The NewStandard ceased publishing on April 27, 2007.

Activists Target Big Banks for Financing Climate Change

by Megan Tady

Dubbing them the Wall Street Seven, some environmentalists are putting pressure on major financial institutions for financing power plants that emit the most greenhouse gases.

Apr. 11, 2007 – Environmentalists are attempting to pull the rug out from under new coal-fired power plants in the United States by targeting the banks that fund them.

Amid warnings about the need to scale back and stop greenhouse-gas emissions to lessen global warming, power utilities are still blueprinting at least 150 new coal-burning plants in the United States. But their plans are being met with opposition from environmentalists, many of whom are chanting a strict "no new coal" policy.

Rather than simply targeting the power companies, activists are trying to stop the flow of money to new coal plants by protesting the seven financial institutions in the United States that are financing most of the new plants: Citigroup, Credit Suisse, Goldman Sachs, JP Morgan Chase, Lehman Brothers, Merrill Lynch and Morgan Stanley.

The Rainforest Action Network (RAN), an organization that pressures corporations on environmental stewardship, is leading the bank campaign and is encouraging activists to join protests against the so-called "Wall Street Seven" this Friday and Saturday. The actions, which include protesting outside of the banks, are also part of the Step It Up campaign’s National Day of Climate Action on Saturday, for which over 1,300 nationwide protests are planned.

The advocacy group Union of Concerned Scientists is also urging people to send letters telling the banks to "end their support for proposed coal plants and to help finance clean, renewable energy instead."

"Knowing what we know about climate change... we simply can’t afford to be building the dirtiest, most greenhouse-gas intensive polluting technologies."

The global scientific community has been calling for a 60 to 80 percent reduction of greenhouse-gas emissions by 2050 to prevent the worst effects of climate change. In the United States, coal-fired plants are responsible for about 83 percent of the carbon-dioxide emissions produced by fossil fuels burned for electricity, according to the Environmental Protection Agency.

"Building those new coal plants would lock us in to… that fuel," said Jeremy Osborne, a coordinator for Step It Up. "And if we’re going to get to those reductions that the science says we need, then stopping a lot of these coal plants from being built is a very important step."

In March, RAN published an ad in the New York Times that identified the banks investing in "dirty coal." Citigroup, for instance, has financial ties to many of the major coal-heavy energy companies, including Dynegy, Duke Energy, Peabody Energy, Dominion Resources, Excel Coal, Exelon, Reliant and NRG Energy.

And Credit Suisse calls itself "one of the leading underwriters of investment-grade and high-yield debt and equity capital for the power industry."

JP Morgan, Lehman Brothers, Goldman Sachs, Morgan Stanley and Merrill Lynch refused to grant interviews with The NewStandard.

"The New York Times ad was a shot across the bow, and the Step It Up campaign this weekend will obviously help raise public awareness of the banks’ roll in climate change," said Dana Clark, corporate commitments campaigner for RAN.

“[Banks] could get caught on the wrong side of this tidal wave of political change. I think that this campaign works well to underscore that.”

RAN began targeting banks in September 2006 during its campaign to stop the power company TXU from building eleven new coal plants in Texas. In February, two private firms, Kohlberg Kravis Roberts & Co. and Texas Pacific Group, bought out TXU and cut a deal with mainstream environmental groups, including Environmental Defense, to only build three new coal-fired plants.

Citigroup, Lehman Brothers and Morgan Stanley intend to be investors in the new TXU. And while the agreement was hailed as a victory, RAN’s Clark said, "From our perspective, three [coal plants] is still three too many."

"Knowing what we know about climate change and the massive risks associated with climate, we simply can’t afford to be building the dirtiest, most greenhouse-gas-intensive polluting technologies for providing power," Clark said.

Jeff Goodell, author of the book Big Coal: The Dirty Secret Behind America's Energy Future, told TNS the campaign highlights the hypocrisy behind many of the banks’ lip service about climate change. "I think this is a good strategy to draw attention to the back room financial dealings taking place and the way these calculations are being made, especially when you have banks who are making a lot of noise about being green," Goodell said.

Several of the banks tout environmental policies. Goldman Sachs’ policy says, "We take seriously our responsibility for environmental stewardship and believe that as a leading global financial institution we should play a constructive role in helping to address the challenges facing the environment."

“At the moment, it’s still free to dump carbon dioxide into the atmosphere.”

JP Morgan Chase’s climate change policy says the bank will "encourage clients that are large greenhouse-gas emitters to develop carbon-mitigation plans."

Goodell said activists could make investing in coal risky by "inject[ing] uncertainty into these financial deals."

"The political instability of this – that the uptake on the dangers of global warming and the risk it’s putting our civilization in are growing very fast – puts a lot of risk in this financial investment," Goodell said. "[Banks] could get caught on the wrong side of this tidal wave of political change. I think that this campaign works well to underscore that."

Goodell added that if banks began to pull their support from coal plants, it could call "into question the whole project."

Clark said that RAN is not asking consumers to boycott the banks. "It’s not at the point of asking people to cut up their credit cards," she remarked.

The bank campaign is building on a wider "no new coal" momentum. In a February speech to the National Press Club, James Hansen, chief climate scientist at NASA, recommended a moratorium on new coal-burning power plants.

But Goodell warned that urging banks to adopt an environmental consciousness in the absence of a national policy on greenhouse-gas emissions will only go so far. "At the moment, it’s still free to dump carbon dioxide into the atmosphere," he said. "There’s a lot of incentive to try to get coal plants built and grandfathered in before the regulations on carbon dioxide that everyone knows is coming are actually [here]."

Clark acknowledged the political failure of the Bush administration to force power companies to dump coal as an energy source. In the meantime, she said the message to the "Wall Street Seven" is clear: "The investments you make now are critical, and they matter, and we need you to redirect your resources towards sustainable alternatives and away from coal."

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The NewStandard ceased publishing on April 27, 2007.


Megan Tady is a staff journalist.

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