Exiting Petrochemicals:

A Guide for Financial Institutions

Developed in consultation with climate policy advocates, financial analysts and communities on the frontlines of petrochemical production, this guide explains how financial institutions can consider the impact of petrochemicals as part of their environmental and social risk frameworks, and develop their approach for a responsible exit from the petrochemical supply chain.

Intro

As global temperatures rise and governments implement decarbonization policies, the fossil fuel industry is pushing a major expansion in petrochemical and plastic production.

Unchecked expansion of petrochemicals would devastate the environment, climate and human health. The financial sector could play a crucial role in limiting this damage, and it has yet to take action.

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EXECUTIVE SUMMARY

Increasingly aware of the health risks associated with petrochemicals, consumers are pushing for plastic restriction measures and safer, smarter alternatives. Facing overproduction, a stricter regulatory regime, and emerging litigation, the market for plastic and petrochemicals has become increasingly volatile.

We call on financial institutions to

Petrochem 1

Stop Financing Petrochemicals

Immediately prohibit all financing for petrochemicals expansion and adopt absolute greenhouse gas emissions reduction targets (including scope 1, 2 and 3 emissions) leading to the phase out of financing to the petrochemicals sector.

Petrochem 2

Require Clients to Adopt Transition Plans

Require that all petrochemical clients develop and publicly disclose transition plans consistent with limiting global warming to 1.5°C above pre-industrial levels and reversing biodiversity loss, including a timeline for absolute greenhouse gas emissions reductions without reliance on offsets, carbon capture, or carbon removal.

Petrochem 3

Stop Financing Environmental Racism and Injustice

Adopt environmental justice policies to end financing for petrochemical projects in communities of color and low-income communities that are already overburdened with pollution, including regional exclusions for the Gulf South and Ohio River Valley.

Petrochem 4

Respect Human Rights and Indigenous Sovereignty

End financing for any petrochemical company that repeatedly violates environmental regulations, human rights, or Indigenous Peoples’ sovereignty, and their right to Free, Prior, and Informed Consent, and provide remedy for past harms.

Petrochem 5

Responsibly Exit the Entire Petrochemical Supply Chain

Stop financing fracking, rapidly phase out all fossil fuel financing, and adopt policies to address the specific harms of plastics, fertilizers, and pesticides, including by remedying past harms and responsibly exiting investments.

Exiting Petrochemicals:

A Guide for Financial Institution

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EXECUTIVE SUMMARY
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