Banks Making Progress on Environment, Group Says

Banks Making Progress on Environment, Group Says

Many large U.S. banks are making progress toward tightening their lending standards for project financing to address potential environmental risks, according to an environmental group.

Rainforest Action Network’s Earth Day deadline for “The Liquidators” to meet or beat new industry best practices set by Citigroup resulted in movement from 8 out of 10 of America’s most environmentally destructive mega-banks.

Written responses received by Rainforest Action Network on or before April 22 ranged from encouraging targets and timelines articulated by J.P. Morgan Chase & Co. to an outdated justification by Goldman Sachs that it had “actively avoided applying a narrow set of rules” to social and environmental issues asserting that would encourage “box ticking” and “impede real thinking.” Bank of America continues to engage in active negotiations with Rainforest Action Network’s Global Finance Campaign.

“The Liquidators are getting the message that the global marketplace will not tolerate environmentally destructive investments that pillage our planet,” said Michael Brune, executive director of Rainforest Action Network. “We are witnessing the beginning of a sea change in the relationship between ecology and economy. U.S. banks are waking up to the fact that if the environmental bubble bursts, the global economy bursts with it. Economic democracy is redefining profit to guarantee that the natural capital of our environment and communities are preserved indefinitely. There is a new bottom line on Wall Street, and financial institutions that don’t reconcile with it are destined to become financial fossils.”

“Global grassroots pressure is challenging Wall Street’s longstanding lack of environmental principles,” said Ilyse Hogue, director of the Global Finance Campaign at Rainforest Action Network. “Over 50 percent of the world’s largest economies are corporations, and the free market is demanding innovative financial solutions to stop the environmental free fall brought on by decades of industrial denial. Americans want CEOs and shareholders to stop putting aside their humanity and start living up to the highest ideals of a democratic economy by embedding environmental ethics into our economic structures.”

In a March 10, 2004 letter, Rainforest Action Network executive director Michael Brune proposed that America’s biggest banks assume a role of international environmental leadership. The letter compelled them to take immediate first steps to phase out all funding and investment for extractive industries (oil, gas, mining, logging) in endangered ecosystems; commit to support the right of indigenous and local populations to have free and prior informed consent to projects on their lands; commit to independent third party chain-of-custody certification in regions where over 50 percent of logging is illegal; prioritize funding for sustainable alternatives, such as Forest Stewardship Council certified logging projects and clean energy sources such as solar and wind power; provide and promote retail financial products including energy efficient and energy improvement mortgages to encourage mainstream adoption of clean energy sources; and commit to reduce investments in greenhouse gas producing industries, beginning with an immediate ban in new funding for coal.