Banks can commit to being better stewards of the planet by cutting emissions and other actions, but their money keeps the oil pumping for now.
Some 60 of the world’s largest commercial and investment banks have invested a total of $ 3.8 trillion in fossil fuels between 2016 and 2020, five years after the voluntary signing of the 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. Beyond financing oil patches, global coal projects continue to be financed as well.
That’s according to a report called Banking on Climate Chaos 2021 released 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,
at $ 51.3 billion; Citi C,
at $ 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 space fell 42% to $ 26.4 billion in 2020.
Read: Goldman Sachs lobbied to reveal whether its oil patch financing goes against the net zero emissions target
French bank BNP Paribas BNP,
showed to have increased its loans for oil, gas and similar interest by 41% in 2020 over the previous year. Its clients include BP BP,
and Royal Dutch Shell RDS.A,
They are committed to reducing their dependence on fossil fuels and investing more in businesses related to renewable energy.
On an annual basis, total fossil fuel financing among banks in the report fell 9% in 2020, albeit due in large part to the COVID-19 shutdown.
Read: $ 54 trillion global investors tell companies to commit to zero net emissions to show their work
“This report serves as a reality check for banks who 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 have invested billions to lock us in further climate chaos.”
Bank of America earlier this year joined other large select banks, including JPMorgan Chase and Morgan Stanley MS,
that pledged to achieve net zero greenhouse gas emissions through their funding by 2050. Bank of America, as part of a group working to align carbon accounting reporting, then said it is committing to disclose its issues financed no later than 2023.
Val Smith, Citi’s chief sustainability officer, said in a blog post this week that the lender will work with existing fossil fuel banking customers to transition first to a public greenhouse gas emissions report and eventually to a phasing out of financing offered to companies that do not meet carbon reduction standards.
Banks continue to advise other companies in the transition from dependence on fossil fuels. The economic impact of climate change could reach $ 69 trillion this century, and investments in the energy transition should rise to $ 4 trillion a year, said Bank of America’s head of global thematic investment research, Haim Israel, in a report earlier this year.
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