Report Reveals: Global Banks Funnel $6.9 Trillion to Fossil Fuel Industry Since Paris Agreement
The Banking on Climate Chaos Fossil Fuel Finance Report 2024 has unveiled a staggering revelation: the world's largest banks have poured a whopping $6.9 trillion into funding the fossil fuel industry since the signing of the landmark Paris Agreement in 2016. Despite the agreement's objective of curbing global heating to 1.5 degrees Celsius above pre-industrial levels, the financial sector has continued to fuel the expansion of environmentally destructive fossil fuel companies.
Authored by Banking on Climate Chaos, the report underscores the disheartening reality that private interests have perpetuated the carbon-intensive operations of oil, gas, and coal firms, directly contradicting the aspirations of the Paris Agreement. Moreover, the financing provided by banks predominantly supports the expansion of fossil fuel development, exacerbating the climate crisis and its disproportionate impact on vulnerable communities worldwide.
The report's findings shed light on the harsh reality faced by frontline communities, including Indigenous Peoples, Black and Brown communities, low-wage workers, women, fishers, and smallholder farmers. These communities bear the brunt of climate chaos and environmental degradation, despite being the least responsible for the crisis.
Researchers delved into the underwriting and lending activities of the world's top 60 banks, examining their financial support to over 4,200 fossil fuel companies and entities driving degradation in ecologically sensitive regions like the Amazon and Arctic. Shockingly, nearly half of the $6.9 trillion provided to these companies went towards expanding fossil fuel operations, perpetuating ecological destruction and exacerbating the climate emergency.
In 2023, despite pledges by major banks to align with the objectives of the Net Zero Banking Alliance, fossil fuel financing remained substantial, amounting to $705 billion. Notably, US banks emerged as the primary financiers of the fossil fuel industry, with JP Morgan Chase leading the pack by providing $40.8 billion in funding to fossil fuel companies. European banks also played a significant role, contributing just over a quarter of the total financing, with Barclays emerging as Europe's top fossil fuel financier.
Critics of the report raised concerns about its methodology, citing limitations in tracking financing activities across syndicated loans, bond issues, and underwriting arrangements involving multiple banks. Nevertheless, the report underscores the urgent need for banks to transition towards sustainable business models and divest from fossil fuel financing to mitigate the catastrophic impacts of climate change.
