Major banks and institutional investors back the U.S. petrochemical expansion, according to a recent report. Petrochemical companies convert coal, oil, and gas into plastics, fertilizers, and other products.
The U.S. is at the epicenter, primarily along the Gulf Coast. There are 100 projects nationwide to build new petrochemical facilities and expand or upgrade existing ones, mostly in the Gulf South.
As these projects move forward, the environmental impact remains a major concern. The petrochemical life cycle is extremely carbon-intensive, accounting for up to 10 percent of global greenhouse gas emissions. Petrochemical production and use in the U.S. generate over 300 million metric tons of carbon-equivalent emissions annually. That is more than Spain’s annual emissions and around 5 percent of the total greenhouse gas emissions in the U.S.
“Petrochemical expansion isn’t inevitable — it’s financed. Follow the money, and it leads to a small group of repeat actors. A concentrated group of banks and asset managers is making decisions that lock in pollution and long-term instability, despite the mounting legal and market risks.” Brandon Marks, Senior Campaigner, Center for International Environmental Law
Who Bankrolls the U.S. Petrochemical Expansion
Institutional investors and banks financed more than $1.6 trillion in U.S. companies that led the petrochemical expansion. Five investors control 31 percent of that investment: Vanguard, BlackRock, State Street, Capital Group, and Berkshire Hathaway.
Vanguard holds $182 billion in stocks and bonds, more than any other investor, and is leading the U.S. petrochemical expansion. Its investments are tied to 34 major expansion projects, with a combined projected cost of $94 billion. Those investments are expected to produce annual emissions of 98.1 million metric tons of carbon equivalent, which is more than the national emissions of Colombia or Belgium. Vanguard is also the “single largest investor in fossil fuels worldwide,” with $444 billion invested.
Greenwashing
Vanguard claims that it is “committed to operating in a responsible manner, including seeking to reduce the carbon footprint of our buildings and operations, and managing climate-related risks in our business.” The company crows about its use of 100 percent renewable energy in owned and leased buildings, while touting “green building criteria.”
Banks invested $133 billion into the U.S. petrochemical industry from 2019 to 2025. Only four banks account for almost one-third (32 percent) of the financing: Citi, Bank of America, JPMorgan Chase, and Mizuho.
According to the report, Citi’s investments are “underwriting the next wave of petrochemical pollution.” In five years, Citi “funneled” $83 billion, more money than any other bank, to the companies driving the U.S. petrochemical expansion. The bank financed 33 companies for 32 major expansion projects, totaling $85 billion in costs and expected annual emissions of 79.5 million metric tons of carbon dioxide equivalent. That is more than the national emissions of Chile or the Czech Republic.
Citi proclaims on its website that it is “building a sustainable future.” It purports to do so by talking to its clients about decarbonizing their businesses. The company is committed to reaching net-zero greenhouse gas emissions by 2050.
