At the 28th United Nations Climate Change Conference, COP 28, for the very first time, the participants drafted a pact with the words “fossil fuels” in it. The conference ran several days long, wrapping up on December 13, in order to create this achievement – but many were bitterly disappointed that it did not actually call for the phaseout of fossil fuels.
COP, or the Conference of the Parties, is the annual meeting of the member countries that are part of the United Nations Framework Convention on Climate Change (UNFCCC). Attendees at the conference included representatives from nearly 200 governments, all there to hatch plans to respond to climate change. Those plans need funding, which is why corporations, big banks, and investment firms topped the list of attendees, second only to the #1 most represented job title at COP28—oil lobbyist.
The contradictory cast of characters also included COP28’s president, Sultan Al Jaber, whose day job is chief executive of UAE’s national oil company, Adnoc. The choice of location, Dubai, United Arab Emirates, likely played a role in shaping the dynamics of COP28.
Banks are the engine of the economy and need a seat at the decision-making table to turn climate plans into climate solutions. However, their activities outside of COP look very different.
In the seven years post-Paris climate agreement, when countries agreed to hold global temperature increase to below 2°C, the world’s top 60 private-sector banks threw a whopping $5.5 trillion into fossil fuels.
But hey, if they can fund the problem, can’t they also fund the solution?
How can developing countries without the resources for going green hope to pitch in with a global carbon-reduction effort? COP28 negotiators zeroed in on Article 6 of the Paris Agreement, which allows countries to team up to “create a robust and transparent global carbon market, accelerate emission reductions, and support developing nations in building resilience to climate change.”
Six new countries – Australia, Estonia, Italy, Portugal, Switzerland, and the US – pledged an additional $3.5 billion in funding at COP28 to the Green Climate Fund. This funds ambitious climate action, speeds up access to finance and supports the transition to a carbon-free future, for some of the most climate-endangered regions.
Major international financial institutions and countries made new commitments to offer climate-resilient debt clauses (CRDCs) in their lending agreements. These clauses would offer temporary relief from bills when developing countries are hit with climate catastrophes.
According to COP28’s round-up of Finance Day:
“This marks significant progress to reform the global climate finance architecture by making climate finance available, accessible, and affordable. This has been the central vision of the COP28 UAE Declaration on a Global Climate Finance Framework launched at the World Climate Action Summit at the beginning of COP28.”
Additionally, some complicated manoeuvring allowed countries to leverage some literal rainy-day funds at the IMF called Special Drawing Rights (SDRs) to help developing countries afford the climate transition.
The UN delegation at COP28 ended by committing explicitly — for the very first time — to ramping up renewable energy and specifically to moving away from burning fossil fuels like coal, oil and gas.
“Whilst we didn’t turn the page on the fossil fuel era in Dubai, this outcome is the beginning of the end,” said UN Climate Change Executive Secretary Simon Stiell in his closing speech.
Critics of the pact say it didn’t go far enough. Environmentalist and former vice president of the United States Al Gore said, “The decision at COP28 to finally recognise that the climate crisis is, at its heart, a fossil fuel crisis is an important milestone. But...it is also the bare minimum we need and is long overdue.”
Many of the gains of this year's COP 28 came with a “but” attached. We agree to move away from fossil fuels, but there aren’t concrete action plans in place. We have 198 countries gathered to work towards a greener future, but a significant number of attendees took advantage of their attendance to make profits rather than change. One thing that has no buts about it — not everyone at COP28 was there to solve climate change.
None of the bank sponsors of COP28 have committed to a net zero target as set by the UN-backed Science Based Targets initiative (SBTi). Instead, sponsors such as Bank of America, HSBC and Citi continue to be some of the largest financiers of fossil fuel projects. Corporate plans for science-based net zero targets are widely accepted as a way for a company to signal its true commitment to a greener future – while funding fossil fuels is anything but.
According to CEO of SBTi, Luiz Amaral, “By having science-based targets, companies share common frameworks for decarbonization — a common language and scientifically-validated rate of reduction. Many companies all working together at the same time with the same aim can create the seismic change required to avoid the worst effects of climate change."
You would think the financial institutions publicly sponsoring COP would put their money where their mouth is. Not so, as most of the corporations and financial institutions sponsoring the UN climate talks have not signed on to meet these targets, calling into question their motives for sponsorship. Are they more concerned with taking green action or aligning their brands with green virtues?
We can already get a sense of their strategies from Deutsche Bank, a COP28 attendee. While Deutsche Bank is halting coal investing, they are still investing in oil and gas. And in November, they publicly stated that environmental index funds should hold stock in fossil fuels.
Just before the start of the convention, a leaked memo revealed that the UAE planned to use the conference to negotiate new oil deals with 15 nations. If it sounds like a strategy that would be the envy of a supervillain, it is. To make matters (and optics) worse, COP28 President Sultan Al Jaber asserted during an interview the next day that there was “no science out there, or no scenario out there, that says that the phase-out of fossil fuels is what’s going to achieve 1.5C.”
For a slew of participants driven by greed rather than eco-minded futurism, COP28 Dubai looked like an open-air market for fossil fuel brokers to come and deal.
With all this in mind, scepticism of what comes next is understandable. The conference ended without any new concrete plan to eliminate the use of fossil fuels, which adds to growing concern that countries lack the will and urgency to take the action needed to prevent climate chaos.
Innovations in climate technology, greater investment in resilience for developing countries, and broader social awareness are great outcomes. But without a faster track to reduce the amount of carbon dioxide emitted, these plans may just as soon disappear into thin air.
Vote with your dollars. And your feet. Take your money out of banks investing in fossil fuels. Use bank.green to see how your bank does on climate and take the pledge to move your money to fund a greener future.
Banks live and die on their reputations. Mass movements of money to fossil-free competitors puts those reputations at grave risk. By moving your money to a sustainable financial institution, you will:
Send a message to your bank that it must defund fossil fuels
Join a fast-growing movement of consumers standing up for their future
Take a critical climate action with profound effects