A report published on Wednesday by a coalition of campaign groups organised by the Rainforest Action Network (RAN) has found that the Royal Bank of Canada (RBC) is the top annual financer of fossil fuels.
The RAN’s 14th annual report, titled Banking on Climate Chaos, revealed that RBC gave $42.1bn to fossil fuel projects in 2022. This includes $7.4bn for fracking projects and $4.8bn for the excavation of tar sands deposits.. Scotiabank, another Canadian bank, also appeared in the top ten investors.
The Canadian bank has knocked JP Morgan Chase out of top spot, having delivered almost $3bn more than the US firm last year.
Since the Paris Agreement, which seeks to limit global warming to below 1.5oC, was signed in 2015, Canadian banks have provided fossil fuel companies with $862bn in funding. They are becoming “the banks of last resort” for fossil fuels, according to the RAN.
Since the agreement, financing from the world’s 60 largest banks combined has exceeded $5.5tn, the report shows. In 2022 alone, the top 60 banks invested $673bn into companies including TotalEnergies, Venture Global, ConocoPhillips and Saudi Aramco. This figure is down 16% from last year, but this is due to “unusual geopolitical and economic conditions, not shifts in bank policy,” according to the report.
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The report also found that Spain’s Santander was top investor in fuel extraction within the Amazon biome. Chinese banks ICBC, the Agricultural Bank of China and China Construction Bank led financing for Artic oil and gas expansion.
China led the way too in coal mining, with 87% of the $13bn funding coming from Chinese banks including China CITIC Bank, China Everbright Bank and Industrial Bank. Within coal power this share jumped to 97%.
“Dousing the planet in oil, gas and coal”
“Fossil fuel companies are the ones dousing the planet in oil, gas and coal, but big banks hold the matches. Without financing, fossil fuels won’t burn,” said April Merleaux, research and policy manager at RAN, in a press release.
The report found that 43 of the 60 banks investigated, including RBC and JP Morgan, were part of the Net Zero Banking Alliance, whose members have committed to acting on climate change. Of the 60 banks investigated, 49 have pledged to net-zero emissions targets.
“Despite their net-zero language, banks’ policies could be doing more to align with global climate commitments,” said the report’s authors.
Projects funded by RBC include the Coastal Gaslink fracked gas pipeline. The pipeline has been a source of ongoing controversy and a site of repeated protests, principally because it runs through Wet’suwet’en indigenous land against the will of indigenous communities that live within it.
“Banks and financial institutions need to be held accountable for their role in financing false solutions that cause serious life-threatening intensity and threats to Indigenous Peoples worldwide,” added Tom BK Goldtooth, executive director of Indigenous Environmental Network.
“Their lack of transparency and greenwashing finances false solutions like carbon offsets through fake net-zero emissions claims.”