Close button
The Guardian
Email YouTube Facebook Instagram Twitter WhatsApp
x

World’s 60 largest banks spent $3.8 trillion on fossil fuels since Paris agreement

Related

Antonio Gutteres

The 12th edition of the most comprehensive report on fossil fuel bank financing documents present an alarming disconnect between the global scientific consensus on climate change and the continued practices of the world’s largest banks.

This year’s report, titled ‘Banking on Climate Chaos 2021,’ expands its focus from 35 to 60 of the world’s largest banks and reveals that in the five years since the Paris agreement was adopted, these banks have pumped over $3.8 trillion into the fossil fuel industry.

The report was authored by Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club, and is endorsed by over 300 organisations from 50 countries around the world. Banking on Climate Chaos names the largest funders of fossil fuels around the world, with JPMorgan Chase the worst overall, RBC the worst in Canada, Barclays the worst in the UK, BNP Paribas worst in the EU, MUFG worst in Japan and Bank of China worst in China.

It also concludes that fossil fuel financing was higher in 2020 than in 2016, a trend that stands in direct opposition to the Agreement’s stated goal of rapidly reducing carbon emissions with the aim to limit global temperature rise to 1.5°C.

The report demonstrates that, even amidst a pandemic-induced economic recession, which resulted in an across-the-board reduction of fossil fuel financing of roughly in per cent, the world’s 60 largest banks still increased their financing in 2020 to the 100 companies most responsible for fossil fuel expansion by over ten per cent.

These banks have poured nearly $1.5 trillion over the past five years into 100 top companies expanding fossil fuels. This includes companies behind highly controversial projects like the Line three tar sands oil pipeline and the expansion of fracking on the lands of Indigenous Mapuche communities in Argentina’s Patagonia region, which are just two of the nearly 20 case studies featured in the report.

US-based banks continue to be the largest global drivers of emissions in 2020, with JPMorgan Chase remaining the world’s worst fossil bank.

The report said, Chase recently committed to align its financing with the Paris Agreement and yet continues essentially unrestrained financing of fossil fuels. From 2016 through 2020, Chase’s lending and underwriting activities have provided nearly $317 billion to fossil fuels, fully 33per cent more than Citi, the next worst fossil bank over this period.

The worst 10 coal power bankers since the Paris Agreement’s adoption were all Chinese, led by Bank of China; the world’s biggest bank, ICBC (Industrial and Commercial Bank of China); and China CITIC Bank. Overall funding from the banks in the report to the 30 biggest coal power companies in 2020 fell by nine per cent from 2019, but remains at a very high level of $39 billion.

Patricia Espinosa, Executive Secretary of the UNFCCC

The oil and gas sector where banks have made the most policy progress was in the Arctic, by restricting direct financing for projects in the region. Yet JPMorgan Chase, ICBC, China Minsheng Bank, and Barclays remain the biggest funders of companies with major operations in the Arctic since the adoption of the Paris Agreement.

“Facing the prospect of a global recession, investment in coal power infrastructure will become even riskier for borrowing countries and lenders. In the era of the New Development, only by persisting in the continuous improvement of the ecological environment can China truly achieve the development of innovation, coordination, green, open and sharing.

“Only in this way can China build a prosperous, strong, civilized, and harmonious modern power in the middle of this century. It will only be able to do this with the support and the endorsement of major stakeholders in all fields, and state-owned banks like ICBC play a fundamental role in this pathway,” says Yossi Cadan, Global Finance Campaign Manager at 350.org.

The report also examines existing climate policy commitments by banks and finds them grossly insufficient and out of alignment with the goals of the Paris Agreement across the board. Recent high profile bank policies focus either on the distant and ill-defined goal of achieving ‘net zero by 2050’, or on restricting financing for unconventional fossil fuels.

In general, existing bank policies are strongest with regards to restrictions for direct project-related financing. And yet, project-related financing made up only five per cent of the total fossil fuel financing analysed in this report.
The authoring organiszations behind this report are united in their demand that respect for Indigenous rights, including the right to free, prior, and informed consent, and human rights more broadly must be a non-negotiable requirement for all bank financing decisions.

According to Ginger Cassady, Executive Director, Rainforest Action Network, “The unprecedented COVID-19 dip in global financing for fossil fuels offers the world’s largest banks a stark choice point going forward; they can decide to lock in the downward trajectory of support for the primary industry driving the climate crisis or they can recklessly snap back to business as usual as the economy recovers.

x

U.S.-based banks continue to be the worst financiers of fossil fuels by a wide margin. Going into the Glasgow climate summit at the end of the year, the stakes could not be higher. Wall Street must act now to stop financing fossil expansion and commit to fossil zero, so as to truly align its financing practices with keeping our planet from heating up more than 1.5 degrees.”

For Executive Director, Indigenous Environmental Network, Tom Goldtooth, “We must understand that by bankrolling the expansion of oil and gas the top banks of the world have blood on their hands and no amount of greenwashing, carbon markets, unproven techno-fixes, or net-zero commitments can absolve their crimes against humanity and Mother Earth.

“Indigenous lands globally are being plundered, our inherent rights are being violated and the value of our lives has been diminished to nothing in the face of fossil fuel expansion. For the sacredness and the territorial integrity of Mother Earth, these banks must be held accountable for covering the cost of her destruction.”

x


Receive News Alerts on Whatsapp: +2348136370421

No comments yet