…invest $6.9bn in exploration
Despite a growing global commitment to transitioning away from fossil fuels, a new report has shown major big banks are still pouring vast sums of money into the oil and gas industry.
The revelation comes from the 15th annual Banking on Climate Chaos report authored by an organisation called Oil Change International, part of a group of climate NGOs committed to putting an end to the oil and gas industry.
According to this report, since the Paris Agreement in 2016, the world’s 60 largest private banks financed fossil fuels with $$6.9 trillion as nearly half – $3.3 trillion – went towards fossil fuel expansion.
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“In 2023, banks financed $705 billion in fossil fuel financing with $347 billion going to fossil fuel expansion alone,” it added.
Further findings showed JP Morgan remains the world’s number one fossil fuel financier in the world, committing $40.8 billion to fossil fuel companies in 2023 while Mizuho, a leading global bank with one of the largest customer bases in Japan shot up to second place in the report in both fossil fuel financing ($37.0 billion) and financing for the expansion of fossil fuels ($18.8 billion).
The worst funder of fossil fuel expansion since the Paris Agreement is Citibank, providing $204 billion since 2016.
Recently, some banks increased their exposure to climate risk by rolling back their already weak policies. Bank of America, which ranks third on the 2023 list of worst fossil fuel funders, is a glaring example: they dropped their exclusions on Arctic drilling, thermal coal, and coal-fired power plants; they have neither energy ratio disclosures nor near-term absolute emission targets, and they abandoned the Equator principles.
At the time of the report’s publication, they are the only bank major exhibiting all of these climate policy failures at once.
The “Dirty Dozen” also includes lenders such as Barclays, MUFG, Scotiabank, and HSBC, as well as RBC and the report includes a lot of language aimed at making these banks feel embarrassed about their business practices.
Another report by Global Witness released this February, stated that Big Oil majors paid their shareholders a record $111 billion in dividends on the back of record profits for 2022.
Those record profits were driven by the energy crunch in Europe that highlighted the importance of energy security in a way that everyone could understand—except climate NGOs, it appears.
The Oil Change International report noted that financing for liquefied natural gas increased last year, hitting $120.9 billion.
From their perspective, this must be a worrying trend. From the perspective of the banks themselves, this is good business—because demand for LNG is on the rise with Europe switching from pipelines to LNG carriers.
Even record electricity generation from wind and solar in 2023 did not depress demand for liquefied gas.
Worse still for climate NGOs, funding for fracking increased last year as well, reaching $59 billion, provided to a total 236 companies by lenders including already named and shamed JP Morgan, Citi, and BofA, along with Morgan Stanley and Wells Fargo. The reason this happened was that demand for oil, including shale oil, was also on the rise, just like demand for natural gas.
