with Paulina Firozi

THE LIGHTBULB

Bank of America, Citigroup, Goldman Sachs and other big banks are getting an earful from environmental groups over what's set to be the biggest initial public offering in history.

The reason? The firm planning to go public is the largest oil company in the world.

In a letter sent Thursday, green groups from the United States, United Kingdom and the Netherlands are pressing the chief executives of seven of the largest banks in the world not to underwrite the IPO of Saudi Aramco, Saudi Arabia's state-own petroleum giant.

The pressure comes as many financial institutions, still trying to regain public trust after the financial crisis a decade ago, have begun to think and talk about how best to move resources away from fossil fuel projects and into renewable energy or other climate investments.

While the talk of addressing climate change from the top ranks of the U.S. banking industry has been well received among many environmentalists, now some of those same green groups are asking Wall Street to put their money where its mouth is, as it were.

“All these banks are talking a lot more about sustainability,” said Patrick McCully, director of the climate and energy program at Rainforest Action Network, which organized the letter. The forthcoming Saudi Aramco IPO, he added, “really stands out as the biggest infusion of capital into the fossil-fuel industry since the Paris climate agreement” in 2015.

The Saudi royal family, which claims its state-run firm is worth $2 trillion, has for months toyed with the idea of an IPO to diversify away from oil production. But Friends of the Earth, Sierra Club, 350.org and other groups that signed onto the letter suggest that pumping more money into Saudi Aramco will only allow it to double down on other fossil-fuel sections, such as by expanding its oil refining capacity and investing in natural gas and petrochemicals.

“All of you have at various times expressed your concern about climate change and your support for the Paris Agreement,” the letter reads. “If you go ahead as lead coordinators in raising tens of billions of dollars for the world’s biggest climate polluter — funds that will be at the disposal of a government that continues to commit appalling human rights violations — it will be clear that your words of environmental and social concern are devoid of all sincerity.”

This is not the first time environmentalists have seen lenders as a potential pressure point in stopping fossil-fuel projects. The Rainforest Action Network and other groups have mounted similar campaigns against banks invovled in the Keystone XL and Dakota Access pipelines.

But Saudi Aramco's potential public offering is far bigger than any of those North American pipeline projects — and involves dire human-rights abuses too, the green groups say. Among the issues cited was the 2018 assassination of Post contributing columunist Jamal Khashoggi in Istanbul, which the CIA has concluded was ordered by Saudi Crown Prince Mohammed bin Salman.

The public offering approaches as many of the big banks have committed to draining their portfolios of fossil-fuel investments, recognizing a role in reducing climate change. Bank of America and Citi have said they will reduce their exposure to coal mining. HSBC has said it will stop most new investments in oil sands and Arctic drilling. 

At a public session at the New York public library during a week of climate activities in September, Daniel Klier, global head of sustainable finance at HSBC, said that one of the "most urgent" tasks was to address "the mismatch of where money sits and where money needs to go."

A number of banks, including Citi, just last month signed onto a series of U.N.-backed “responsible banking” principles that include bringing environmental factors into lending decisions.

The other banking firms targeted in the letter are Credit Suisse, JPMorgan Chase and Morgan Stanley. Though nothing is official yet, last month Reuters reported that Saudi Aramco will give those seven banks, along with two Saudi-based investors, top roles in the IPO.

International leaders, too, have sought to incentivize investments in renewable energy projects in developing countries, many of which are highly dependent on coal, by providing subsidies aimed at reducing the risk of making those sorts of loans. 

“The idea was to force a paradigm shift,” said Yannick Glemarec, executive director of the Green Climate Fund, which is an outgrowth of the 2009 U.N. climate agreement in Copenhagen. He said his fund was established by international leaders before the 2015 U.N. climate summit “in recognition that the window of opportunity to avoid catastrophic climate change was shutting very fast.”

Credit Suisse and JPMorgan Chase declined to comment. The remaining five banks did not reply to requests for comment.

Steven Mufson contributed to this report.

POWER PLAYS

— The unbearable heat in Qatar: In the latest installment of The Post’s “2C project,” Steven Mufson details how Qatar, one of the hottest places on Earth, is grappling with its devastating heat.

  • The World Cup it's hosting in 2022 is emblematic of many problems: The date has already been moved November, to opt for the milder winter and avoid the possibility of hundreds of thousands of soccer fans struggling or dying in the summer heat. Qatar already air-conditions its outdoors, and now outdoor air conditioners have been built in the open-air soccer stadiums to prepare for the tournament. Unlike in many of the world’s poorest places dealing with the effects of climate change, the very wealthy Qatar can afford such perks, though it’s not a long-term solution.
  • AC is “part of a vicious cycle”: “Carbon emissions create global warming, which creates the desire for air conditioning, which creates the need for burning fuels that emit more carbon dioxide,” he writes. “In Qatar, total cooling capacity is expected to nearly double from 2016 to 2030, according to the International District Cooling & Heating Conference. And it’s going to get hotter.”
  • The big picture: “Already one of the hottest places on Earth, Qatar has seen average temperatures rise more than 2 degrees Celsius above preindustrial times, the current international goal for limiting the damage of global warming ... Over the past three decades, temperature increases in Qatar have been accelerating. That’s because of the uneven nature of climate change as well as the surge in construction that drives local climate conditions around Doha, the capital. The temperatures are also rising because Qatar, slightly smaller than Connecticut, juts out from Saudi Arabia into the rapidly warming waters of the Persian Gulf.”

— Perry won’t say whether he’ll comply with subpoena: Energy Secretary Rick Perry declined in an interview on Fox Business Network to say whether he will listen to Congress. “Hey, listen,” Perry said. “The House has sent a subpoena over for the records that we have. And our general counsel and the White House counsel are going through the process right now. And I’m going to follow the lead of the, of my counsel on that.” The deadline is Friday to turn over the trove of documents lawmakers have requested related to the administration’s engagements with Ukraine.

  • Perry’s dilemma: Providing documents could make him vulnerable to Trump’s ire after keeping a relatively low profile during his tenure atop the Energy Department. But defying a congressional subpoena could have worse consequences. The Energy 202 spelled out the conundrum here.
  • Trump's request: Perry also told the Wall Street Journal that at Trump’s request, he spoke with the president’s personal attorney Rudy Giuliani to address concerns about Ukrainian corruption and to “ease a path to a meeting between” Trump and Ukrainian president. “Mr. Perry’s phone call to Mr. Giuliani came after a May meeting at the White House following the inauguration of the Ukrainian president,” the Journal reports. “U.S. officials at that meeting, including Mr. Perry and Kurt Volker, the U.S. envoy for Ukraine negotiations, urged Mr. Trump to meet his new counterpart.”
  • But: “Mr. Perry also said he never heard the president, any of his appointees, Mr. Giuliani or the Ukrainian regime discuss the possibility of specifically investigating" former vice president Joe Biden and his son Hunter Biden. It’s Trump’s request for an investigation into the Bidens during a July call with [Ukranian President Volodymyr] Zelensky that sparked the impeachment inquiry.

— Federal judge blocks the Trump administration’s sage grouse plan: Judge B. Lynn Winmill of the United States District Court for the District of Idaho granted a preliminary injunction to halt the Bureau of Land Management’s efforts in unwind protections for the bird, the New York Times reports.

  • From the ruling: “Under these weakened protections, the B.L.M. will be approving oil and gas leases, drilling permits; rights of way for roads; pipelines and power lines; coal and phosphate mining approvals and livestock grazing permit renewals,” wrote Judge B. Lynn Winmill of the United States District Court for the District of Idaho. “It is likely that these actions will cause further declines of the sage grouse under the weakened protections.”
  • The judge also suggested the environmental groups challenging the administration are likely to succeed: They are arguing the BLM "did not thoroughly examine the environmental consequences of its actions," per NYT.

— Ex-oil lawyer set to go directly to federal bench: The White House announced Trump plans to nominate Joshua M. Kindred, who served as environmental counsel to the Alaska Oil and Gas Association prior to joining the Interior Department, to serve as a judge on the United States District Court for the District of Alaska. Kindred is currently the regional solicitor for Interior’s Alaska Region.

— Man, it’s a hot one: This year is on pace to be one of the planet’s warmest ever, The Post’s Andrew Freedman reports. The National Oceanic and Atmospheric Administration reports that last month was the hottest September on record that the planet has seen. With that, 2019 has so far been the second-warmest since record-keeping began in the late 19th century.

— More preemptive blackouts possible in Southern California: Southern California Edison is considering cutting power off to about 32,500 customers in six counties, including Los Angeles, Riverside and San Bernardino counties, in an attempt to prevent wildfires from sparking. These areas could experience outages as soon as Thursday depending on wind activity, the Los Angeles Times reports. “News of another round of power shut-offs comes as SCE faces growing scrutiny over possible links between the company’s electrical system and the start of the Saddleridge fire in Sylmar,” per the report.

— Ex-landfill now a large-scale solar farm in Maryland: A new pilot solar project has launched in Prince George’s County, the first large-community solar farm in the state, WAMU reports. Having a community-based solar program allows residents who can’t afford or otherwise don’t have solar panels on their individual homes to buy into the project to access solar energy — a move that’s both environmentally friendly and can help residents save on utility costs. Solar company Neighborhood Sun has signed up 1,200 households in Prince George's and Montgomery counties, per the report.

DAYBOOK

Today

  • The House Select Committee on the Climate Crisis holds a hearing on cleaner, stronger buildings.

Coming Up

  • The House Transportation and Infrastructure Subcommittee on Economic Development, Public Buildings, and Emergency Management holds a hearing on federal recovery efforts after recent disasters on Oct. 22. 
  • The House Transportation and Infrastructure Subcommittee on Water Resources and Environment holds a hearing on the Pebble Mine Project on Oct. 23.

EXTRA MILEAGE

— More criticism of a climate question-free debate: Now from former secretary of state John Kerry.