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With the official start to hurricane season right around the corner, people living in the path of hurricanes are experiencing rain, wind and stormy weather. These communities are no strangers to the full extent of damage caused by destructive weather. Many have lost everything to storms and are still building their lives back after throwing away all of their belongings, boarding up broken windows, buying generators and living out of hotel rooms.
Meanwhile, the fossil fuel industry is making more money than ever before. Six of the world’s biggest fossil fuel companies that are driving the climate crisis – Chevron, Shell, BP, ConocoPhillips, Exxon and TotalEnergies – are on track to make almost $3,000 in profits every single second this year, according to a new report, as households across the world grapple with soaring energy prices and inflation, which are driving a cost-of-living crisis.
The climate crisis increases global temperatures. Rising temperatures mean hurricanes that form have the potential to bring stronger winds and heavier rain, which, in turn, means more damage. But it’s not just the fossil fuel industry that is making storms worse. Oil and gas companies cannot build their destructive projects without the same corporations that hold significant power over our financial security and daily lives: insurers, banks and investors.
Insurers
Just like how we can’t drive a car or buy a house without insurance, oil and gas corporations can’t build or operate new projects without insurance. Insurance giants like Chubb, Liberty Mutual and AIG provide insurance to fossil fuel companies so more destructive projects can be built. Insurers also take the money we pay for car, health and life insurance and invest it in fossil fuel companies. It’s estimated that insurance companies have more than $534 billion invested in coal, oil, and gas companies.
Insurers know the climate crisis is happening now and that they’re on the hook to pay for the damage it’s causing. But instead of ditching fossil fuels, they’re withdrawing coverage for communities in disaster-prone areas. In Louisiana, insurance is becoming harder to find and difficult to afford. Massive claims from Hurricane Katrina and Hurricane Rita drove large national insurance companies to scale back their coverage and remaining companies to jack up rates. Homeowners in New Orleans saw their premiums double, with some required to pay an extra $3,000 per year. After Louisiana was hit by Hurricanes Laura, Delta, Ida, and Zeta, a dozen insurers became insolvent and many others left the state. We pay more and get less protection. They do business “as usual.”
Banks
Similar to a car loan or mortgage, banks lend fossil fuel companies money that must be repaid over time with interest. Banks also give companies revolving loans or lines of credit that companies can draw from as needed, kind of like a credit card. They also help companies raise money by facilitating the sale of stocks and bonds to investors, a process called underwriting.
In 2024, the warmest year on record, JP Morgan Chase was the world’s top fossil fuel financier for the year, with $53.5 billion in fossil fuel financing. Bank of America rose two ranks to become the second biggest financier of fossil fuels globally. Over two-thirds of banks covered in the Banking on Climate Chaos report (45 banks) increased their fossil fuel financing from 2023 to 2024, with Citigroup, JPMorgan Chase, Bank of America, and Barclays each financing over $12 billion more than last year.
Investors
Investors provide the funding for fossil fuel projects by purchasing the stocks and bonds that companies issue. Institutional investors hold more than $1.6 trillion in shares and bonds across companies planning major petrochemical expansions in the U.S. Vanguard is the largest investor in fossil fuels worldwide, with $444 billion invested across the sector. The new Toxic Finance report found just five investors control nearly one-third (31%) of companies leading the U.S. petrochemical expansion: Vanguard, BlackRock, State Street, Capital Group, and Berkshire Hathaway.
Storms didn’t used to be this bad. It didn’t get this hot so soon. Wildfires weren’t this frequent. In fact, a new report from the UN states that the next five years are projected to be the hottest on record. Fossil fuel companies and the institutions that finance them know this, yet they won’t stop injecting their client’s money into projects that continue sacrificing communities for short-term profits. All financial institutions have a responsibility to adopt transition plans that drastically cut fossil fuel financing, including an immediate end to expansion financing. Their money would be much better spent on clean, renewable energies so we can prevent disasters before they happen.