Report: Banks have funnelled $5.5trn into fossil fuels since Paris Agreement

That is according to this year’s edition of the Banking on Climate Chaos report, released by a coalition of NGOs including Reclaim Finance and BankTrack.

The report looks at which banks are providing finance to the fossil fuel sector, with a specific focus on the most destructive sub-sectors such as tar sands, and on provisions to the companies most aggressively pursuing expansion that would jeapordise the delivery of the Paris Agreement. The report also assesses how this financing weighs up against banks’ stated climate commitments.

According to the report, the world’s top financier of fossil fuels in 2022 was the Royal Bank of Canada, which provided $42.1bn – 4.2% more than it did in 2021. The report adds that JPMorgan Chase, which has topped the table since 2019, provided $39.2bn to fossil fuels in 2022.

The bank which has increased finance to the fossil fuel sector most, year-on-year, is France’s Credit Mutel. It provided almost eight times as much finance in 2022 than in 2021 but provided a comparatively small $108m. Elsewhere, Spain’s CaixaBank more than trebled its fossil fuel finance and US-based PNC Bank almost doubled it.

European focus

The report makes it clear that US-based banks are by far the largest financiers of the fossil fuel sector, having contributed more than $1.5bn of the $5.5bn provided since 2015. Canada and China are also top offenders, having contributed close to $1bn each.

But the authors also warn that European banks are also culpable. Banks in France and the UK are named as the fourth and fifth biggest contributors to fossil fuel finance over the seven-year period. Collectively, European banks have poured US$1.3 trillion into fossil fuels since the Paris Agreement was adopted.

France’s BNP Paribas and Credit Agricole, as well as the UK’s Lloyds, are named in the report alongside Credit Mutel as banks which have increased their fossil fuel finance year-on-year.

BNP Paribas is named as the fourth biggest backer of companies expanding fossil fuel production in 2022, while Barclays comes in at seventh place. Barclays is also in the top-ten financiers of tar sands and the top-five financiers of Arctic oil and gas.

On Arctic oil and gas, Credit Agricole is named as the fifth-biggest financier in 2022 and Societe Generale as tenth.

Reclaim Finance’s director Lucie Pinson said: “The era of French leadership is over. Crédit Mutuel has watered down its commitment to stop supporting oil and gas expansion, while BNP Paribas and Crédit Agricole are among the few banks that have increased their financing for fossil fuels last year.”

Germany’s Deutsche Bank, while generally providing less financial services to the fossil fuel industry in 2022, massively increased its lending to LNG companies. From 2021 to 2022 the bank almost tripled its lending here, to more than $906m.

Make My Money Matter’s chief executive Tony Burdon said: “This report shows what has been clear for far too long – our banks are in a dangerous relationship with the fossil fuel industry.

“Despite the worsening effects of climate change, the UK’s five largest high street banks – Barclays, HSBC, Santander, NatWest and Lloyds – provided a staggering $37bn to the fossil fuel industry in 2022 alone.  Even more worryingly, $5.7bn of this went to the world’s biggest expanders of oil, gas and coal, despite overwhelming evidence that further fossil fuel expansion risks driving catastrophic climate change.

“This cannot continue. Banks must listen to the science – and respond to the growing movement of savers who want to make their money matter – by immediately ruling out funding for fossil fuel expansion. Time is running out, and failure to act is a failure for people and for planet.”

Thee report assesses 60 banks. The UK’s worst offender for fossil fuel finance since the start of 2016 is Barclays, with almost $190.6bn provided. Barclays comes in at seventh out of the 60 places. HSBC is in 13^th, Santander in 32^nd, NatWest in 46^th and Lloyds in 48^th.