The latest Banking on Climate Chaos report shows that the world's top 65 banks are funding fossil fuel projects that are pushing global temperatures higher and causing the breakdown of environmental systems that imperil life on Earth.
What's happening?
"While the world's top scientists from the International Energy Agency repeatedly state that there is no need for a single new oil field, tanker, pipeline, or any fossil fuel expansion whatsoever, banks ignore climate risk and increase finance for dirty energy companies expanding their sector," according to a Rainforest Action Network news release.
The 16th annual study shows leading financial institutions spent $162 billion more in 2024 than they did in 2023 to support over 2,700 dirty energy companies.
JPMorgan Chase, Citigroup, Bank of America, and Barclays increased their commitments to these pollution-producing corporations by $10 billion apiece.
U.S. banks JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo accounted for 21% of global fossil fuel financing. In total, American banks spent $289 billion on loans, bonds, and acquisition financing — one-third of the global tally.
Mizuho Financial, Mitsubishi UFJ Financial, Barclays, the Royal Bank of Canada, Santander, BNP Paribas, Deutsche Bank, HSBC, and others were flagged as the top international offenders.
Why is this important?
Aside from harming human health and destroying animal and plant biodiversity, heat-trapping gases produced by the burning of coal, oil, and gas for energy are bad for business.
This report paints a bleak picture, but investments in dirty energy companies may have peaked, and clean energy underwriting is expanding. Another analysis shows that if dirty energy assets are stranded, it could cost taxpayers $2.3 trillion.
Still, the worldwide transition to cleaner sources of power will not reach a crescendo until such mammoth corporations commit to match the changes being made by individuals, organizations, and governments around the globe. With so much money at stake, a reversal would do wonders for people, wildlife, plant life, and the planet.
"No major oil and gas companies we analyze plan to do anything even close to what is needed to hold global warming to 1.5 degrees Celsius," David Tong, global industry campaign manager at Oil Change International, stated.
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Definitely 👍 "By injecting a staggering $869 billion into fossil fuel financing in 2024 alone, the world's largest banks fund the climate chaos that fossil fuel companies wreak on people and communities worldwide."
What's being done about banks' underwriting of fossil fuel companies?
If you use a bank named in the report, you can make your displeasure known by switching to a greener option. Plenty of alternatives exist, and you can do the same with your 401(k) and stocks.
Otherwise, the report demanded that banks: stop financing clients that expand the use of fossil fuels; adopt pollution reduction goals for clients to keep rising temperatures to 1.5 C above preindustrial levels; require clients to publish transition plans to end fossil fuel activity; ensure clients protect human rights and safeguard Indigenous Peoples; and scale up sustainable power financing for "a just and fair energy transition."
"Only rapid and robust binding government regulation and oversight can make banks change course," Rainforest Action Network policy lead Allison Fajans-Turner stated. "Without binding regulation, banking on climate chaos will remain banks' dominant investment strategy, tanking our economy and our planet."
Lucie Pinson, founder and director of Reclaim Finance, added: "The only way banks will contribute to addressing the climate crisis and its devastating human toll is if they are made to.
"All stakeholders must act now — starting with the supervisory authorities whose mandate is to protect the financial system from the growing risks of climate change."
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