A new report has found that the world’s banks channelled $742bn into fossil fuel expansion projects in 2021, despite various climate commitments announced by global lenders.
The report, conducted by a coalition of environmental groups, led by the Rainforest Action Network (RAN), is said to be the most comprehensive analysis to date of banking’s backing of fossil fuels. Alongside RAN, contributing groups include BankTrack, the Indigenous Environmental Network, Oil Change International, Reclaim Finance, Sierra Club, and Urgewald.
According to the report’s findings, since the Paris Agreement in 2015, the world’s 60 largest private banks have sunk $4.6tn into fossil fuel financing. Of the banks reviewed, the four largest lenders to fossil fuel projects were JPMorgan Chase, Wells Fargo, Citi, and Bank of America, accounting for a quarter of all fossil fuel financing over the past six years.
Notably, these four largest lenders are also members of the Net-Zero Banking Alliance, which has a commitment of aligning with net-zero emissions by 2050 using “robust, science-based guidelines”. However, following these financial institutions’ signing of the alliance, each was found to have financed fossil fuel expansion projects for majors such as Saudi Aramco and ExxonMobil.
While a number of the 60 banks considered have similar climate targets, the RAN report said that these were often worded vaguely and gave scope for the companies to act against them. Of the 44 shown to have net zero by 2050 goals, the report said that 27 did not have a “meaningful no-expansion policy for any part of the fossil fuel industry”.
“These banks are funding climate chaos by financing fossil fuel extraction to the tune of $742bn in 2021 alone,” said Mea Johnson, divestment campaign coordinator at the Indigenous Environmental Network. “We will not back down until our natural balance is restored and anyone helping fund the extractive destruction of our communities will be held accountable.”
Alison Kirsch, research and policy manager at RAN, said: “Any further expansion of fossil fuels risks locking humanity into generations of climate catastrophe. Yet the top fossil clients of the world’s largest banks are still being showered with tens of billions of dollars even as they actively expand drilling, mining, fracking, and other fossil fuel development unabated.”
The major Wall Street banks may soon have to face the music however, as they are set to answer shareholders in the next two months, with a focus on how they are responding to climate change commitments.
“With Wall Street banks leading the charge, these financial institutions are directly complicit in undermining a climate stable future for us all and must immediately end their support of any further fossil fuel infrastructure expansion,” says Kirsch.