Monday, January 10, 2022

BANKS EARNING HEFTY GREEN FEES

It’s official. For the first time since the unveiling of the Paris climate agreement in 2015, banks earned more fees arranging green-related bond sales and loans than they did helping fossil-fuel companies raise money in the debt markets.

To be sure, the final tally for 2021 was incredibly close. Overall, banks pocketed an estimated US$3.4 billion from green-labeled debt deals, compared with US$3.3 billion from their work with oil, gas and coal companies, according to data compiled by Bloomberg. For context, in 2020, the split was US$1.9 billion for green and US$3.7 billion for fossil fuels.

The question now (at least for the less cynical among us) is are banks genuinely interested in helping companies and governments make the transition to clean technologies and energy efficiency? Or are they simply taking advantage of a market where they can currently earn hefty fees — a market where, coincidentally, transparency has yet to arrive and greenwashing runs rampant?

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