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Bank of America pledged to stop financing coal. Now it’s backtracking

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By illuminem briefings 🌎

· 2 min read


illuminem summarizes for you the essential news of the day. Read the full piece on New York Times or enjoy below:

🗞️ Driving the news: Bank of America has updated its environment and social-risk policy, stepping back from its previous commitments to not finance new coal mines, coal-burning power plants, or Arctic drilling projects
The bank now states these projects will undergo "enhanced due diligence" rather than being outright rejected.

🔭 The context: This policy revision comes amid growing pressure from Republican lawmakers and financial regulations in states like Texas and West Virginia, aimed at countering corporate sustainability efforts
The backlash is part of a broader critique against what is termed "woke capitalism," influencing major banks and investment firms to reconsider their stance on environmental and social governance (E.S.G.) principles

🌍 Why it matters for the planet: The move by Bank of America and similar shifts by other financial institutions signal a potential slowdown in the momentum towards greener financing. This retreat could impact global efforts to combat climate change, especially considering the significant role banks play in funding energy projects.

⏭️ What's next: The banking industry's response to political and public pressure raises questions about the future of sustainable finance and the ability of the financial sector to support the transition to a low-carbon economy. It also puts a spotlight on the challenges facing E.S.G. initiatives amid a polarized political landscape.

💬 One quote: "Bank of America is sending a message to its clients that it’s OK to take up new fossil-fuel assets," said Lucie Pinson, director of Reclaim Finance.

📈 One stat: In the seven years following the Paris Agreement, the world’s 60 largest banks provided about $5.5 trillion in financing to the fossil-fuel industry.

Click for more news covering the latest on sustainable finance.

 

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