Danielle Fugere, president and chief lawyer for non -profit non -profit shareholders while you are sowing, said that disclosure is a prerequisite for holding banks to their climatic objectives. “We want to understand what they are doing,” she said. Laws like California highlight the financial instability formulated by climate change focused on fossil fuels and, in theory, the financing of provision that would exacerbate it.
Of course, the simple fact of requiring the banks to disclose their emissions and their risks linked to the climate are not likely to prevent the worst impacts of global warming. According to a Landmark 2021 report From the International Energy Agency, no new oil, gas and coal infrastructure can be built if the world must limit global warming to 1.5 degrees Celsius (2.7 degrees fahrenheit). This is why Patrick McCully, a principal analyst of the energy transition of non -profit France Reclaim Finance, who pleads for a more sustainable banking sector, said that legislators should “push banks to reduce their funding of fossil fuels”.
“These companies act against the interests of humanity, and we have to stop them,” he told Grist.
Fajans-Turner, however, said that a policy of this nature would be difficult to write and would probably be confronted with judicial disputes even in the most progressive states, where natural gas prohibitions on new constructions have been beaten by industrial groups.
Ann Lipton, business law professor at the University of Tulane, said that better way for political decision-makers to limit new fossil combustible projects was to look beyond the banking sector. For example, legislators could oblige insurance companies to take into account the financial risks linked to the climate when designing their policies, which could make more difficult for fossil fuel projects to obtain coverage. “We would like banks to stop funding risky activities, but ultimately, a bank’s work is to finance things that are predictably,” she said. “It is the work of the rest of the company to do this [thing] not profitable.
Another strategy is to demand that banks publish a clear decarbonization plan, which can, in theory, be a kind of rear door to block new fossil fuel investments. “Implicit by having a goal is that the bank takes a kind of action to ensure that it achieves this objective,” said Fugere. If a plan mentions the “net-zero” on a certain date, to be credible, it must imply a kind of reduction in the financing of fossil fuels. If he claims to line up on a track to limit global warming to 1.5 degrees C, it should not allow the expansion of fossil fuels.
