Several climate groups across the globe were left reeling after four of the largest banks in the United States abandoned key industry safeguards and standards that sought to address the social and environmental risks posed by financial institutions when they invest in mining and fossil fuel projects. Dubbed the Equator Principles, these industry standards have been around for more than two decades and create a simple environmental-standards framework for addressing financial deals involving extractor projects that cause pollution.
Although the standards aren’t enforceable, the majority of banking institutions worldwide agree to abide by the standards to help mitigate the existential threat of climate change.
After more than a century of burning fossil fuels, humanity has induced premature atmospheric heating, leading to a surge of extreme weather events in a growing number of regions. By attempting to reduce investment in new mining and fossil-fuel-extraction projects, the bare-minimum environmental standards could potentially contribute to a reduction in greenhouse emissions and help slow down the rate of climate change.
However, the exit of JPMorgan Chase, Bank of America, Wells Fargo and Citi Bank from the group of banks that had signed the Equator Principles has put a significant wrench into global plans to curb greenhouse gas emissions. Some climate groups have referred to the shocking exit as “cowardly” and say that it is troubling for banks to abandon the environmental standards they had set for themselves.
Stand.earth’s climate finance director Richard Brooks says it is increasingly clear that banks are only interested in the bottom line and called the decision to abandon the eco standards “financially irresponsible and ethically shocking.”
The move is one more “display of cowardice” from a Wall Street that is caving to climate-denier extremist pressure, says Adele Shraiman, the fossil finance campaign senior strategist at Sierra Club.
As all four banks that abandoned the Equator Principles are among the largest on the globe, their decision has dealt a major blow to global climate-change efforts. According to a report from Reuters, spokespeople from all four banks have revealed that despite dropping the environmental standards, the institutions will still use the regulations to inform their business decisions.
Even so, the exit indicates a growing trend among U.S.-based financial institutions of backpedaling climate-change, green-energy and social-responsibility commitments. Several Republican-led states have also begun boycotting investors and banks that incorporate environmental, social and governance (“ESG”) into their investment strategies.
Despite the backlash against ESG implementation and investing, there is a growing number of companies such as Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) that are taking on the challenges of doing business in a way that is not only profitable but is also responsible and sustainable from an ESG point of view.
NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF
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