Banks, oil projects, the financial system – a seismic shift?

On May 17, 2021, the International Energy Agency (IEA) issued a report, causing the New York Times to run this front page headline: Nations Must Drop Fossil Fuels, Fast, World Energy Body Warns.

Fatih Birol, Director of the IEA, tweeted: “Our net zero pathway sees a historic surge in clean energy investment to $4 trillion in 2030. This creates millions of jobs & helps lift global economic growth by 0.4 percentage points year in the 2020s. The pathway has no need for investment in new fossil fuel supply projects.”

“And keep in mind that IEA has always underestimated growth in renewables. Dramatically!” Michael Mann, director of the Earth System Science Center at Pennsylvania State University and author of The New Climate War, tweeted.






Bill McKibben, founder of, commented: “Over 3 decades, there have been 3 crucial sentences in the official response to the climate crisis. Today the IEA added a 4th. This is a big big deal; it sets the energy course from here on out.”

The Financial Times’ headline proclaimed: The IEA has delivered an overdue message: Oil companies are on notice that the fossil fuel era is coming to an end. Summarizing the report, the venerable financial paper noted: “No new oil and gasfields are required” and “Many liquified natural gas supply projects being built are also not needed.” “Refinery closures are inevitable” and “It’s all a clear threat to company earnings” and “a threat also to the pension funds still addicted to these oil producers’ dividends.”

On May 20, 2021, President Biden signed an Executive Order on Climate-Related Financial Risk. 

Public Citizen summarizes the order: “The order requires the National Economic Council to develop a comprehensive climate finance strategy for the entire federal government, calls on Treasury Secretary Janet Yellen to draft a report with members of the Financial Stability Oversight Council of recommendations for reducing climate risks to financial stability, including the risks that banks create when they finance fossil fuels. It also directs the Office of Management and Budget to minimize climate-related risk in federal lending and procurement, and report on climate risks to the federal government’s budget. The order also encourages the Department of Labor to quickly reverse a set of damaging rules developed during the Trump era that would punish pensions and retirement plans for sustainable investing, a step that will ward off some risks to current and future retirees.”

So why are banks funding fossil fuel projects? Why are banks enabling pipelines that threaten water supplies and violate indigenous rights? Why are pension funds not divesting from these increasingly stranded fossil fuel assets?