Four of the world’s biggest banks have left the Equator Principles, a set of minimum industry standards and safeguards for financial institutions to address environmental and social risks in countries where they finance fossil fuel and mining projects.
The Equator Principles have been around for more than two decades, and while not enforceable, they provide a basic framework of environmental standards that banks agreed would underpin financing deals on pollution-causing extractive projects.
The American banks – Citi, Bank of America, JPMorgan Chase and Wells Fargo – are listed as having left the group of institutions that have signed the principles.
The news was condemned by climate groups as “shocking” and “cowardly”.
“It is a very troubling move by some of the biggest fossil fuel financing banks in the world to abandon a bare minimum set of standards that banks themselves have set. It is both ethically shocking and financially irresponsible. It is becoming increasingly apparent these banks do not care about anything other than the bottom line,” said Richard Brooks, the climate finance director at Stand.earth.
“This is yet another display of cowardice that shows how Wall Street is bending to pressure from climate-denier extremists rather than upholding some of their most basic climate and human rights commitments,” said Adele Shraiman, the Sierra Club’s fossil-free finance campaign senior strategist.
Spokespeople for the four banks all said they would continue to be informed by those principles, Reuters reported. But the banks’ names have been removed from the Equator Principles list, which now includes 10 standards for aspects of projects ranging from initial due diligence to grievance mechanisms.
The move is part of an alarming trend among banks headquartered in the US of backpedaling on commitments on the climate and to vulnerable communities affected by their financing deals.
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