Stockholm (NordSIP) – The latest issue of BankTrack’s annual Banking on Climate Chaos report is out. The comprehensive analysis examines commercial and investment bank financing for the fossil fuel industry, aggregating their leading roles in lending and underwriting debt and equity issuances. This year’s edition, the fourteenth in a row, makes for a depressing reading. The report points to continued bank support for companies actively expanding in fossil fuels, highlighting several key sectors: tar sands oil, Arctic oil and gas, Amazon oil and gas, offshore oil and gas, fracked oil and gas, LNG, coal mining, and coal-fired power.
According to BankTrack’s analysis, fossil fuel financing from the world’s 60 largest banks has reached a staggering USD 5.5 trillion in the seven years since adopting the Paris Agreement, with USD 673 billion in fossil fuel financing in 2022 alone. Overall, U.S. banks dominate the top of the list, accounting for 28% of all fossil fuel financing in 2022. JPMorgan Chase remains the world’s worst funder of climate chaos since the Paris Agreement. Citi, Wells Fargo, and Bank of America are still among the top five since 2016. For the first time since 2019, however, a Canadian bank is the number one annual financier of fossil fuels. Royal Bank of Canada (RBC) showered fossil fuel projects with USD 42.1 billion in 2022, including USD 4.8 billion for tar sands and USD 7.4 billion for fracking.
Remarkably, even as fossil fuel companies made USD 4 trillion in profits last year and oil majors like Exxon Mobil and Shell PLC refrained from asking for money, banks still provided billions in financing in 2022. In the wake of Russia’s war on Ukraine, fossil fuel companies doubled down on the expansion and weakened their climate commitments. According to the report, the top 30 companies exploring LNG used the crisis to secure nearly 50% more financing in 2022 compared to 2021.
“Net zero nets nothing,” state the report’s authors, commenting on banks’ widely advertised decarbonisation commitments. Of the 60 banks featured in the report, 49 have set some sort of net-zero decarbonisation targets in the last two years, whether through the United Nations-convened Net-Zero Banking Alliance (NZBA) or their own initiative. “The truth is that more and more businesses are making Net Zero commitments, but benchmarks and criteria are often dubious or murky, and this can mislead consumers, investors, and regulators with false narratives,” says U.N. Secretary-General António Guterres, as quoted in the report. “It feeds the culture of climate misinformation and confusion and leaves the door open to greenwashing.”
Overall, according to the analysis conducted by Reclaim Finance for the report, 2022 was a slow year for new fossil fuel financing policies. Though ambitious exclusion policies remain essential for climate and human rights protections, few banks have them. Danske Bank was the only in-scope bank to adopt a new concrete commitment to excluding companies with upstream fossil-fuel expansion plans in the past year.
Alongside BankTrack, Banking on Climate Chaos is co-authored by Rainforest Action Network, Indigenous Environmental Network, Oil Change International, Reclaim Finance, Sierra Club, and Urgewald. Over 550 organisations from more than 70 countries worldwide have endorsed the report and are calling on banks to stop funding climate destruction.
The world is watching. It is high time for banks to take their role in combating climate change seriously.
