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Banks can pledge to be better stewards of the planet through emission reductions and other actions, but their money continues to circulate oil for now.
Some 60 of the world’s largest commercial and investment banks invested a total of $ 3.8 trillion in fossil fuels from 2016 to 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, from pre-industrial levels. Beyond the financing of oil plots, global coal projects also continue to be financed.
This is revealed in a report entitled 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 annually for over a decade.
According to the report, the three banks that funded the most fossil fuels in 2020 were JPMorgan Chase JPM,
to $ 51.3 billion; Citi C,
to $ 48.4 billion; and Bank of America BAC,
with $ 42.1 billion. JPMorgan’s fossil fuel funding since the Paris declaration has reached $ 317 billion, to lead all banks, according to the report. Wells Fargo & Co.’s WFC funding for fossil fuels fell 42% to $ 26.4 billion in 2020.
Read: Goldman Sachs pushed to disclose if its oil financing is against its net zero emissions target
French bank BNP Paribas BNP,
It has been shown to increase its oil, gas and similar interest loans by 41% in 2020 compared to the previous year. Its clients have included BP BP,
Total DEAD,
and Royal Dutch Shell RDS.A,
who have pledged to reduce their dependence on fossil fuels and invest more in renewable energy companies.
On an annual basis, total fossil fuel financing among the report’s banks fell 9% in 2020, although largely due to the COVID-19 shutdown.
Read: With $ 54 trillion, global investors tell companies pledging net zero emissions to show off their work
“This report serves as a reality check for banks who believe vague ‘net-zero’ goals 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 of dollars to lock us into further climate chaos.”
Bank of America joined some other major banks earlier this year, including JPMorgan Chase and Morgan Stanley MS,
which pledged to achieve net zero greenhouse gas emissions through its financing before 2050. Bank of America, as part of a group working to align carbon accounting reporting, then pledged to disclose its funded programs no later than 2023.
Val Smith, director of sustainability at Citi, said in a blog post this week, the lender will work with existing clients of fossil fuel banks to move first to a public reporting of greenhouse gas emissions and finally, a gradual elimination of the financing offered to companies that do not respect 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 energy transition must grow to $ 4 trillion per year, said the head of global thematic investment research at Bank of America. , Haim Israel, in a report earlier this year.
Don’t miss: Ignore climate change at your peril, says BlackRock – transition to green energy will result in 25% production growth by 2040
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