Thirty-five banks worldwide have funneled $2.7 trillion to fossil fuel projects in the last four years since the Paris Agreement was adopted in December 2015 with financing on the rise each year despite the escalating climate change crisis, a new report unveiled.
Banking on Climate Change 2020: Fossil Fuel Finance 2020 report prepared by Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and the Sierra Club showed that international banks continued to finance fossil fuel investments.
The United Nation's Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5° showed that the world needs to rapidly reduce global carbon emissions to avert the most severe consequences of the climate crisis.
Although the world needs to accelerate the fight against climate change, international banks have financed 2,100 companies through fossil fuel investments in the last four years, the report shows.
Financing from these global banks amounted to $639.7 billion in 2016, $673.7 billion in 2017 and $700.2 billion in 2018. And in 2019, fossil fuel financing reached a peak over this period of $735.6 billion.
Climate and Energy Leader Researcher at Rainforest Action Network, Alison Kirsch, said the report paints a deeply disturbing picture of how financial institutions are driving all towards a climate disaster.
"The data reveal that global banks are not only ramping up financing of fossil fuels overall but are also increasing funding for the companies most
responsible for fossil fuel expansion," Kirsch noted.
"This makes it crystal clear that banks are failing miserably when it comes to responding to the urgency of the climate crisis," she said.
-U.S. banks lead fossil financing
The report also found that fossil fuel financing continued to be dominated by big U.S. banks; JPMorgan Chase, Wells Fargo, Citi and the Bank of America.
Together, these four banks accounted for a staggering 30% of all fossil fuel financing from the 35 major global banks since the Paris Agreement was adopted, the report said.
JPMorgan Chase has channeled $271 billion in fossil financing since the Paris accords ranking the bank as the biggest fuel bank in the world. The report said that JPMorgan Chase is the most aggressive funder in the most dangerous and harmful categories over the last four years leading in fossil fuel expansion, Arctic oil and gas, offshore oil and gas, and fracking.
Wells Fargo provided $197.9 billion to become the second fossil financing bank while Citi followed with $187.6 billion and the Bank of America with $156.9 billion.
Royal Bank of Canada (RBD) came out as the fifth-largest fossil fuel financing bank with $141 billion over the same period making the RBD the worst fossil banker in the country.
Japan's largest bank MUFG also channeled $118.8 billion to fossil fuels while in Europe, Barclays is cited as the worst bank with $118.1 billion in financing.
Additionally, the Bank of China became the leading fossil financing bank in the country with $84 billion, according to the report.
- Almost one-third of total finance to new projects
The report tracked that funding for fossil fuel expansion was conducted by aggregating bank financing for 100 companies aggressively planning new coal, oil, and gas extraction and related infrastructure.
Of the $2.7 trillion in fossil fuel finance, $975 billion went to these companies.
Climate Action Network Europe, Turkey Climate and Energy Policy Coordinator, Elif Gunduzyeli, said the report shows that banks withdrawing from coal are continuing to finance oil and gas while triggering the climate change crisis.
"All these fuels need to stay underground to be able to fight against climate change," she said.
"When assessed on restrictions on financing for fossil fuel expansion and commitments to phase-out fossil fuel financing on a 1.5°C-aligned trajectory, no banks are even close to being aligned with climate stability, despite several recent policy announcements," the report said.
"As the toll of death and destruction from unprecedented floods, droughts, fires and storms grows, it is unconscionable and outrageous for banks to be approving new loans and raising capital for the companies that are pushing hardest to increase carbon emissions," Kirsch concluded.
By Nuran Erkul Kaya