Big banks invest $3.8bn in financing fossil fuel companies since 2015

Sixty of the world’s biggest banks provided $3.8bn of financing for fossil fuel projects from 2016 to 2020, revealed a report by a coalition of NGOs.

Fossil fuel financing dropped 9% last year, alongside the worldwide drop in demand for fossil fuels and production due to the Covid-19 pandemic.

Yet the levels reached in 2020 remained higher than in 2016.

Funding for the world's 100 fossil fuel companies with the biggest expansion plans actually rose by 10%. Citi was the biggest financier of these 100 companies in 2020.

However, for the five years up to 2020, JPMorgan Chase was the top banker fir fossil fuels, though its funding did drop significantly last year, said the report.

Citi was close behind, in second place, followed by Wells Fargo, Bank of America, RBC, and MUFG. Barclays took the cake in Europe and Bank of China was the worst in China.

The report also took aim at the fact that funding from JPMorgan Chase, Citi, and Bank of America was despite their voicing support for the Paris Agreement to combat climate change.

Regarding banks’ future-facing policies to restrict financing for fossil fuels, the report said that UniCredit had the strongest policy overall, though it only earned about half of the available points.

Of the 60 banks concerned, 17 had committed to stop fossil fuel funding by 2050 and turn 'net zero', but the report labelled their pledges as "dangerously weak, half-baked, or vague".

It also called on banks to completely prohibit financing for all fossil fuel expansion projects and for all companies expanding fossil fuel extraction and infrastructure along the entire value chain.

Lenders were urged to protect the rights of indigenous people and commit to measure, disclose, and set targets to zero out the absolute climate impact of their overall financing activities on a 1.5°C-aligned timeline, including short-, medium-, and long-term targets.