New report uncovers disturbing truth behind major bank investments: 'Underestimated how quickly [it] would accelerate'

To improve their public image and drum up business, many corporations have publicly pledged to improve their impact on the environment in a variety of ways. 

Banks are no exception, with many pledging to stop or reduce funding for environmentally damaging projects. However, these promises are not legally binding, and it is all too common for businesses to walk back their climate commitments.

A recent analysis by Stand.earth showed that billions of dollars of funding have been provided to fossil fuel companies for oil and gas extraction in the vital, vulnerable Amazon, despite all pledges to the contrary, Mongabay reported.

What's happening?

The new report, "Banks vs. The Amazon," covered the period from 2016 to the present. During that time, 330 banks have provided $15 billion in direct financing for oil and gas extraction in the Amazon, with $2 billion of that amount disbursed between January 2024 and last June.

Approximately 80% of that $2 billion went to enrich just six companies: Pluspetrol Camisea, Hunt Oil Peruconga, Canadian firm Gran Tierra, Brazilian companies Petrobras and Eneva, and the Cyprus-based oil trader Gunvor.

While some of the banks examined have reduced their contributions to oil and gas extraction in the Amazon thanks to theoretically eco-friendly policies, none have stopped participating. Meanwhile, many financial institutions have walked back their climate promises, and fossil fuel financing has increased globally during this time.

Why is bank financing for fossil fuel companies important?

According to the United Nations, the use of fossil fuels is the No. 1 cause of the Earth's increasing temperature.

These dirty energy sources produce carbon dioxide and other types of air pollution that trap heat in our atmosphere, overheating the planet and leading to an increased rate of natural disasters, not to mention the impacts on both agriculture and the natural world.

While fossil fuel companies are wealthy and profitable, they could not perform major extraction projects without insurance and funding from financial institutions. Funding them directly enables all of the pollution produced by those fuel sources, as well as the environmental damage from the extraction process.

"Even climate scientists underestimated how quickly climate change would accelerate," said Heffa Schuecking, director of the nongovernmental organization Urgewald, per Mongabay. "It's very simple: As long as banks and investors continue supporting the fossil fuel industry, temperatures will continue to rise."

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