenge, and he continues to express the righteous indignation and vivid urgency we need to help pull us out of our habitual complacency:

We're still putting 162 million tons into it every single day. And the accumulated amount is now trapping as much extra heat as would be released by 600,000 Hiroshima class atomic bombs exploding every single day on the earth. That's what's boiling the oceans, creating these atmospheric rivers and the rain bombs and sucking the moisture out of the land and creating the droughts and melting the ice and raising the sea level and causing these waves of climate refugees predicted to reach 1 billion in this century. Look at the xenophobia and political authoritarian trends that have come from just a few million refugees. What about a billion? We would lose our capacity for self governance on this world. We have to act.

Gore works closely with the international business community on climate change but he is increasingly siding with protesters. He told the billionaires and billionaire-wannabes gathered at the past-it’s-prime conclave — held in the Swiss ski village with no snow — that Greta Thunberg was absolutely right to be trying to block expansion of a German coal mine. And he was incredulous at the bald hypocrisy of at least some of the masters of the universe in attendance.

For the fourth year in a row, Davos organizers declared the climate crisis the most serious threat to the global economy. And even U.N. Secretary General Antonio Guterres, normally a go-along diplomat, seemed appalled that World Bank President David Malpass last year essentially bragged about being a climate denier.

On stage, Gore bored in: “They [young climate change activists like Thunberg] look at the World Bank and they say, ‘Oh, you've got a climate denier in charge of the World Bank.’ So why are you surprised that the World Bank is completely failing to do its job?”

Climate activist Great Thunberg

But the bad banking behavior goes much further, extending to institutions that recently pledged to take action.

In 2021, at COP26 (the 26th annual UN conference trying to grapple with this monumental problem), Michael Bloomberg, Mary Schapiro (former chair of the SEC) and Mark Carney (former head of the Bank of England) assumed UN positions and formed something called The Glasgow Financial Alliance for Net Zero (GFANZ), which describes itself as "a global coalition of [160] leading financial institutions committed to accelerating the decarbonization of the economy.” The aim was to help implement the landmark 2015 Paris Agreement, under which the nations of the world pledged to limit global temperature increases to 1.5 degrees Celsius and move toward Net Zero carbon emissions.

Gore learned last fall that the world’s largest banks were greenwashing. He described the commitments by GFANZ members as “very welcome,” but noted “that some who made impressive pledges did not immediately begin to put in place a practical plan to fulfill those pledges.”

The truth is even worse. Shortly after joining the team that Bloomberg et al established — the Net Zero Banking Alliance (NZBA) — some of these banks and investment firms have actually stepped up their financing of the fossil fuel industry. A disturbing new report from Reclaim Finance, a non-profit that tracks these things, details how 56 of the biggest banks that pledged to help the transition to Net Zero recently invested and/or loaned $270 billion to 102 major “fossil fuel expanders.”

After committing to net zero by joining the Glasgow Financial Alliance for Net Zero (GFANZ), financial institutions have continued pouring hundreds of billions of dollars into the companies developing fossil fuels, according to a new report published today by a group of NGOs, including Reclaim Finance.

All the big banks in the U.S., Europe and Japan are now in the Hypocrites Hall of Shame, but according to Bloomberg News, Citigroup and Bank of America “have done more to support the expansion of fossil-fuel companies than any other lenders.”

Citigroup, where I bank (though not for long if it doesn’t clean up their act), is one of the founder members of the NZBA and its executives — like those at Black Rock (the largest investment manager in the world), JP Morgan Chase, Wells-Fargo, and the other big boys — love to brag about their green credentials. But within the last two years, Citigroup has pumped $30 billion into Saudi Aramco, QatarEnergy, and Gazprom.

In fairness, some of those deals likely pre-date NZBA, and some of those companies invest in clean energy as well as fossil fuels. That’s the excuse offered by UAE for appointing Sultan al-Jaber, the head of the huge state oil company, as president of COP28, which will take place in Dubai at the end of the year. Al-Jaber talks a great game about moving away from fossil fuels but why should anyone believe him? “This appointment goes beyond putting the fox in charge of the henhouse,” Teresa Anderson, global lead on climate justice at ActionAid, a development charity, told CNBC.“The UN Climate Summit is supposed to be a space where the world holds polluters to account, but increasingly [it’s] being hijacked by those with opposing interests.”

The good news is that climate change activists like Bill McKibben, whom I interviewed for Old Goats in 2021, now have the dirty banks firmly in their sights. He and other climate activists aren’t trying to end all financial support for fossil fuels; that’s unrealistic.The new demand, across all civil society, is that banks merely stop funding the expansion of the fossil fuel industry.

This was the position of much of the anti-slavery movement (including Abraham Lincoln) in the 1850s: opposition to expansion of the Slave Power into the territories.

The Fossil Fuel Power won’t go down without a fight, and it’s getting help from red state treasurers and auditors pushing back against environmental, social and governing (ESG) investing. The new rightwing push against “woke capitalism” is putting wind in the sails of bankers who don’t want to do anything about climate change.

But McKibben and his many allies are fighting back with a mass action planned for March 21. On 3.21.23, activists will fan out to the sites of environmental destruction (for instance near Florida’s dying coral reefs and California’s fire-scarred forests) and cut up their bank cards. This is the first mass action spearheaded by Third Act, the new organization McKibben co-founded that is bringing older Americans into climate activism.. 

Now’s the time for a cross-generational movement of Willie Suttons — not to rob the banks, but to force them to use their (our) money with the future in mind.