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Illustration: Sarah Grillo/Axios

Four of America’s biggest banks are backing a new nonprofit initiative to leverage the financial sector toward achieving climate-change goals.

Driving the news: The Rocky Mountain Institute (RMI) is launching a center focused on climate that will be supported by Wells Fargo, Goldman Sachs, Bank of America and JPMorgan Chase.

Why it matters: Banks have increased their rhetoric on the threat of climate change recently, but they still finance billions of dollars for the oil, natural gas and coal industries, which account for 80% of the world’s energy consumption. This initiative is the latest sign of how the financial sector is (slowly and unevenly) embracing a transition to cleaner technologies.

How it works: The Center for Climate Aligned Finance will, among other things, try to help fossil-fuel companies and other carbon-intensive sectors aggressively cut emissions with the input of banks and shareholders.

  • RMI is directing 10 employees to work on the initiative and plans to hire more, which will be the bulk of the banks' financial role.
  • Paul Bodnar, managing director for the group’s climate finance, said he hopes the initiative would build on the Poseidon Principles, a framework launched last year that integrates climate considerations into shipping finance, which RMI was also involved in helping craft.

But, but, but: Details were hard to come by, including how much money the banks were putting toward the effort. During a press call Wednesday, no bank officials said explicitly that they would change their lending and investment practices based on the initiative.

  • The lack of details and funding disclosure could lead to calls that the banks are greenwashing.
  • Bodnar said his group doesn’t typically disclose funding amounts.
  • Recent large donors to the nonprofit include Bloomberg Philanthropies and Wells Fargo Foundation, both with contributions of over $1 million, according to RMI’s 2019 financial report.

"I don't think we should let any center they [the banks] participate in take our eye off the ball of the role of financial institutions in accelerating emissions through the companies they invest in and finance," said Ilmi Granoff, director sustainable finance at ClimateWorks Foundation, which donates to RMI. “But I do think it’s meaningful that banks are signing up to work with a partner like RMI on portfolio alignment and the use of finance and investment to accelerate decarbonization.”

By the numbers: All of the banks backing this new initiative finance billions of dollars worth of fossil-fuel projects a year, according to an annual tracker by environmental group Rainforest Action Network.

  • JPMorgan is the world’s largest such funder, putting an annual average of $67 billion into the sector between 2016 and 2019, per RAN.
  • Wells Fargo came in second with an annual average of $49 billion.
  • RMI’s annual revenue is around $56 million, per its recent financial statement.

What they’re saying: “We have been changing our business practice and lending practices over the years and we’re supporting RMI because we think there is still more than we can do,” said Marisa Buchanan, managing director and head of sustainability at JPMorgan Chase.

Go deeper:

Go deeper

Ben Geman, author of Generate
Oct 16, 2020 - Energy & Environment

What investors think about the future of fossil fuels

Data: BCG Center for Energy Impact; Chart: Axios Visuals

Investors in the oil-and-gas industry want companies to get greener, and they're losing faith that the sector, which is underperforming broader market indices, is a good long-term bet, per a new Boston Consulting Group survey of investors.

Why it matters: The investor views come as the industry is facing its highest levels of uncertainty and environmental pressure in a long time, if ever.

Erica Pandey, author of @Work
1 hour ago - Economy & Business

The limits of Biden's plan to cancel student debt

Data: New York Fed Consumer Credit Panel/Equifax; Chart: Axios Visuals

There’s a growing consensus among Americans who want President Biden to cancel student debt — but addressing the ballooning debt burden is much more complicated than it seems.

Why it matters: Student debt is stopping millions of Americans from buying homes, buying cars and starting families. And the crisis is rapidly getting worse.

Why made-for-TV moments matter during the pandemic

Photo illustration: Sarah Grillo/Axios. Photos: Erin Schaff-Pool, Biden Inaugural Committee via Getty Images

In a world where most Americans are isolated and forced to laugh, cry and mourn without friends or family by their side, viral moments can offer critical opportunities to unite the country or divide it.

Driving the news: President Biden's inauguration was produced to create several made-for-social viral moments, a tactic similar to what the Democratic National Committee and the Biden campaign pulled off during the Democratic National Convention.