Big banks are shorting the climate - at what cost?
In finance industry terms, “short-selling,” or shorting, is a transaction through which an investor profits if a company or asset declines in value. After Paris, financing fossil fuels is tantamount to shorting the climate. Financial institutions that support business-as-usual for the fossil fuel industry are placing their bets on companies whose long-term success depends on runaway climate change. If governments follow through on the Paris Agreement and enact policies to limit warming to 1.5 or even 2°C, investments in future coal infrastructure, LNG terminals, and extreme oil projects will be deeply unprofitable. And while banks and investors may be able to wring fees and profits from fossil fuel companies over the short term, they will do so at the expense of some of the most vulnerable communities on the planet who live in or near fossil fuel “sacrifice zones” around the world.