Felicity Bradstock
Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.
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By Felicity Bradstock – Jul 13, 2024, 4:00 PM CDT
- Major banks provided $6.8 trillion to fossil fuels since the 2015 Paris Agreement.
- Banks argue their financing supports energy transition, but critics say it’s not enough.
- Greater transparency is needed to understand how bank funds are actually used.
Despite increasing pressure to defund oil and gas firms in support of international decarbonisation efforts, many major banks are continuing to provide financing to fossil fuel companies. A recent report from the U.S. organisation Rainforest Action Network (RAN) and partners revealed that in the years following the 2015 Paris Agreement, the 60 largest private banks in the world provided $6.8 trillion in funding to fossil fuels. Over the past eight years, approximately $3.3 trillion went to fossil fuel expansion. These banks supported over 4,200 fossil fuel companies with loans and securities transactions or underwriting. In 2023, after many major banks had pledged to reduce or end funding to oil and gas companies as part of the Net Zero Banking Alliance, financing for fossil fuel companies reached $705 billion, with $347 going towards expansion.
The report shows that JPMorgan Chase was the biggest financer for fossil fuels, contributing $40.8 billion in funding to fossil fuel companies in 2023. This is followed by the Japanese bank Mizuho, which provided $37 billion in financing, with $18.8 billion contributing to fossil fuel expansion. Citibank was also a major contributor, providing $204 billion to fossil fuel companies since 2016. Meanwhile, Deutsche Bank gave nearly $13.4 billion, DZ Bank $2.5 billion, Barclays $24.2 billion and Santander $14.5 billion to the fossil fuel industry in 2023.
The Research and Policy Manager at RAN and the report’s co-author April Merleaux stated, “Wall Street’s biggest concern is profit, our main concern is climate and human rights. While the banks profiting from climate chaos create new greenwashing tales every year, our data shows how much money they are actually pouring into fossil fuels. Merleaux added, “Our report’s new methodology uncovers previously unknown details about bank financing of fossil fuels and gives activists new tools to confront the banks. Our data shows that bank financing of fossil fuels is not declining nearly fast enough. In 2023, nearly $350 billion has flowed to fossil fuel companies, incompatible with real climate commitments.”
Critics of the report said there was little evidence showing where the funding went in the fossil fuel sector, with several banks responding that their financing mainly went towards green transition efforts by energy companies. It was unclear whether some of the expansion funding went to supporting new green energy projects or fossil fuel activities.
U.S. banking institutions were found to be the biggest contributors to the fossil fuel sector,