Oil Change International, Rainforest Action Network, BankTrack, Indigenous Environmental Network, Reclaim Finance, Sierra Club, Urgewald.
This report, Banking on Climate Chaos 2022, analyzes fossil fuel financing and policies from the world’s 60 largest commercial and investment banks. We reveal that fossil fuel financing from the world’s 60 largest banks has reached nearly USD $4.6 trillion in the six years since the adoption of the Paris Agreement, with $742 billion in 2021 alone. It also highlights case studies of bank financing for destructive fossil fuel projects and companies around the world.
JPMorgan Chase remains the world’s worst funder of climate chaos, with JPMorgan Chase, Wells Fargo, Mizuho, MUFG, and all 5 Canadian banks among those that increased their fossil financing from 2020 to 2021. Additionally, while 40 of the 60 banks profiled now have some restriction on financing oil and gas, only 5 banks explicitly cover oil and gas expansion companies, despite the IEA clearly stating that there is no room for investments in new oil and gas in a 1.5°C scenario, as revealed by the recently published Oil & Gas Policy Tracker and Coal Policy Tool in providing detailed assessments on banks’ fossil fuel policies.
The report also assesses bank financing for top companies in certain spotlight fossil fuel sectors, and highlights the communities fighting projects in these sectors that threaten their lives and livelihoods.
- Tar sands oil: Alarmingly, tar sands saw a 51% increase in financing from 2020–2021, to $23.3 billion, with the biggest jump coming from Canadian banks RBC and TD.
- Arctic oil and gas: JPMorgan Chase, SMBC Group, and Intesa Sanpaolo were the top bankers of Arctic oil and gas last year. The sector saw $8.2 billion in funding in 2021, underscoring that policies restricting direct financing for projects don’t go far enough.
- Offshore oil and gas: Big banks funneled $52.9 billion into offshore oil and gas last year, with U.S. banks Citi and JPMorgan Chase providing the most financing in 2021. BNP Paribas was the biggest banker of offshore oil and gas over the six-year period since the Paris Agreement.
- Fracked oil and gas: Fracking saw $62.1 billion in financing last year, dominated by North American banks with Wells Fargo at the top, funding producers like Diamondback Energy and pipeline companies like Kinder Morgan.
- Liquefied natural gas (LNG): Morgan Stanley, RBC, and Goldman Sachs were 2021’s worst bankers of LNG, a sector that is looking to banks to help push through a slate of enormous infrastructure projects.
- Coal mining: Coal mining financing is led by the Chinese banks, with China Everbright Bank and China CITIC Bank as the worst financiers in 2021. Big banks overall provided $17.4 billion to the sector last year.
- Coal power: Coal power funding has been essentially flat the last three years, at around $44 billion — which is alarming given that coal power needs to be rapidly phased out this decade and next. China Merchants Bank and Ping An Group led financing for the sector last year.
As for banks heading in the right direction, France’s La Banque Postale has set the bar for oil and gas policies, publishing in 2021 a commitment to end financing for all companies expanding oil and gas, and exit the sector completely by 2030. Banks such as Crédit Agricole and Nordea Bank have made similar commitments on coal. Their global peers must also take on the crucial task of immediately ending financing for fossil fuel expansion and beginning to phase out all other fossil fuel financing, lest they lead our world further into climate disaster.