Climate activists from the campaigning group Fridays For Future protested in front of the European Parliament in Brussels on Monday to demand an end to the financing of new fossil fuel projects. The group is calling on members of the parliament’s Committee on Economic and Monetary Affairs to amend the EU’s capital requirements directive in favour of a one-for-one risk weighting on all bank lending to new fossil fuel projects.
Fridays For Future, also known as School Strike for Climate, is a global network inspired by Greta Thunberg’s school strikes outside the Swedish parliament. Led and organised by young people, it campaigns for policymakers to “listen to the science” and act with the urgency that the unfolding climate crisis demands.
The group is seeking the introduction of a 1,250% risk weight for capital requirements associated with financing new fossil fuel projects. Known as the one-for-one rule, this would require banks, insurers and other financial institutions to fund new fossil fuel projects from their own equity, protecting depositors, lenders and taxpayers from risk. The rule is similar to one proposed by the Bank for International Settlements to reflect the high risks associated with bank holdings of crypto assets.
The committee will vote on the new EU capital requirements directive in January.
“We are demanding the implementation of the so-called one-for-one rule: for every euro that banks and insurers want to invest into fossil fuel projects, they must have one euro of their own actual capital,” the activists said. “The current EU financial regulation is failing to address the climate crisis. Banks and investors are pouring billions of euros into new fossil projects, ignoring their high risks for people and the planet.”
Research shows that most known fossil fuel reserves must remain in the ground to allow for even a 50% probability of limiting global heating to 1.5°C. Leaving reserves unburned would mean a huge write-down in the value of fossil fuel companies, with associated risks for lenders.
This page was last updated December 7, 2022
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