A new report by stakeholder intelligence firm alva has revealed that fossil fuel financing currently has the strongest negative impact of all climate based issues on the reputation of US-UK investment banks.
The report looks into the reputational impact that is caused to big banks in relation to climate change. It ranks by stakeholder sentiment issues on US-UK banks Barclays, Bank of America, Blackrock, Citibank, Deutsche Bank, HSBC, and JP Morgan Chase.
Data taken from the period since October 2021 has been gathered and analysed by alva’s own stakeholder sentiment methodology including millions of media content pieces across traditional and social media, NGO reports and regulatory data. The dataset is analysed using alva’s NLP sentiment scoring methodology, and each article was coded with a climate issue credited as the primary motivation behind a given protest. alva’s scores are ranked between -100 and 100.
alva calculated that fossil fuels have had an impact of -14 on the reputation score of investment banks, mainly due to the fire of key antagonists Extinction Rebellion, Rage for Change and 350.org. JP Morgan attracted particular focus from Extinction Rebellion protestors at COP26 for its investments in fossil fuel projects.
Fossil fuel financing comes ahead of directed bank protests (-12) and greenwashing (-4) (see full table below).
Table: Top five climate issues impacting US-UK investment banks reputations:
|1. Fossil fuel financing||-14|
|2. Directed bank protests||-12|
|4. Indigenous exploitation||-1|
Banks have invested $585bn into new coal plants since 2017. Citigroup and JP Morgan were the largest financiers, with $8.8bn and $5.2bn respectively. Barclays has financed $5.6bn in new fossil fuel projects in the 10 months from January to COP26, more than any UK bank. HSBC invested $5.3bn for the same period.
Victoria Walsh, Managing Director of Financial Services, alva, commented: “Despite many banks launching high profile net zero commitments, powerful protest groups like Extinction Rebellion remain unconvinced of the authenticity of their intent towards cleaning up their investments. Corporate environmental credentials are now expected to form the backbone of plans not just for the future, but the present, too. Lofty promises with little detail and no real c-suite backing will no longer cut it. Until banks make this change, the issue will continue to have a damaging effect on the sector’s reputational score.”
The news comes as other alva research reveals that the impact on customers due to the increasing price of gas is a leading cause of negative public sentiment, with an impact of -20 on the overall gas price discussion score. This follows reports that rising wholesale gas and power prices will push families into fuel poverty.