Financial giant Bank of America has revised its “woke” environmental stance, previously aimed at reducing funding for coal and Arctic drilling projects. The bank’s 2021 promise, hailed by leftist environmental advocates, pledged to halt financing new coal mines, coal-fired power plants, and Arctic drilling. However, recent company documents reveal a significant alteration in this policy.
According to its updated “Environmental and Social Risk Policy Framework” from December 2023, Bank of America now plans to implement “enhanced due diligence” rather than completely refusing to finance such initiatives. This backtrack contradicts its 2021 commitments, where the bank vowed to refrain from directly funding new thermal coal mines, the expansion of existing ones, or Arctic petroleum exploration and production activities.
Conservative circles and various states have increasingly criticized corporate environmental policies. Nonprofit Consumers’ Research targeted Bank of America for its environmental, social, and governance (ESG) policies in a 2023 ad campaign. Meanwhile, investment funds with ESG goals saw a downturn, with $2.7 billion lost and closures outpacing openings in the third quarter of 2023.
Bank Of America Walks Back Much-Touted Pledge To Not Finance Coal, Arctic Drilling https://t.co/Zrh9tdqhPr via @dailycaller #ClimateScam
— Terri (@River_City) February 3, 2024
The bank’s shift reflects the growing pressure from Republican lawmakers against corporations that factor environmental and social considerations into their operations. This “woke capitalism,” as many America First Republicans term it, has led to financial regulations in states like Texas and West Virginia aimed at ensuring fossil fuel companies’ access to banking services.
Bank of America’s updated policy has removed the explicit language against financing new coal and Arctic projects, choosing to subject such projects to a senior-level risk review instead. This change has prompted criticism from environmental groups. Lucie Pinson, director of Reclaim Finance, a nonprofit focusing on financial climate impact, states that the bank’s move sends a negative message about taking up new fossil fuel assets.
The broader banking sector is also reflecting this shift. In its annual climate report, JPMorgan Chase announced an overhaul in its energy investing approach, focusing on a new ‘energy mix’ target that includes financing for clean energy projects. Citigroup’s chief executive, Jane Fraser, spoke at a conference in Saudi Arabia about the new emphasis on energy security, including food and defense security concerns.
Despite the initial environmental pledges, substantial financing continued to flow to fossil fuel companies. In 2022, the world’s 60 largest banks provided $669 billion in fossil fuel financing. Since the 2015 Paris Agreement, these banks have financed the fossil fuel industry with about $5.5 trillion.
The retreat of banks like Bank of America from strict environmental pledges has broader implications. Environmental advocates view this as a financial decision that contradicts global efforts to mitigate climate change. The International Energy Agency has emphasized the need to stop new coal-burning power plants and oil and gas fields to avoid the catastrophic effects of climate change.
