Three Rockefellers Say Banks Must Stop Financing Fossil Fuels
One hundred years ago, as a deadly influenza gripped the world and the stock market dropped precipitously, our great-grandfather John D. Rockefeller Jr. began investing in New York banks to diversify the family’s business away from fossil fuels in the midst of the economic uncertainty.
The result was the beginning of our family’s century-long association with what is today JPMorgan Chase, known in its earlier incarnation as the “Rockefeller Bank.”
The similarities today are striking. A pandemic has killed more than a million people across the world and shows no signs of abating, and unease surrounds the economy. But that anxiety is not merely a consequence of the pandemic. The long-term outlook for the economy is clouded by a warming climate and its foreseen consequences.
A task force for the Commodity Futures Trading Commission put it succinctly in a recent report: “Climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the American economy.”
That’s why the world’s biggest banks should do what our great-grandfather began to do in 1920 to spread the risks to his investments (though climate change was not yet on the horizon): move their businesses away from fossil fuels. Just as his father, John D. Rockefeller Sr., the oil tycoon and founder of Standard Oil, was a pivotal figure in the shaping of the oil industry and the modern corporation, so too must the financial leaders of today embrace innovation and move beyond the profits of fossil fuels to develop banking models that will excel in a zero-carbon world.
To date, the financial industry has largely headed in the opposite direction. Since 2016, 35 banks have funneled $2.7 trillion into fossil fuel companies and projects, a trajectory that will guarantee a world with runaway climate disruption. Of these banks, JPMorgan Chase has led the way by providing 36 percent more financing than the next largest fossil fuel financier, Wells Fargo.
On Tuesday, JPMorgan Chase made an announcement that appeared to align its activities with the Paris Climate Agreement without actually committing to curtail its lending activities to the fossil fuel sector, its major lever for change.
The bank’s plan to “establish intermediate emission targets for 2030” in its loan portfolio is a welcome gesture, and we look forward to further details promised by the bank in the spring. Those targets must include specific plans to end support for the expansion of fossil fuel infrastructure and set a timeline for phasing out support of companies that lack adequate plans to move away from fossil fuels.
Otherwise, Tuesday’s announcement amounts only to deftly passing the buck to the companies in the bank’s loan book.
JPMorgan Chase says it expects its clients to do what is necessary to help meet emissions goals of the Paris agreement. We, as clients of the bank, expect the bank to do the same.
Banks face intense competition for new generations of wealthy clients set to inherit huge sums from the world’s richest people — estimates range from $15 trillion to $68 trillion — and the future is clear: For the generations that will experience the worst impacts of climate change, it will be a simple decision to put their money in banks that profit from reducing warming and leave behind banks that continue to finance carbon-intensive energy.
To that end, we have started an organization, BankFWD. This network of individuals, businesses and foundations will use their banking choices and public standing to persuade major banks to phase out their financing of fossil fuels and lead on climate matters.
To earn the business of the future, banks must face climate reality. The prerequisite is a clear commitment to end support for fossil fuel companies that lack strategies to meet the goals of the Paris agreement. Yet to date, no major U.S. bank has made such a commitment: The podium remains wide open.
Our grandfather and great-uncle David Rockefeller spent 35 years at Chase Manhattan Bank — a predecessor of JPMorgan Chase — where he was chairman, chief executive officer and the bank’s largest single shareholder. He lived his life with a belief that business success and social responsibility go hand in hand. Like many in our generation today, we believe that service to humanity is the bedrock of profit.
Fossil fuels have been essential to the development of the modern world and its widespread, though unequal, prosperity. The next generation of innovators, working in low- and zero-carbon technologies and in high finance, will prosper from the greatest business and technological revolution in history.
Under the leadership of its current chairman and chief executive, Jamie Dimon, JPMorgan Chase became the United States’ most profitable bank. Yet short-term profitability alone is not equal to a transformational legacy. It is Mr. Dimon’s response to fossil fuels and the climate emergency that will determine his lasting reputation. Unlike businessmen of 100 years ago, leaders today cannot claim they didn’t know.
Daniel Growald, Peter Gill Case and Valerie Rockefeller are co-founders and co-chairs of BankFWD.
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