Banks may promise to be better stewards of the planet through emissions reduction and other actions, but their money will keep the oil up for now.
About 60 of the world’s largest commercial and investment banks put a total of $ 3.8 trillion into fossil fuels from 2016 to 2020, the five years after the signing of the voluntary Paris Agreement. The goal of the multinational pact is to limit global warming to well below 2 degrees Celsius, and preferably 1.5 degrees, compared to pre-industrial levels. In addition to financing oil patches, global coal projects are also financed.
That’s according to a report called Banking on Climate Chaos 2021 published Wednesday by a handful of climate organizations, including the Rainforest Action Network. The group’s overview of the financial sector has been published every year for more than a decade.
The three banks that financed the most fossil fuels in 2020 were JPMorgan Chase JPM report,
at $ 51.3 billion; Citi C,
at $ 48.4 billion; and Bank of America BAC,
with $ 42.1 billion. According to the report, JPMorgan’s fossil fuel funding has reached $ 317 billion since the Paris Declaration to lead all banks. Wells Fargo & Co.’s WFC funding fossil fuels are down 42% by 2020 to $ 26.4 billion.
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French bank BNP Paribas BNP,
lending to oil, gas and similar holdings was found to have increased by 41% in 2020 compared to the previous year. Its clients include BP BP,
Total DEAD,
and Royal Dutch Shell RDS.A,
committed to reducing their dependence on fossil fuels and investing more in businesses related to renewable energy.
Year-on-year, total fossil fuel funding among banks, the report says, is down 9% in 2020, though largely due to the shutdown of COVID-19.
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“This report serves as a reality check for banks that believe vague ‘net zero’ targets are enough to stop the climate crisis,” said Lorne Stockman, senior research analyst at Oil Change International. “Our future is going where the money flows, and by 2020 these banks will have plowed billions to lock us in further climate chaos.”
Bank of America joined select other major banks earlier this year, including JPMorgan Chase and Morgan Stanley MS,
that have pledged to achieve net zero greenhouse gas emissions through its funding by 2050. Bank of America, as part of a group working to align carbon accounting reporting, then said it is committed to reducing its funded emissions by to be announced in 2023.
Val Smith, Citi’s Chief Sustainability Officer, said in a blog post this week that the lender will work with existing fossil fuel bank customers to move first to public reporting of greenhouse gas emissions and eventually phase out funding that is offered to companies that do not meet the standards for CO2 reduction.
Banks will continue to advise other companies on the transition from dependence on fossil fuels. The economic impact of climate change could reach $ 69 trillion this century, and investment in the energy transition should grow to $ 4 trillion a year, Haim Israel, Bank of America’s chief of global thematic investment research, said in a report earlier this year.
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