Banks slammed over their role in Saudi Aramco IPO, by environmental groups

Friends of the Earth, Oil Change International and six other groups told the chief executives of major banks that their endorsement of the "biggest polluting oil company in the world" would severely undermine efforts to reduce carbon emissions and be detrimental to the 2015 Paris Agreement on climate change. 

The groups stated that the banks would be involved in the "biggest single infusion of capital into the fossil fuel industry" since the accord was signed. 

Those involved in Aramco's gigantic public offering are Bank of America, Citigroup, Credit Suisse, Goldman Sachs, HSBC, JP Morgan and Morgan Stanley, which all denied to comment. 

The letter dated 17 October read "it can be presumed that the tens of billions of dollars pumped into Aramco... will be used not only to keep expanding oil production in the kingdom, but also to push the company's strategy of doubling its oil refining capacity".

The environmentalists also argued that this endorsement would annul any legitimacy regarding the banks' social and environmental concerns as they would be "devoid of all sincerity".

They also underlined Saudi Arabia's "horrendous" human rights record, citing the brutal murder of Jamal Khashoggi and the Saudi-led devastationsof the war Yemen.

The other signatories meanwhile comprised 350.org, Earthworks, Global Witness, Indigenous Environmental Network, Rainforest Action Network, ShareAction and Sierra Club.

Read more: How Saudi Aramco is powering the global climate crisis

Saudi Aramco's initial public offering (IPO) could be the biggest stock sale in the world even if the oil company is planning on floating only 5 percent of its assets. 

This move on the part of the Saudi Arabian Kingdom is part of Mohammed bin Salman’s efforts to diversify the country’s economy. 

Valuations for the company's value has been debated amongst experts, as many believe Riyadh is over-valuing its worth. There have been delays in Aramco’s public bid, as the initial launch was planned for 2018. 

Crown Prince Mohammed bin Salman is channelling efforts to stop relying on the vast but limited Saudi oil reserves in a world which is increasingly investing in renewable resources.