Climate change is already affecting the planet and our lives in multiple ways. In order to avert the worst impacts of climate change and avoid another financial crisis potentially far more dire than that of 2008, policymakers must address emissions from the industry that is both fueling the climate crisis and threatening economic stability: the U.S. financial sector.
A new report from the Sierra Club, Solomon Strategies LLC, and the Center for American Progress sheds light on U.S. financial institutions’ role in contributing to climate change through the emissions that the sector finances. It analyzes publicly available data to provide an indicative assessment of the size of the global carbon footprint financed by some of the largest entities in the U.S. financial sector.
The report finds that just portions of the portfolios of the eight banks and 10 asset managers studied financed an estimated total of 1.968 billion tonnes carbon dioxide equivalent based on year-end disclosures from 2020. To put this figure in perspective, if the companies in this study were a country, they would have the fifth-largest emissions in the world, falling between Russia and Indonesia. This is based only on the limited publicly available data for a select number of institutions, so this number is almost certainly an underestimate.
The report also highlights the most meaningful actions the Biden administration and financial regulators can take to curb financial sector investments in the increasingly risky fossil fuel industry and other high-carbon-emitting sectors.
Read the report here: “Wall Street’s Carbon Bubble: The Global Emissions of the US Financial Sector”
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Campaign Manager, Fossil-Free Finance Campaign, the Sierra Club
Independent Consultant and Campaign Strategist, Solomon Strategies LLC
Vice President, Economic Policy