The Lead

Garrity joins GOP state treasurers warning banks that dump fossil fuels

By: - May 27, 2021 10:11 am

Keystone Generating Station, a coal-fired power plant in Armstrong County, about 50 miles northeast of Pittsburgh. (Capital-Star photo)

Pennsylvania state Treasurer Stacy Garrity has threatened to pull billions of dollars in public funds out of national banks that refuse to lend to fossil fuel-based industries.

The policy was announced in a Monday letter sent to White House climate envoy John Kerry by Garrity and 14 other state treasurers. 

“We intend to put banks and financial institutions on notice of our position, as we urge them not to give in to pressure from the Biden administration to refuse to lend to or invest in coal, oil and natural gas companies,” the officials wrote.

Many represent other fossil fuel producing states, such as West Virginia, Kentucky, and Oklahoma, among others.

The letter comes in response to Kerry, a former Massachusetts senator and U.S. Secretary of State, privately asking bank executives to commit to slowing down their investments in carbon intensive industries as a way to fight climate change.

Some of the country’s biggest banks, such as Bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley, and Wells Fargo, have made public commitments to follow the 2016 Paris Accords, which aim to limit global carbon emissions to fight climate change. 

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But these banks have invested hundreds of billions of dollars into fossil fuel projects across the globe, according to a report by the Rainforest Action Network, an environmental group.

Kerry has advocated for these commitments to be honored quicker with a “net-zero banking alliance,” and for the banks to make more specific pledges, according to Politico

President Joe Biden also issued an executive order last week mandating that privately traded companies disclose their future financial exposure to climate change.

As state treasurer, Garrity right now directly controls $35.7 billion in state funds, according to spokesperson Samantha Galvez. That total includes $7.3 billion in unspent federal stimulus funding.

These dollars under Garrity’s direct control range from state-run college savings accounts to short-term investments of the state’s operating dollars.

Of this total, $3.6 billion is invested in one of the six big banks Kerry is reportedly talking to.

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Stephen Caruso
Stephen Caruso

Stephen Caruso is a former senior reporter with Pennsylvania Capital-Star. Before working with the Capital-Star he covered Pennsylvania state government for The PLS Reporter.