Banks earn just a tiny fraction of their bond underwriting fees from fossil fuel companies, making these deals not worth it given the associated environmental impact and reputational risk, according to a group of climate-focused nonprofits.
For 22 leading global banks, revenue from arranging bond sales for coal, oil and gas companies represents an estimated 0.01% to 0.06% of their total corporate debt underwriting fees, the Toxic Bonds campaign said, citing an analysis of data from firms including Bloomberg.
"Fossil fuel companies need banks, but banks don’t need fossil fuel companies,” said Alice Delemare Tangpuori, senior strategist at Bank on Our Future. "Coal, oil and gas bond underwriting is no cash cow for banks. Rather, it’s a sickly beast, putting banks’ reputation and the future of our planet on the line.”
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