The Green Climate Fund (GCF) must not channel its money through two international commercial banks that are allegedly funding the coal industry, civil society groups meeting at the GCF’s Board in Songdo, South Korea, have said.
In a statement released on Monday, the groups claimed that the GCF must reject applications for accreditation by big banks HSBC and Crédit Agricole, which are seeking to receive and manage GCF funds.
“The Green Climate Fund Board must reject HSBC and Crédit Agricole. Creating new business for big banks with large fossil fuel portfolios and poor records on human rights and financial scandal would undermine the very purpose of the Fund,” said Karen Orenstein of Friends of the Earth U.S.
“To accredit HSBC and Crédit Agricole is to short-change the vulnerable communities and the countries that the Fund is meant to directly benefit. There is no profit to be made in building the resilience of those adversely impacted by climate change. Public funds must be used to support local communities in developing countries, not to subsidise big banks,” said Sam Ogallah of the Pan African Climate Justice Alliance.
The GCF’s mandate to work directly with developing country institutions is what makes it innovative, the groups say. Targeted funding will help to build skills and expertise in poor countries, allowing governments to better meet the needs of the poorest and most vulnerable people in their countries.
“Accrediting HSBC and Crédit Agricole would be inconsistent with both the Paris Agreement, and with upholding high human rights standards. Any private sector partner of the GCF must have a credible strategy in place to make its entire portfolio and operations consistent with keeping global temperature rise to no more than 2 °C, let alone well below 1.5 °C,” said Annaka Peterson of Oxfam.
“The accreditation of these banking giants would jeopardise the reputation of the Green Climate Fund and expose it to unnecessarily high fiduciary risk. HSBC and Crédit Agricole provided US$7 billion and US$9.5 billion, respectively, to the coal industry between 2009 and 2014, and their coal financing does not show a clear downward trend. Moreover, HSBC is deeply embroiled in massive financial scandal,” said Yann Louvel of BankTrack.
A U.S. judge recently ordered the release of a report by an independent monitor overseeing the cleanup of HSBC’s massive money laundering – the report is said to be so damning that it would provide a “road map” for criminals seeking to launder money and finance terrorism.
About 172 NGOs released a statement calling for the rejection of HSBC and Crédit Agricole by the GCF. A copy of the statement can be found here. Appended to the statement are annexes on the fossil fuel financing trends of HSBC and Crédit Agricole, both of which fail to show a clear downward trend, while their renewables financing trails far behind their fossil fuel financing.