Exiting Petrochemicals: Groups Call On Financial Institutions to Stop Financing Major Driver of Climate Change
Mounting risks raise serious questions for the petrochemical industryWASHINGTON – Today, environmental and policy groups released a report that provides guidance for financial institutions to end financing for petrochemical production. “Exiting Petrochemicals,” endorsed by over 70 organizations, demands financial institutions stop funding the expansion of petrochemicals capacity, including for plastics production in the United States. Continuing to fund the expansion of the petrochemicals industry will not only lock in pollution and emissions but could result in hundreds of billions of stranded assets.
The report, authored by Break Free from Plastics, Friends of the Earth, the Center for International Environmental Law, and the Texas Campaign for the Environment, calls on major financial institutions to:
- Stop Funding Petrochemicals: Immediately prohibit all financing for petrochemicals expansion and adopt absolute greenhouse gas emissions reduction targets.
- Require Clients to Adopt Transition Plans: Require that all petrochemical clients develop and publicly disclose transition plans consistent with limiting global warming to 1.5°C above pre-industrial levels, reversing biodiversity loss and preventing toxic pollution.
- Stop Financing Environmental Racism and Injustice: Adopt environmental justice policies to end financing for petrochemical projects in communities of color and low-income communities.
- Respect Human Rights and Indigenous Sovereignty: End financing for any petrochemical company that violates environmental regulations, human rights, or Indigenous Peoples’ sovereignty, and their right to Free, Prior, and Informed Consent.
- Responsibly Exit the Petrochemicals Supply Chain: Stop financing fracking, rapidly phase out all fossil fuel financing, and adopt policies guided by international human rights law.
The report findings reinforce the need for the plastics treaty negotiations to deliver legally binding measures by the end of negotiations to control the expansion of plastic production and substantially reduce it, including as an important regulatory measure to prevent investment losses and risks.
“The petrochemical industry and its toxic products pose an urgent threat to human health and the global climate. Following unprecedented hurricanes and the hottest summer on record, the United States now faces the potential buildout of 120 new petrochemical facilities and expansions, which will only exacerbate these threats” said Brandon Marks, Petrochemicals Finance Campaigner at the Center for International Environmental Law, “Regulatory, legal, reputational, and financial risks are rapidly mounting for the petrochemical sector, including oversupplied and unproven markets for plastics and ammonia. Choosing to finance and insure these projects is not just irresponsible; it’s a poor investment. Banks, insurers, and investors must stop financing petrochemicals now.”
“The communities most impacted by these developments, often low-income and communities of color, bear the brunt of pollution and health risks. We must hold financial institutions accountable for their role in financing these harmful projects,” said Sharon Lavigne, Founder and Executive Director at RISE St. James. “It’s time to stop funding environmental racism and start investing in a cleaner, safer future for everyone.”
“Given the terrible damage that I have seen corporations like Formosa Plastics do to communities, workers, fisheries, bays, and fishermen, the line has to be drawn: No more funding for plastics & petrochemicals!” said Diane Wilson, Executive Director of the San Antonio Bay Estuarine Waterkeeper and fourth-generation fisherwoman.
“Plastics have long been associated with ocean pollution; but it’s clear now they pollute absolutely everything,” said Paloma Henriques, Senior Petrochemicals Campaigner at Friends of the Earth, “Plastics and the 16,000 chemicals used to make them contaminate food, water, air, blood, and even breastmilk. The petrochemical industry poses an existential threat to public health, biodiversity, and climate stability. With a pending Global Plastics Treaty and increasing national and local regulations, the financial sector has both a moral obligation and a fiduciary duty to responsibly exit the petrochemical industry.”
“Much of the infrastructure required for the expansion of the petrochemical industry is being proposed in working class and communities of color in the Gulf South and the Ohio River Valley, areas which are already overburdened with toxic industrial pollution,” said Matthew Kennedy, Petrochemical Campaign Coordinator at Texas Campaign for the Environment. “We are demanding that financial institutions stop perpetuating this environmental racism by phasing out financing of the petrochemical sector.”
Communications contact: Erika Seiber, [email protected]