The world’s most powerful banks have funded fossil fuel projects to the tune of $4.6 trillion in the six years since the Paris Agreement, a new report from a group of NGOs finds. A quarter of that funding comes from just four U.S. banks—JPMorgan Chase, Citi, Wells Fargo, and Bank of America—all of which have signed onto an international initiative of banks committed to reaching a “net zero” target.
“Fossil fuel companies wouldn’t be able to do what they do without funding from big banks—these banks provide companies with the capital they need to build and maintain enormous, pricey fossil fuel infrastructure,” Alison Kirsch, the Research and Policy Manager at the Rainforest Action Network and one of the authors of the new Banking on Climate Chaos report, told Earther in an email.
In order to dig into the big-name money behind global fossil fuel projects, the report looks at financing from the world’s 60 largest banks. Most of the data in the report, Kirsch explained, is sourced from Bloomberg’s financial software, with some added from IJGlobal, a project and infrastructure finance database.
“We also adjust down the figures based on the fossil fuel intensity of a given company—so, for instance, a loan to a company whose entire business is dedicated to fossil fuel production is treated differently than a loan to a more diversified company that is also active in other sectors,” Kirsch said.
The results are staggering. The 60 banks footed $742 billion in financing for fossil fuel projects last year alone. This number includes a 51% increase in funding for tar sands projects, a particularly dirty form of oil; $52.9 billion for offshore projects last year, with Citi and JPMorgan Chase leading those investments; and $8.2 billion in funding for Arctic oil projects—which JPMorgan was a lead funder for, despite promising in 2020 to stop funding projects in the Arctic National Wildlife Refuge. (The report explains that while many banks have some sort of policy prohibiting funding some forms of Arctic extraction, those policies are often limited and don’t cover the entirety of the region, allowing for some funding loopholes.)
What makes these numbers especially troublesome is that much of the funding comes from institutions that have generated a lot of press and goodwill over their claims that they’re helping to end the climate crisis. In April 2021, more than 100 of the world’s leading banks got together to form the Net-Zero Banking Alliance, which includes high-profile U.S. members like Wells Fargo, Goldman Sachs, JPMorgan Chase, Citi, and Bank of America. However, as the report finds, many of these banks made investments shortly after joining the Alliance that ran counter to their new promises: JPMorgan Chase invested $10 billion in Saudi Aramco just a month after joining, while Citi, JPMorgan Chase, Bank of America, and Morgan Stanley gave $10 billion to ExxonMobil a few months later.
“Banks largely like to say that they are supporting their clients in the transition to a low-carbon economy,” Kirsch said. “However, if that support doesn’t have teeth—requirements around ending fossil fuel expansion that companies must meet in order to continue receiving financing—then we are just going to see more business as usual.”
In recent years, the importance of ending financing for dirty projects has grown in prominence: Agroup of countries, led by the U.S. and the UK, agreed last year at the UN climate conference to end funding for fossil fuel projects abroad. But if big banks keep covering up their continued funding of planet-destroying energy with greenwashing targets and false promises, the industry is just going to keep growing.
“Funding fossil fuels is the biggest way banks contribute to the climate crisis, alongside their funding of deforestation,” Kirsch said. “Banks need to be held accountable for the unique role they are playing in fueling climate chaos via their support for fossil fuel companies whose fossil fuel expansion plans will cook us all.”