More than $700 billion in loans and underwriting went to companies conducting business in fossil fuels last year, channeled through 60 of the world’s largest private banks, according to a report released on Monday by several environmental groups.
The annual report, produced by the Sierra Club and the Rainforest Action Network, among others, shows a slight decline in bank financing of oil, gas and coal since 2021, but researchers say it is not declining fast enough.
Environmental activists have sought for decades to put pressure on the money that supports the fossil fuel industry, hoping to galvanize a transition to clean energy. Climate advocates have seen some success in recent years as ESG (environmental, social and governance) principles have begun to be considered in the business strategies of many major financial institutions.
But Monday’s report highlights how global banks continue to finance new and existing fossil fuel ventures. Since 2016, when the Paris Agreement was ratified and nations around the world agreed to limit emissions, banks have financed fossil fuel interests to the tune of about $7 billion, according to the report.
The top financier of fossil fuels for three years in a row: JPMorgan Chase, which, according to the report, increased its commitments to fossil fuel-related businesses from about $38.7 billion in 2022 to $40.8 billion in 2023.
“JPMorgan has taken a number of steps to try to reinforce its climate commitments,” said April Merleaux, research manager at the Rainforest Action Network and principal investigator on the report. “But the practices and policies they are implementing are not moving fast enough to recognize the urgency of this moment. Very few banks are reducing their fossil fuel financing at the necessary pace.”
Some banks questioned the methodologies used by researchers to compile the report, expressing concerns about the accuracy of the data and the way in which transactions were categorized as fossil fuel-related.
In a statement to NBC News, a JPMorgan Chase spokesperson said the company’s own data “reflects our activities more comprehensively than third-party estimates” and emphasized its commitment to “zero-carbon energy.”
Satyajit Bose, a professor of sustainability management at Columbia University who was not associated with the report, said the study’s methodology was reasonable overall, although he questioned some elements. For one thing, the authors indiscriminately considered sustainability-linked bonds — a type of green financing issued by banks to encourage sustainable businesses — as related to fossil fuels if the company receiving the bonds works in the fossil fuel industry.
Bose also expressed concerns about the report’s categorization of refinanced loans as repeat loans, which he said could be misleading because it ignored the terms of the loan.
Just behind JPMorgan Chase on the report’s list of the “dirty dozen” of fossil fuel financiers was Tokyo-based Mizuho Financial Group, followed by Bank of America.
Mizuho has increased its fossil fuel financing in recent years to more than $37 billion in total, with a particular interest in methane gas, also known as natural gas. According to the report, the Japanese bank has committed $10.9 billion to gas expansion projects in 2023.
A broader surge in interest in methane gas amid Europe’s energy crisis — fueled by Russia’s invasion of Ukraine — may have contributed to global gas financing last year, Merleaux said.
Mizuho declined to comment on the report.
Meanwhile, Bank of America came in third place for its nearly $34 billion in financial commitments to companies doing business in fossil fuels. In a statement to NBC News, a spokesperson said Bank of America ranks high in energy financing volume, channeling loans and underwriting in equal proportion to low-carbon energy and fossil fuel companies.
Advocacy groups are planning an active summer of protests on Wall Street to further pressure banks to stop financing fossil fuel interests. The “Summer of Heat”, organized by groups such as Climate Defenders and Planet Over Profit, began in April with protesters targeting Citigroup for its financial activities.
According to the new report, Citigroup has provided fossil fuel interests with nearly $400 billion since 2016, although its commitments in the area have declined since 2019.
A Citigroup spokesperson said in a statement that the company is committed to transitioning to a low-carbon economy and that since 2020 it has invested more than $400 billion toward its goal of investing $1 trillion in sustainable finance by 2030. The group also aims to achieve net zero carbon emissions for its operations by 2030.
At an upcoming protest in June, Citigroup will continue to be the focus, climate action organizers said.
“Citi is one of the biggest funders that we believe we can transfer,” said Jonathan Westin, organizer of Climate Defenders. “We are trying to send a message to Wall Street banks that they need to get out of fossil fuels and make real plans to get out of financing pipelines, natural gas facilities and oil rigs around the world.”
This article was originally published in NBCNews. with
