We know that banks like Chase, Citi and Bank of America are torching the planet by loaning billions to the fossil fuel industry. But Wall Street is helping raise billions for coal, oil & gas companies in another way: the bond market.
Since the Paris Agreement, banks have helped coal, oil and gas companies raise $2.7 trillion in the bond market. That’s more than the sharemarket value of Exxon, Chevron, BP, & Shell combined ― and multiplied by three.
You might be asking yourself: what’s a bond? Here’s how it works.
To raise capital, companies issue bonds that are purchased by investors. The bond is basically an IOU that is agreed on between the company and an investor ― the investor lends money to the corporation for a set period of time and charges interest on repayments.
To issue a bond, a company needs a dealmaker. That’s where banks come in. Banks act as dealmakers for companies by connecting them with investors that purchase the bonds the companies issue. Globally, big US banks raise more money on the bond market for fossil fuel companies than any other banks in the world.
Worse still, Citibank has committed to reduce its greenhouse gas emissions by 2030. But it excludes its activity in the bond market from its targets ― even JPMorgan Chase has included the bond market in its targets.