Money talks, and that’s why environmental activists—and, more specifically, indigenous peoples—have been pressuring banks for years to stop throwing their money toward fossil fuel extraction projects. Finally, major banks are starting to listen. Goldman Sachs announced Sunday that it’s finally listening and won’t fund new coal projects globally or any extraction projects in the Arctic, including in the pristine Arctic National Wildlife Refuge.
This is a big freaking deal. Goldman Sachs is one of the world’s top funders to the oil and gas industry, according to an annual report by the Rainforest Action Network. This is the first time a major U.S. bank—think JPMorgan Chase, Citi, and Bank of America—has responded to environmentalist pressure to stop funding extraction projects. Environmental groups have been cranking up the heat on banks since at least the early 2000s, and the efforts really ratcheted up during the indigenous-led Standing Rock protests against the Dakota Access Pipeline.
The main argument is that banks are funding the climate crisis every time they loan money to fossil fuel companies. Along with that, they support human rights violations when they give money to companies that take land from indigenous people and engage in violent suppression. In the case of the Dakota Access Pipeline in North Dakota, that meant supporting a brutal police force that met protestors with water hoses and rubber bullets in 2016.
In response, European institutions such as BNP Paribas SA in France and a Norwegian investment group pulled their money out of the project or the project’s developers in 2017. Unfortunately, the response from U.S. institutions was pretty underwhelming. U.S. Bank announced it would end financing oil and gas projects in 2017, but it’s not one of the major funders of fossil fuels in the U.S. in the first place. The biggest contributor to the fossil fuel industry for the past three years has been JPMorgan Chase, which kicked the industry $US195.66 ($284) billion over that period. But Goldman Sachs has also been a major funder, ranking in as the twelfth biggest contributor over that period with nearly $US60 ($87) billion in fossil fuel financing.
Work to protect the Arctic National Wildlife Refuge, in particular, kicked off in October 2018 when members of the Gwich’in First Nation, whose culture and livelihoods depend on the refuge staying intact, met with officials from JPMorgan Chase, Barclays, Goldman Sachs, Bank of America, Morgan Stanley, Credit Suisse, UBS, and Citi to explain the risks financing oil and gas exploration there would pose. So far, Goldman Sachs is the first and only U.S. bank to heed their call.
U.K.-based Barclays has taken similar pledges as have more than a dozen other banks around the world, according to the Sierra Club. But getting an American bank onboard matters because they’re the big problem here. Six U.S. “banking giants,” as Rainforest Action Network describes them, account for 37 per cent of all global fossil fuel financing since the Paris Agreement came to fruition in 2015.
“When you talk about the ways that the United States is driving climate change, private finance, including banks, has to absolutely be at the heart of that ,” Jason Opeña Disterhoft, a climate and energy senior campaigner at the Rainforest Action Network, told Gizmodo. “The outrage around what was happening at Standing Rock absolutely carried over to the banks that were funding the project and, to a certain extent, to the banks that were funding the company, [Energy Transfer Partners], the company behind the project. That was an indigenous-led movement.”
In Goldman Sachs’ Environmental Policy Framework, the company highlights the need to give indigenous peoples the attention they deserve. The refuge is vital to the “subsistence livelihoods of indigenous peoples groups that have populated certain areas in the region for centuries,” the framework reads. The porcupine caribou herd calves in the 1.5 million-acre (607,028-hectare) coastal plain where the U.S. Trump administration wants to begin drilling for oil and petrol ASAP. These animals are not just a key part of the greater ecosystem; they’re a major food source and cultural icon for the Gwich’in people.
“Drilling in the Arctic Refuge would permanently destroy the primary food source of the Gwich’in people, our culture, and our way of life,” said Bernadette Demientieff, executive director of the Gwich’in Steering Committee, in a Sierra Club statement. “The Trump administration may have made up their minds about selling off this sacred place, but the fight is far from over. We’re glad to see Goldman Sachs recognise that the Arctic Refuge is no place for drilling and we hope that other banks, and the oil companies they fund, will follow their lead.”
Goldman Sachs goes on in its statement:
“We will decline any financing transaction that directly supports new upstream Arctic oil exploration or development. This includes but is not limited to the Arctic National Wildlife Refuge.”
That’s not just because of the people who live there. This is a bank, so its decision also comes down to money. The Arctic is a risky investment, explained Ben Cushing, a campaigner with the Sierra Club. Investing in this type of extraction not only gives banks a bad rep, but it also poses a potential loss for them because building oil and gas infrastructure in the Arctic National Wildlife Refuge would be costly upfront. This is a remote area with no roads. Developers gotta start from scratch, and there’s always the potential for environmental issues (such as a spill or leak) that could shut down operations.
Really, though, the truth of the matter is that fossil fuels are a part of the past. Climate change is here, and the only sustainable way to move forward is to abandon these nasty arse fuels and invest in clean energy. We need banks to put their money toward solar and wind, not tar sands or coal. Given the enormous stakes of climate change, it’s not a question of if the energy transition will happen but when.
“I think most people see the writing on the wall for fossil fuels and the oil industry in the coming decades,” Cushing told Gizmodo. “And the idea that a decade from now we would still be wanting to get oil from places like the Arctic National Wildlife Refuge, I think, strikes many investors as absurd on its face.”
Absurd it is. Will the rest of the banks step up? That’s the hope. The rest of the banks in the U.S. will look real shady if they don’t follow in Goldman Sachs’ footsteps. The people of the Gwich’in Nation are counting on them to and so are the millions of Americans this refuge rightly belongs to. These are our public lands, and they should not be up for sale.
Gizmodo has reached out to Goldman Sachs for comment and will update if we hear back.