Big Banks Promise to Go Greener
This week, we talk about how banks are tackling climate change.
Welcome to our weekly chat about the environmental and social issues that influence the way we work, spend our money and live our lives. We're your hosts, Maitane Sardon and Dieter Holger. Want to get our newsletter every Wednesday? Hit the subscribe button in the upper right corner and please share with your friends!
Hi, Dieter! This week we have to keep talking about climate change, an issue that is on business leaders’ minds. JPMorgan Chase, the biggest U.S. bank and one of the biggest fossil-fuel financiers, has pledged to push its clients to align with the Paris Agreement on climate change and reach net-zero emissions by 2050. This is important because banks have the ability to steer their funding resources toward more sustainable activities that can help reduce global warming.
Yes! JPMorgan said it is going to set emissions targets for the companies in its financing portfolio and will start measuring their progress. It also plans to invest in technologies for carbon-emissions reduction and engage with clients to help them lower their own carbon footprints. It said, however, that it won’t stop backing oil-and-gas companies as they are an important part of the economy.
This is another sign that banks are facing pressure from regulators, investors and clients, who are more aware of the challenges and financial risks associated with climate change. We’ve seen a number of banks announcing changes to their lending practices and move away from the most polluting industries, such as coal. Which other banks have recently made such commitments, Dieter?
British bank Barclays said in March that it would aim to be a net-zero bank by 2050. This means that the total carbon emissions of the companies and projects it finances will equal zero. It will achieve this by matching the financing of fossil fuels with greener companies and slowly reducing its exposure to the most highly polluting sectors. Swiss bank UBS and Natwest Group (formerly RBS) have also tightened their restrictions on fossil fuels. Citigroup said earlier this year that it would walk away from clients that aren’t taking climate change seriously.
That reminds me! Banks are also throwing their weight to fight another big issue: racial inequality. Bank of America is spending $1 billion over four years to boost lending, housing and neighborhood revitalization and financial services to minority groups in the U.S. Anything else catching your eye in the finance world, Dieter?
You bet. Cryptocurrency traders in the U.K. probably aren’t happy after the country decided to ban derivatives linked to cryptocurrencies starting in January. Derivatives can be complex, but they are often just ways to place bets on what an asset like a stock, or Bitcoin in this case, will buy and sell for. Two big examples are future contracts, under which you agree to buy something for a certain price before the market opens, and put options, which let you bet against a stock and sell it when it drops to a specific cost. News of the ban sent the stocks of financial-exchange firms Intercontinental Exchange and CME Group down. Both sell Bitcoin futures.
What am I looking at? The chart above shows the cost to buy one Bitcoin in dollars since the beginning of this year. Like the stock market, Bitcoin prices have been volatile during the pandemic. Prices have dropped 27% and shot up as much as 17% in a single day.
That sounds like another roadblock for the cryptocurrency movement. One more thing I wanted to talk about is how the pandemic has changed eating habits. Top brass at food companies like Campbell Soup, Kellogg and Mars say that people are now cooking more and eating healthier after the coronavirus-related lockdowns, although there was a spike in comfort food sales at the beginning of the crisis. They expect these habits to last post-pandemic.
The lockdown definitely made me more adventurous in the kitchen. Now let’s open it up to our readers: How has the pandemic changed your daily habits?
Share your thoughts below, email us or catch us on Twitter. Your words could appear in our next edition! Have a great week and remember to wash your hands. 👋
Meet the team:
Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music, skateboarding and yoga (but I’m bad at both). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardomaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy