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Large U.S. financial firms are putting their deep pockets and political clout behind alternative energy, in a key stamp of approval from companies that have traditionally funneled money into fossil fuels.
In a statement Monday, six companies, including the four largest U.S. banks, pledged to cooperate to accelerate investment in renewable energy. They called for governments to help push clean power sources and combat "significant" economic risks from climate change ahead of critical private and public sector talks at the Sustainable Innovation Forum in December.
"Policy frameworks that recognize the costs of carbon are among many important instruments needed to provide greater market certainty, accelerate investment, drive innovation in low carbon energy and create jobs," said the statement signed by JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley.
The effort from the financial industry comes as more research has linked carbon-producing fossil fuels to global warming and possible health and economic drawbacks. Some recent policy like President Barack Obama's Clean Power Plan, which aims to reduce carbon emissions from power plants, has received backlash from pockets of the energy industry.
"We do recognize that carbon does have a cost and it's important the government steps up and takes the lead" on further policy, said Marisa Buchanan, vice president of sustainable finance at JPMorgan Chase, at a Monday panel held by sustainability advocacy group Ceres.
Stronger commitment from firms that boast trillions of dollars in total assets boosts clean power initiatives, which will require huge capital in the coming decades to grow and become more affordable for consumers.
Still, the statement lacks specific policy recommendations, which brings into question how it will translate into real action.
"We are hopeful that this kind of effort helps to move that transition forward" and encourage businesses to change their energy consumption, said Valerie Smith, director and head of corporate sustainability at Citigroup.
Many large banks have injected more resources into renewable energy sources like solar and wind in recent years. Citi recently set a goal of allocating $100 billion to environmental finance in the next 10 years, while Wells Fargo has invested $52 billion in environmental efforts since 2005. Others like Bank of America have previously urged private sector and government action to mitigate climate risks.
But amid calls for change, parts of the financial industry still have a big stake in fossil fuels. The largest U.S. banks are among the top financiers of the coal industry, one of the biggest targets for environmental and climate regulations.
Smith and Buchanan, as well as representatives from Wells Fargo and Bank of America, stressed Monday that they maintain a role in financing the world's existing economy, which relies heavily on fossil fuels. However, they acknowledged that the firms hold a unique position in shaping how the energy industry will look in the future.
"Part of us feels like we're enablers of what gets done in the world," Smith said.
She stressed that not only pushing capital into sustainable energy but also a broader movement to pull money from the fossil fuel industry has "raised the profile" of climate issues, she added. Still, the statement did not offer any language on the banks further reducing their exposure to fossil fuel companies.