BM Report
The regulatory mussel should steer banks towards sustainable investment by stopping financing fossil fuels. We need to create a framework to address climate issues, ensure effective policies, and ensure safe funding for our future responsibly to heal the world.
Speakers said this in a panel discussion during the launch of the ‘Fund Our Future’ campaign of ActionAid, held on Tuesday at a convention center in Dhaka. ActionAid also revealed a study report on the occasion.
According to the study conducted by ActionAid, the fossil fuel and industrial agriculture industries in the Global South are receiving an average of 20 times more financing from banks than governments are receiving for climate solutions. Since the adoption of the Paris Agreement on Climate Change in 2016, banks have put $3.2 trillion towards the expansion of fossil fuels, the number one cause of climate change, and $370 billion into industrial agriculture, the second largest contributor to climate change. The top banks funding the climate crisis include HSBC, Citigroup, and JP Morgan Chase, among others.
The report found the top banks from each region funding fossil fuels and industrial agriculture in the Global South are from Europe: HSBC, BNP Paribas, Societe Generale, and Barclays; from the Americas: Citibank, JPMorgan Chase, and Bank of America; and from Asia: Industrial and Commercial Bank of China, China CITIC Bank, Bank of China, and Mitsubishi UFJ Financial.
The report also says the largest recipient of industrial agriculture financing in the Global South is Bayer, which has received an estimated US$20.6 billion in financing for its industrial agriculture operations in the Global South since 2016.
In the panel discussion held during the campaign launch, the chief guest, Saber Hossain Chowdhury, Chairman of the Parliamentary Standing Committee on the Ministry of Environment, Forestry, and Climate Change, opined, “The biggest challenge of the climate crisis is that we are creating problems faster than solutions. We need to find an overall framework to address the problems and ensure effective regulation of the policies. Bangladesh has no clear net zero greenhouse gas emission target; that needs to be set up, and greater coordination between the ministries is required to have a sustainable solution. We can’t rely on other nations for solutions; we have to do the right thing. For smart Bangladesh, we have to make smart choices.
Dr. Saleemul Huq, Director of ICCCAD, added, “We have to persuade our government to put pressure on the polluters of the world. There are certain governments in the world that speak on behalf of polluters. Rich people are creating problems, and poor people are suffering. Let’s not fool ourselves that this is going to be easy. Every one of us has to be a warrior to fight against climate injustice.
Country Director of ActionAid Farah Kabir said “This report exposes how banks and financial institutions are the key drivers behind our climate crisis. We need to set targets for accountability and monitoring. We ask the decision-makers to fund our future responsibly to heal the world. We must ask for justice and continue our fight with collective efforts.
Research Director of CPD Dr. Khondaker Golam Moazzem said, “Steps need to be taken to shift from fossil fuel subsidies and utilize that for alternative sustainable routes. It is good that the government is setting targets for renewable energy, but if our ultimate target is fossil fuel reduction, we also need a reduction target.
Khaondekar Morshed Millat, former director of the Sustainable Finance Department of Bangladesh Bank, said, “The central bank needs to be the watchdog for our environmental future. The sustainability rating of banks needs to be reevaluated. Just as rivers of money are fueling the climate crisis, regulatory mussels should steer banks toward sustainable and renewable investment.
Anwar Farooq, former secretary, Ministry of Agriculture, Government of Bangladesh; Shubasish Barua, Head of Impact Business, Green Delta Insurance Company Limited (GDIC); Abul Kalam Azad, former Principal Secretary at the Prime Minister’s Office; Dr. Atik Rahman, Executive Director of the Bangladesh Centre of Advanced Studies; and Samia Chowdhury, CEO, MTB Foundation, also spoke in the panel discussion, among other distinguished panelists.
The report calls for banks to immediately stop projects and corporate financing for all new deforestation, coal, and fossil fuel expansion activities and rapidly phase out financing of all other fossil fuel and harmful industrial agriculture activities. The report further says national and regional governments must regulate the banking and finance sectors to stop the financing of fossil fuel expansion and scale up support and planning for just transitions to real solutions such as renewable energy and agroecology.
