- THE GUARDIAN - Mar 23, 2021 -
Coal, oil and gas firms have received $3.8tn in finance since the Paris climate deal in 2015
The world’s biggest 60 banks have provided $3.8tn of financing for fossil fuel companies since the Paris climate deal in 2015, according to a report by a coalition of NGOs.
Despite the Covid-19 pandemic cutting energy use, overall funding remains on an upward trend and the finance provided in 2020 was higher than in 2016 or 2017, a fact the report’s authors and others described as “shocking”.
Oil, gas and coal will need to be burned for some years to come. But it has been known since at least 2015 that a significant proportion of existing reserves must remain in the ground if global heating is to remain below 2C, the main Paris target. Financing for new reserves is therefore the “exact opposite” of what is required to tackle the climate crisis, the report’s authors said.
US and Canadian banks make up 13 of the 60 banks analysed, but account for almost half of global fossil fuel financing over the last five years, the report found. JPMorgan Chase provided more finance than any other bank. UK bank Barclays provided the most fossil fuel financing among all European banks and French bank BNP Paribas was the biggest in the EU.
Overall financing dipped by 9% in pandemic-hit 2020, but funding for the 100 fossil fuel companies with the biggest expansion plans actually rose by 10%. Citi was the biggest financier of these 100 companies in 2020.
A commitment to be net zero by 2050 has been made by 17 of the 60 banks, but the report describes the pledges as “dangerously weak, half-baked, or vague”, arguing that action is needed today. Some banks have policies that block finance for coal, the dirtiest fossil fuel, but almost two-thirds of funding is for oil and gas companies.
The report’s authors said targeting of banks by campaigners and activist shareholders could help change bank policies but that action by governments was also needed.
“When we look at the five years overall, the trend is still going in the wrong direction, which is obviously the exact opposite of where we need to be going to live up to the goals of the Paris Agreement,” said Alison Kirsch, at Rainforest Action Network and an author of the report. “None of these 60 banks have made, without loopholes, a plan to exit fossil fuels.”
“We have seen progress in restricting financing for special places like the Arctic or greenhouse-gas-intensive forms of oil, like tar sands, but these are such a small piece of the pie,” she said.