The largest bank in the U.S. will no longer fund drilling in the Arctic, according to its newly released its environmental and social policy framework.
JPMorgan Chase—the bank in question—announced the change Tuesday during its annual Investor Day. Executives at the company presented a litany of policy changes, including ending the financing of oil and gas drilling in the Arctic National Wildlife Refuge, one of the last pristine landscapes left in North America.
The bank also announced it would limit financing the coal sector and increase its investments in renewables. This comes days after an internal report by JPMorgan economists leaked showing that the climate crisis could “end human life as we know it.”
This move is yet another sign the finance sector is shifting away from fossil fuel funding, especially the most extreme forms of extraction. And getting JPMorgan Chase onboard is a particularly big deal.
The bank is the top funder of fossil fuel projects, according to an annual report released by the Rainforest Action Network. That it’s backing away from at least some fossil fuel investment reflects the reality that banks, investment firms, and even energy companies are slowly coming to the realisation that fossil fuels are a shitty investment.
The dirtiest, hardest-to-extract fuels have become the first to go. Just a day before JPMorgan Chase’s announcement, Teck Resources Limited withdrew its permit to build what would’ve been one of the world’s biggest tar sands mines Sunday because it wasn’t going to be financial sustainable.
Then there’s drilling in the Arctic, which has also faced stiff headwinds. While President Donald Trump has been working tirelessly to open to oil and gas interests, even the weight of the federal government might not be enough given the economic signals. To break even, companies would have to sell each barrel of oil for some $US20 ($30) more than the cost of an average barrel of oil, per one 2017 analysis.
JPMorgan Chase’s move comes a couple months after Goldman Sachs similarly updated its policy. However, the former goes a bit further by including gas while Goldman Sachs only banned funding oil extraction from its portfolio.
“This builds on past steps we’ve taken to facilitate clean financing for clients and source renewable energy for the firm’s own global power needs,” wrote spokesperson Andrew Grey, in an email to Gizmodo.
Advocates and indigenous leaders with the Gwich’in Nation have been focusing their energy on getting JPMorgan Chase to change its pollution-funding ways. For the Gwich’in, ending drilling in the refuge is essential. The 1.5 million acre coastal plain where this extraction is planned is sacred to the Gwich’in. The Porcupine caribou herd, which the Gwich’in hunt for food and sustenance, calves on the coastal plain, and studies have shown that these ungulates struggle when they’re surrounded by the roads and pipes that come along with the oil and gas industry.
“We’re thankful that the largest bank in the country recognises that the Arctic Refuge is no place for drilling,” Bernadette Demientieff, executive director of the Gwich’in Steering Committee, said in an emailed statement. “Disturbing these lands would devastate the Porcupine caribou herd and our people’s way of life.”