How mega-polluters take advantage of billions in green loans
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Shell got one. So did the pipeline company Enbridge. And last summer, energy giant Drax got its biggest one to date, worth more than half a billion dollars. These weren’t just any loans to massive corporations. They were made by some of the world’s largest banks at discounted rates, in exchange for commitments by each of these mega-polluting companies to improve their environmental practices.
That may sound like a typical “green” loan. But these “sustainability-linked loans,” or SLLs, require little of the same accountability. Companies don’t have to spend the money toward their sustainability targets, and neither they nor the banks have to disclose interest rates, benchmarks for success or the penalties for falling short.
In the last several years, banks gave out more than $286 billion in these SLLs to hundreds of companies in environmentally damaging industries, including fossil fuels, mining and companies linked to significant deforestation, an investigation by The Examination, Toronto Star and Mississippi Today has found. That’s nearly 1 in 5 dollars out of all SLLs, the team’s analysis of data from the London Stock Exchange Group from 2018 to 2023 showed.
This investigation was reported in partnership with The Examination, Mississippi Today and Toronto Star. Reporting was supported by the Pulitzer Center’s Rainforest Investigations Network. As climate change becomes more severe, with carbon emissions and global temperatures surging to record highs last year, pressure is on the biggest polluters to clean up their processes. But instead, these loans are often used to help companies and banks improve their reputation without actually reducing environmental harms.
