Press Release
FOR IMMEDIATE RELEASE
May 17, 2022
Contact
Annette Raveneau, carbonbankroll@spitfirestrategies.com
Corporate Cash Is Largest Source of Emissions and
Powerful Climate Lever for Many of the World’s Largest Companies
Breakthrough report clarifies how company cash held in large banks and investments works against corporate climate goals and highlights opportunity to catalyze transformation in the financial system.
WASHINGTON – As companies increasingly focus on combating climate change, a new report reveals that for many of the world’s largest companies, the carbon footprint generated by their investments and cash held in big banks are a significant source, and sometimes their largest source, of emissions. “The Carbon Bankroll: The Climate Impact and Untapped Power of Corporate Cash” provides groundbreaking analysis of the hidden climate impact of corporate finances, making it possible to understand the scale of emissions generated by a company’s cash, investments, and financial practices.
Using 10 major corporations’ publicly available data, the report illuminates how the financial system–particularly the banking sector, which uses client cash to finance fossil fuels– undermines the sustainability efforts of climate-conscious companies. The report finds that for several companies, including Google, Meta, and PayPal, the emissions generated by their cash and investments exceed all their other emissions combined.
“The Carbon Bankroll,” jointly published by the Climate Safe Lending Network (CSLN), The Outdoor Policy Outfit (TOPO), and BankFWD, allows companies to estimate how much their financial practices work against their ambitious goals to rein in emissions from direct and indirect operations across their value chains. The analysis also suggests how companies can leverage their financial practices to accelerate the decarbonization of the financial sector, which is critical to achieving the global climate goal of limiting warming to 1.5°C.
“Tackling climate change effectively at this critical time depends on ensuring the financial system aligns with maintaining a livable planet for generations to come,” said James Vaccaro, executive director of CSLN. “By helping businesses recognise how the financial system converts the money they manage day-to-day into the activities that shape our economies for the decades to come, with the associated positive and negative impacts, we hope to stimulate a new dialogue between corporations and the finance sector that could super-charge the net-zero transition.”
The recent growth of environmentally and socially responsible investments reflects companies’ increasing recognition that how they bank and invest their money has an impact on people and the planet. The report’s research and replicable methodology, which was produced in partnership with finance data experts at leading climate solutions provider South Pole, fills critical data gaps that underscore the magnitude of the emissions generated by corporate cash and investments. By discovering the enormous scale of this emissions source, the report emphasizes the need for companies to prioritize the decarbonization of their cash and investments. Key findings include:
For some of the world’s largest companies, including Google, Meta, Microsoft, and Salesforce, their cash holdings are their largest source of emissions, increasing total emissions by 91% to 112% when compared to most recently reported emissions.
For companies with more carbon-intensive operations such as Amazon and Johnson & Johnson, their cash holdings still constitute one of their largest emissions sources, increasing total emissions by 11%-15% compared to most recently reported emissions.
In 2021, the emissions generated by Microsoft’s $130 billion held in cash and investments was comparable to the cumulative emissions generated by the manufacturing, transportation, and use of every Microsoft product in the world.
In 2020, Amazon’s $81 billion held in cash and short-term investments generated more emissions than the purchased energy used to power every Amazon facility around the world, which includes its data centers, fulfillment centers, physical stores, and other facilities.
“The companies highlighted in this report are all environmental leaders that have been working for years to combat climate change and decarbonize their supply chains,” said Paul Moinester, executive director of TOPO. “This report reveals that these companies’ substantial climate accomplishments are being severely undermined by a misaligned financial system that is channeling hundreds of billions of corporate US dollars into the carbon-intensive sectors driving the climate crisis.”
“The Carbon Bankroll” suggests that just as companies have worked to decarbonize their operational and energy supply chains, they can work to decarbonize their financial supply chain by pushing their banks to decrease financing for fossil fuels, or by moving their money. Doing so, the report explains, would help companies achieve their corporate climate goals and improve the financial sector’s climate performance at a time when large banks have continued to finance fossil fuel expansion at levels that are incompatible with their own climate commitments.
“Every individual and business can impact the world around them through their finances in one of three ways, via their investments, their philanthropy, and their banking. The power of this report is that its data tell us that the lever we use the least turns out to be the most powerful tool we have–where and how we choose to bank,” said Valerie Rockefeller, co-chair of BankFWD and board chair of the Rockefeller Brothers Fund and Rockefeller Philanthropy Advisors. “Bank choice is a largely untapped frontier for climate leadership with massive potential for impact. We’ll be proud to support the first companies that seize this leadership opportunity and let banks know they expect serious climate action.”
“Financial institutions have a pivotal role to play in achieving our global net zero targets, and leading businesses can facilitate this through a better understanding of the emissions associated with their cash and investments. We hope that our research helps illustrate the urgent need for greater disclosure from banks regarding their financed and facilitated emissions, and that it inspires deeper collaboration across industries to develop and adopt harmonized reporting and accounting standards for climate action,” said Andres Casallas Ramirez, director of Sustainable Finance at South Pole.
More than a report, “The Carbon Bankroll” is also an invitation to companies to join a forthcoming business initiative that will develop a comprehensive playbook for how companies can drive positive change through their financial supply chains. Central to this collaborative effort will be harnessing corporations’ world-leading capacity to innovate, scale new ideas, and decarbonize supply chains.
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About Climate Safe Lending Network: The Climate Safe Lending Network (CSLN) is an international multi-stakeholder collaborative dedicated to accelerating the decarbonization of the banking sector to secure a climate-safe world. The Network brings together senior leaders and changemakers from across banks, NGOs, academics, investors, businesses, and policy experts, to share insights and collectively explore how to play their optimum role in accelerating change. The Network runs a fellowship program for climate intrapreneurs from banks across the world, a policy initiative focused on regulatory and policy intervention, and brings together diverse perspectives on climate strategies relevant for banks into publications such as The Good Transition Plan (launched at COP26).
About The Outdoor Policy Outfit: The Outdoor Policy Outfit (TOPO) is a “think and do” tank that creates and implements groundbreaking solutions to the systemic problems driving the environmental crisis. As a leader in the responsible finance space, TOPO specializes in building levers that harness the untapped power of consumers to transform the financial sector into an engine for environmental and social progress. From spearheading the Carbon Bankroll initiative to developing a first-of-its-kind global banking certification program, TOPO's team of problem solvers excel at building audacious solutions that meet the scale, complexity, and gravity of the systemic challenges we face.
About BankFWD: BankFWD is a sustainable finance initiative founded by the members of the Rockefeller family dedicated to accelerating the transition to a just, zero-carbon economy by influencing banks to align their business strategies with the 1.5° target of the Paris Climate Agreement. BankFWD works to accomplish this goal by building a network of individuals and organizations united in the belief that by using their collective wealth and public standing, they can persuade major banks to lead on climate by phasing out financing for fossil fuels.
About South Pole: South Pole, a social enterprise recognised by the World Economic Forum's Schwab Foundation, is the world's leading climate solutions provider and carbon project developer. Since its creation in 2006, it has developed nearly 1,000 projects in over 50 countries to reduce over one gigaton of CO2 emissions, and to provide social benefits to less privileged communities who are particularly vulnerable to climate change. South Pole also advises thousands of leading companies on their sustainability journeys to achieve net zero emissions. With its global Climate Solutions platform, South Pole develops and implements comprehensive strategies that turn climate action into long-term business opportunities for companies, governments, and organizations around the world.
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