Banks may promise to be better stewards of the planet by reducing emissions and other actions, but their money keeps pumping oil for now.
About 60 of the world’s largest commercial and investment banks put a total of $ 3.8 trillion in fossil fuels from 2016 to 2020, five years after the signing of the voluntary Paris Agreement. The aim of the multinational pact is to limit global warming to well below 2 degrees Celsius, and preferably to 1.5 degrees, compared to pre-industrial levels. In addition to funding for oil patches, global coal projects also continue to be financed.
This is according to a report called Banking on Climate Chaos 2021 published on Wednesday by a handful of climate organizations, including the Rainforest Action Network. The group’s financial sector review has been published every year for more than a decade.
The three banks that did the most fossil fuel financing in 2020, according to the report, were JPMorgan Chase JPM,
in $ 51.3 billion; Citi C,
in $ 48.4 billion; and Bank of America BAC,
with $ 42.1 billion. JPMorgan’s fossil fuel financing since the Paris declaration has reached $ 317 billion, to lead all banks, according to the report. Wells Fargo & Co.’s WFC funding in the fossil fuel sector fell 42% to $ 26.4 billion in 2020.
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French bank BNP Paribas BNP,
demonstrated that it had increased its loans for oil, gas and similar interests by 41% in 2020 compared to the previous year. His clients include BP BP,
Total TOT,
and Royal Dutch Shell RDS.A,
who pledged to reduce their dependence on fossil fuels and to invest more in businesses related to renewable energy.
On an annual basis, total fossil fuel financing among banks in the report fell 9% in 2020, although due in large part to the shutdown of COVID-19.
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“This report serves as a reality check for banks that think vague ‘net zero’ targets are enough to stop the climate crisis,” said Lorne Stockman, senior research analyst at Oil Change International. “Our future goes where the money flows, and in 2020, these banks invested billions to trap us in even greater climate chaos.”
Bank of America earlier this year joined with other major selected banks, including JPMorgan Chase and Morgan Stanley MS,
which pledged to achieve net greenhouse gas emissions through its financing before 2050. Bank of America, as part of a group working to align carbon accounting reports, said then that it is committed to disclosing its financed emissions up to 2023.
Val Smith, director of sustainability at Citi, said in a blog post this week that the lender will work with existing fossil fuel bank customers to make the transition first to a public greenhouse gas emissions report and, eventually, for a gradual elimination of financing offered to companies does not comply with adhering to carbon reduction standards.
Banks 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 investments in energy transition need to increase to $ 4 trillion a year, Bank of America’s head of global thematic investment research, Haim Israel, said in a report earlier this year.
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