The complaint, filed by Friends of the Earth United States, argues that EXIM is contravening the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct by continuing to pour billions into fossil fuel projects, while taking no effective action to reduce its emissions or report on its emissions footprint. This comes as EXIM’s financing for fossil fuels soars ahead of the COP28 UN Climate Summit in Dubai, with 2023 financing alone nearing $1 billion after a range of controversial financing decisions this year. 

Kate DeAngelis, Senior International Finance Program Manager at Friends of the Earth United States, said this:

 As we rapidly approach the 1.5 degree mark, EXIM unashamedly continues to destroy our planet. The agency has repeatedly failed to take responsibility for how its support of fossil fuels impacts communities and worsens climate change. Instead, taxpayers are expected to look the other way as EXIM funds close to $1 billion in fossil fuel projects all over the world. It’s time for EXIM to stop gaslighting the public and cut financial ties with oil and gas.

Many more projects are under EXIM’s consideration, such as backing the Papua LNG project in Papua New Guinea and oil and gas development in Bahrain and Guyana. Such projects would push, meaning EXIM  to breach the $1 billion mark in fossil financing very soon. EXIM, a key Biden administration agency, is a globally significant financier of fossil fuels – from 2017 to 2021, EXIM financed $5.78 billion in fossil fuels, and only $120 million to clean energy. These include an oil refinery in Indonesia, $400 million for Trafigura to aid in U.S. liquefied natural gas exports, and $240 million for a gas project in Iraq. 

The OECD Guidelines require multinational enterprises to draw up emission reduction plans, avoid causing environmental damage and adhere to relevant national and international environmental policies. Government agencies and departments have previously been investigated under the guidelines in The Netherlands, South Korea, Denmark and others. 

Complaints at the OECD, if accepted, force a mediation process between parties and can result in institutions having to change policies.

The complaint comes as the Biden Administration is increasingly called upon to fulfill pledges to end its international financing for fossil fuels. President Biden promised during his 2020 campaign that he would end the United States’ international public finance for fossil fuels. In office, he issued Executive Order 14008 on Tackling the Climate Crisis at Home and Abroad and the Presidents’ International Climate Finance Plan. The administration also joined 38 other countries and institutions in signing an agreement at the 2011 UN COP26 climate conference in Glasgow to end international public finance for fossil fuels.

CONTACT: Shaye Skiff, Friends of the Earth United States, kskiff@foe.org

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Treasury’s Fossil Fuel Energy Guidance for Multilateral Development Banks was created in direct response to President Biden’s 2021 Executive Order on Tackling the Climate Crisis at Home and Abroad, which directed the agency to “promote ending international financing of carbon-intensive fossil fuel-based energy,” and promote financing that supports the goals of the Paris Agreement. 

As the largest shareholder at the World Bank Group and several other MDBs, the U.S. government has significant influence over energy investments. With the guidance from the Treasury, the U.S. could be a leader in moving these institutions and their shareholders away from fossil fuel investments and towards renewable energy and  diversified economies around the world. But as the report reveals, Treasury’s guidance does not effectively restrict fossil gas investments, demonstrating that the U.S. is not a serious leader in shifting public finance away from fossil fuels, as President Biden’s Executive Order aims to do.

Key takeaways:

• Any fossil gas project that the US votes to support at MDB Boards must meet 5 criteria outlined in Treasury’s Guidance, yet none of the projects identified in the report accomplish this. (The 5 criteria are: no upstream; only IDA countries; must have credit alternatives analysis; must provide significant development impact; must be Paris Aligned).
• The vague nature of Treasury’s Guidance creates a subjective and discretionary approach to implementation, making it difficult to hold decision makers accountable for how they apply the Guidance. 
• The report identifies 4 gas power plants directly funded through the World Bank Group in the last two years with US support (two in Mozambique, one in Bangladesh, and one in Uzbekistan), with the following troubling characteristics—
  • Publicly available project documents indicate that one project will rely on upstream fossil gas, which Treasury’s Guidance opposes
  • One project has public documents saying that the gas plant will switch to diesel after the first 14 years because the supplying gas fields will run out, which would violate the oil section of Treasury’s Guidance. However, Treasury told us that this is not their understanding, but this is based on confidential documents which we have no way to verify.
  • There are no credible public alternatives analyzes demonstrating that there is no technically or financially viable way to get the same development impact in a cleaner way. Indeed, we have been informed that the alternatives analyses that the US and other shareholders relied on when making its determinations are confidential, only WBG staff and shareholders are allowed to see them. 
  • The “significant development impact” of these projects is up for debate, when in many cases energy is being exported under questionable terms and local communities sacrificed.
  • Finally, none of the projects that received US support align with the goals of the Paris Agreement to limit the average global warming to well below 2°C above pre-industrial levels, and to aim for 1.5°C.
  • Fossil fuel projects present social and ecological harms to local communities, risks and delays to countries’ development, contribute to climate change, and should no longer be subsidized with public money. Developing countries are owed financing and technical support to equitably transition their energy sectors to renewables and to diversify their economies.

Luisa Abbott Galvao, Senior International Policy Campaigner for Friends of the Earth, said this:

The U.S. cannot be considered a climate leader unless we put our money where our mouth is. Despite strong climate pledges from our president, it is clear that U.S. agencies are using weak directives to excuse further public financing for fossil fuels. 

Treasury’s weak guidance continues to pour  U.S. funds into polluting fuel sources, harming lower-income nations while benefiting rich corporations. We can no longer delay developing countries’ energy and economic transitions but must pursue a just energy transition for all. 

Contact: Shaye Skiff, kskiff@foe.org

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WASHINGTON — Today, the board of directors at the U.S. Export-Import Bank (EXIM) is scheduled to approve support for a fossil fuel project in Iraq. This financing is one of many fossil fuel projects EXIM is considering supporting or has voted to finance in 2023, including:

• Approving almost $100 million for an oil refinery in Indonesia.
• Approving $400 million for Trafigura to aid in US liquefied natural gas (LNG) exports.
• Potentially backing Papua LNG in Papua New Guinea, oil and gas development in Bahrain, and oil and gas development in Guyana.

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The press conference was held in conjunction with the release of a written investor briefing, which was endorsed by sixteen NGOs and distributed to known JBS investors, financiers, and other major financial institutions.

The investor briefing highlights how JBS has been repeatedly implicated in climate change, deforestation, biodiversity loss, human rights abuses, and corruption scandals, whether as a parent company or through its network of subsidiaries and suppliers. 

Industrial livestock production is one of the largest sources of emissions fueling climate change. Leading experts have repeatedly pointed out that we must urgently address emissions from livestock by dramatically scaling back consumption and production of animal foods and shifting to ecological agriculture practices in order to avoid climate catastrophe. 

Financial institutions provide capital for industrial livestock and meat production companies, such as JBS, Tyson, and Cargill, to continue expanding their production. Bank of America and Citigroup are some of the latest financiers to underwrite JBS bonds, issued this month. BlackRock and Vanguard are some of the top investors in JBS.

“JBS has been exposed for environmental and climate destruction for years,” said Chelsea Matthews, senior campaigner for Friends Of The Earth. “U.S. commercial banks like Bank of America and Citigroup can’t credibly implement their climate commitments if they continue to provide financial support to meat giants like JBS.”

“We are here to say JBS is enabling land grabbing and attacks on Indigenous people but also the destruction of the planet,” said Ana Paula Vargas, Brazil program director at Amazon Watch. “So we need to tell Wall Street and Citigroup and Bank of America that this company is enabling and being complicit in the destruction. We have to stop financing JBS if you don’t want to be a part of the problem.”

“Too often we see US-based banks and corporations implicated in rainforest destruction,” said Ashley Thomson, senior policy advisor for Global Witness. “JBS poses a risk to the world’s tropical forests and to human rights. With no real government action to stem the flow of deforestation, we are appealing directly to investors to urge them to consider the full scope of risks by investing in JBS.”  

“Wall Street is enabling a company that relies on stolen land, forced labor, bribery and environmental destruction to turn a profit,” said Steph Dowlen, forests and finance campaigner for Rainforest Action Network. “To avoid locking in another decade of climate chaos, forest destruction and human rights abuses, Citigroup and Bank of America must put their money where their mouth is by steering clear of JBS.” 

“Investing in the health of our planet and all animals who share it is no longer niche or optional, it is an imperative,” said Annette Manusevich, farming campaign manager for World Animal Protection.  “JBS cannot be allowed to continue misleading the public and investors.” 

Photos and video from the event available HERE. 

Background information:

Earlier this year, JBS announced a plan to restart its decade-long attempt to list shares on the New York Stock Exchange (NYSE) via a dual listing under a new Dutch parent company (“JBS N.V.”). JBS’s last attempt to execute an initial public offering (IPO) in the US in 2017 was undermined by the company’s role in “the largest corruption inquiry in history,” which resulted in a record-breaking $3.2 billion fine to settle five separate investigations into JBS’s business practices. 

JBS company leadership has said it expects the dual listing to be complete by December 2023; however, the transaction must be approved by the SEC, Brazilian regulators, and shareholders. 

Last month, Rainforest Action Network petitioned the SEC to open an investigation into JBS and urged it to scrutinize the dual listing. Last year, an audit by Brazilian prosecutors found significant “irregularities” in JBS’s beef sourcing – indicating concerns that JBS is contributing to illegal deforestation in the Amazon rainforest. Earlier this summer, the U.S. Senate Finance Committee hosted a hearing investigating cattle supply chains and deforestation in the Amazon, with Senators zeroing in on JBS’s practice of “cattle laundering.” 

Communications contacts:
TJ Helmstetter, tjhelmstetter@foe.org
Brittany Miller, bmiller@foe.org

The post NGOs Warn Financiers of Risks Ahead of Meatpacker JBS’ NYSE Listing: “Wall Street: Steer Clear of JBS” appeared first on Friends of the Earth.

Approving the project would risk $13 billion in stranded assets without securing guaranteed sales, and further jeopardize global climate goals at a time when Pacific islands are vulnerable to climate change impacts. Instead, investing in renewable energy would achieve greater progress in pulling communities out of poverty in a country where more than 40% of the population live below the poverty line.

“The people of PNG are already facing the full force of climate change,” said Peter Bosip, Executive Director for the Centre for Environmental Law and Community Rights (CELCOR). “Rising sea levels, extreme weather events, and environmental degradation are already threatening many people’s existence and threatening our way of life. Papua LNG will add to and exacerbate this climate crisis – and financiers cannot, and should not, finance it.”

Approval of this project would directly contradict the United States’ commitment to “end new, direct public support for the international unabated fossil fuel energy sector within one year of signing this statement.” Approval of this project would also further position the United States as an international laggard on climate and put Pacific frontline communities at further environmental, social, and economic risk. 

“The U.S. Export-Import Bank seems determined to repeat its past mistake by continually approving support for liquefied natural gas projects in Papua New Guinea, which are harmful for local communities and the climate,” said Kate DeAngelis, Senior International Finance Program Manager for Friends of the Earth U.S. “Climate science has advanced greatly in the last 10 to 15 years, yet EXIM is failing to keep up. It should reject another handout to ExxonMobil and instead invest in renewables that will help the people of Papua New Guinea transition to a clean energy future.”

“EXIM’s potential support for this project signals that the agency and this administration is not serious about achieving international climate goals,” said Nina Pusic, Export Finance Climate Strategist at Oil Change International. “Approving this project risks wasting billions of taxpayer dollars on infrastructure that will become a stranded asset, and worse, further places our climate goals of minimizing global warming to 1.5°C far out of reach.”

As the International Energy Agency and the Intergovernmental Panel on Climate Change have made clear, any new oil and gas expansion is incompatible with preventing global temperatures from exceeding 1.5ºC. 

Press Contact: Shaye Skiff, Friends of the Earth United States, kskiff@foe.org

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Friends of the Earth U.S. and Wahana Lingkungan Hidup Indonesia (WALHI) highlighted the following concerns with the project:

• Fires have already occurred at the project and the risk for future fires remains high.
• Oil spills have occurred at the project, resulting in negative impacts on the marine environment and local population.
• The project sponsor has failed to engage with local communities or update the Environment and Social Impact Assessment.
• Support for the project would violate President Biden’s Glasgow commitment to end overseas fossil fuel finance by the end of 2022.

Kate DeAngelis, international finance program manager at Friends of the Earth United States, said this:

 This project is disastrous enough and yet continues to be a high risk of fires and spills that will harm local communities and the environment. While President Biden is putting forward policies to address climate change, he is financially backing climate disasters through the Export-Import Bank.

EXIM’s support of an oil refinery in Indonesia thumbs its nose at Biden’s pronounced need for responsible climate action, and his commitment in Glasgow to end overseas fossil fuel finance. The U.S. needs leaders who will make the right decisions for local communities and the planet.

Contact: Shaye Skiff, kskiff@foe.org, 202-222-0723

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At the COP26 United Nations climate conference, the United States joined 38 other countries and institutions in signing the ‘Glasgow Statement,’ a commitment to end public financing for international fossil fuel projects by the end of 2022. The report shows that a growing group of signatories including Canada, the United Kingdom, France, Finland, Sweden, Denmark, and New Zealand have made good on their commitment and are shifting billions of dollars out of fossil fuels. However, the United States has failed to live up to this promise.

During the 2020 presidential election, Joe Biden promised to end U.S. support for dirty energy projects abroad. Once in office, President Biden issued an Executive Order that called on U.S. government agencies to “promote ending international financing of carbon-intensive fossil fuel-based energy while simultaneously advancing sustainable development and a green recovery.” Then, at COP26, the Biden Administration further solidified these commitments by signing the Glasgow Statement.

Yet from 2019 to 2021, the United States supported an annual average of USD 2.6 billion in fossil fuel projects, compared to USD 358 million for renewables — more than seven times greater than its USD 358 million investment in renewables.

The Biden Administration has taken the unusual step of developing a policy in response to the Glasgow Statement at its bilateral financing agencies but not making it public, even at the request of members of Congress, making it impossible for the public to scrutinize the policy.

In December 2021, a leaked diplomatic cable revealed that the U.S. government has issued interim guidance to government agencies on restricting public finance for international fossil fuel projects, but the guidance appears to fall short of the Glasgow Statement commitment. In particular, it likely allows for continued support for some upstream and midstream gas, and contains a substantial loophole for projects that have national security benefits.

Despite the Glasgow commitment, the Export-Import Bank of the United States (U.S. EXIM) and the U.S. International Development Finance Corporation (DFC) are considering providing financing for fossil fuel projects that would represent a violation of the commitment. These include DFC support for LNG projects in Vietnam and South Africa, EXIM support for gas projects in Mexico and Iraq, an oil refinery expansion in Indonesia, and oil and gas development in Bahrain.

Although the end-of-2022 deadline to implement a Glasgow Statement policy has elapsed, campaigners are urging the Biden Administration to fulfill their promise by issuing public interagency guideline that bars new public fossil fuel support with no exemptions for gas projects and closes the potential widely-defined loophole for projects with “national security” implications that appeared in the leaked memo.

Kate DeAngelis, International finance program manager at Friends of the Earth U.S., said this:

The United States has long claimed to be a world leader in climate action, yet fails to back this up with meaningful action or policy. U.S. agencies like the U.S. Export-Import Bank and U.S. International Development Finance Corporation continue to be piggy banks for fossil fuel projects from Mexico to South Africa to Indonesia, as these nations suffer from climate change.

President Biden must make his administration’s policy public, which would catalyze other countries to stop providing billions of dollars to polluting projects all over the world. True leaders do not blink when faced with a global climate crisis.

NOTES

• The new report by Oil Change International, available here, reveals that the Glasgow Statement has already shifted an estimated USD 5.7 billion per year out of fossil fuels and into clean energy, with the potential of a further shift of USD 13.7 billion per year if all the Glasgow Statement signatories fulfill their commitments.
• Out of the 16 high-income signatories to the Statement, eight have adopted policies that broadly meet the promise they made in Glasgow (Canada, the European Investment Bank, the United Kingdom, France, Finland, Sweden, Denmark and New Zealand). Four of the 16 high-income countries (Belgium, Switzerland, The Netherlands, Spain) have new policies that further restrict fossil fuel support but leave major loopholes and/or do not meet the end of 2022 deadline. Four of the 16 high-income signatories (Germany, Italy, Portugal, United States) have yet to publish new or updated policies.
• Public finance for fossil fuels is a key driver of the climate crisis. Government-backed finance helps de-risk fossil fuel projects, making it more attractive for private sector financiers to invest. There is no solution to climate change without an end to public finance for fossil fuels.
• Thirty-nine countries and institutions signed the Glasgow Statement at the UN COP26 Climate Change Conference in Glasgow. Thirty-nine signatories (full list here) aim to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022” and instead “prioritize our support fully towards the clean energy transition.” According to the International Institute of Sustainable Development, If all signatories follow through on their pledges with integrity, this could shift USD 28 billion per year from fossil fuels to jumpstart the clean energy transition.
• In its latest report, the IPCC highlighted public finance for fossil fuels as ‘severely misaligned’ with reaching the Paris goals, but that if shifted, it could play a critical role in closing the mitigation finance gap, enabling emission reductions and a just transition. More background on the role international public finance plays in shaping energy systems is available in this Oil Change International briefing.

• A legal opinion by Professor Jorge E. Viñuales from the University of Cambridge and Barrister Kate Cook of Matrix Chambers argues that governments and public finance institutions that continue to finance fossil fuel infrastructure are potentially at risk of climate litigation.
• In May 2022, 122 civil society organizations sent letters to signatories to the Glasgow Statement calling on them to meet their commitment. Letters to Germany, Italy, Canada, France, the United States, and other non-G7 countries can be found here.

Contacts: 

Kate DeAngelis, Friends of the Earth U.S., kdeangelis@foe.org

Collin Rees, Oil Change International, collin@priceofoil.org

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Ending funding for fossil fuel projects abroad was a pledge Biden made in his first year of office and which he committed to in Glasgow at COP26, yet two years later the Biden administration has yet to take meaningful action and has failed to be a leader on the international stage. Additionally, Biden’s influence over leadership at global development and financial institutions seem to prioritize private sector interests rather than meaningful climate action. 

Meanwhile, export credit agencies continue to spend billions to bankroll oil and gas projects around the globe at the expense of renewable energy development, and to the detriment of local communities.

The new proposal, supported by over 175 organizations, shows how OECD Export Credit Arrangement can end its support for oil and gas and shift its focus and money toward renewable energy projects. The analysis reflects Biden’s climate pledges and the U.S.’s expected role as a climate leader at the OECD – without whom any significant climate progress is unlikely. 

According to the funding proposal, Biden’s leadership at the OECD could:

• End OECD Export Credit Agencies oil and gas financing. ECAs are currently the world’s largest public financiers of fossil fuels, from supporting an average of $33.5 billion per year of public money to coal, oil and fossil gas projects. 
• Shift ECA energy finance away from oil and gas, which currently constitutes over 90% of ECA energy finance, toward renewables. 
• Create a prohibition on oil and gas export finance, which would dramatically alter energy finance flows away from dangerous fossil fuels. 
• Allow the world to achieve its international climate goals of 1.5 degrees Celsius warming limit, which will otherwise be impossible, because ECAs shape the future of our energy systems through derisking large energy projects. 

“The world is waiting for the U.S. to fulfill its pledges as a leader on climate, particularly through the U.S. Export-Import Bank,” said Kate DeAngelis, International Finance Program Manager for Friends of the Earth U.S. “Biden cannot promote a renewable energy transition at home while bankrolling fossil fuels abroad. It’s time to take our global responsibility seriously and fund an equitable, renewable energy future.”

“Export credit agencies’ continued support for oil and gas projects completely undermines global climate goals under the Paris Agreements, keeping a 1.5 C global warming trajectory far out of reach,” said Nina Pušić, Export Finance Strategist at Oil Change International. “Powerful OECD negotiating countries like the U.S. must implement their international climate promises to end all international public finance for fossil fuels, and take this commitment to the OECD level, to ensure ECAs do not continue to stand as a major roadblock to the energy transition.” 

Contact: Shaye Skiff, kskiff@foe.org, 202-222-0723

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World Bank presidents are traditionally chosen by the U.S. as part of the country’s outsized power over the multilateral development bank. This disproportionate control by a Global North nation has fallen under criticism from environmental and civil society groups that are calling for WBG leadership that is more globally representative. When multiple crises like fossil fuel-driven climate change and unstable food systems require urgent attention, the bank’s status-quo operations are insufficient.

President Biden’s pick continues a long-standing pattern of choosing men who are tied to the private sector, rather than a leader in global development and social justice who can provide the guidance needed to transform the Bank. Banga, a current member of the Dow Chemical Company board of directors, and a former employee of multinational giants such as PepsiCo and Nestle, has a history of prioritizing corporate interests over climate and civil society.

Kate DeAngelis, International Finance Program Manager for Friends of the Earth, said this:

We don’t need another World Bank president who will further corporate interests like fossil fuels and industrial agriculture. The bank should be striving for just, equitable development as part of its vision and purpose to confront global challenges. Banga has no background in public service, mitigating climate change, promoting sustainable agriculture, reducing poverty or supporting a just energy transition. He represents U.S. corporations rather than the needs of 8 billion people around the world. 

We are also disappointed to see the World Bank continue a “boys’ club” tradition of male leadership rather than pursuing a female candidate with extensive background in human rights, environmental advocacy and sustainable energy development. Friends of the Earth calls for the U.S. to pursue a selection process that is more democratic and inclusive of Global South voices.

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