www.bankingonclimatechaos.org
It’s been over eight years since almost every country in the world came together to sign the Paris Agreement, the most pivotal climate agreement in history. Following the historic pact, major corporations around the world pledged to align with the Paris goals and committed to take steps – some bolder than others – to slash greenhouse gas emissions and prevent catastrophic climate change.
Big banks, too, made these sweeping climate pledges. By the end of 2021, all six major US banks – JPMorgan Chase, Citi, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs – had publicly committed to reach net-zero by 2050, the same goal set out in the Paris Agreement just a few years earlier. But since making this promise, these big banks have mostly continued with business as usual, pouring billions into the companies building new oil wells, pipelines, gas plants, and other fossil fuel projects every year.
The International Energy Agency, the world’s preeminent expert body on energy and climate, has repeatedly made clear that fossil fuel expansion will put our climate goals out of reach. But this year’s Banking on Climate Chaos report reveals that despite these warnings, banks are still betting big on fossil fuels. Since 2016, the year following the Paris Agreement, the world’s 60 largest banks have poured $6.9 trillion into fossil fuel companies around the globe. Nearly half – $3.3 trillion – went to companies continuing to do the most new fossil fuel expansion. In 2023, banks provided $705 billion in fossil fuel financing overall, with $347 billion alone going to fossil fuel expansion.
And the major U.S. banks are among the worst offenders. Here are some quick stats from the report for 2016-2023:
- Biggest fossil fuel funder overall: JPMorgan Chase ($431 billion)
- Biggest funder of fossil fuel expansion: Citi ($204.46 billion)
- Biggest funder of fracking: JPMorgan Chase ($55.95 billion)
- Biggest funder of gas-fired power: Citi ($84.58 billion)
- Biggest funder of liquefied methane gas (LNG): Citi ($55.42 billion)
- Biggest funder of Arctic oil and gas: JPMorgan Chase ($3.65 billion)
- Biggest funder of ultra-deepwater drilling: Bank of America ($9.24 billion)
- Biggest funder of Amazon drilling: Citi ($1.98 billion)
Though banks are still providing huge piles of money to fossil fuel companies, a closer look at the data shows that 2023 was the second consecutive year where overall bank financing for fossil fuel declined. This might seem like good news, but the full story is a bit more complicated.
The reality is that the decline in bank financing likely has more to do with record-breaking windfall profits in the fossil fuel industry, rather than any proactive action by banks to restrict financing for the sector. In the two years since Russia invaded Ukraine, in total, Shell, BP, Chevron, ExxonMobil and TotalEnergies have paid $200 billion to shareholders; Chevron and ExxonMobil alone made $136 billion in profit in the two years since the war began. With so much extra cash on hand, big oil and gas companies haven’t needed to rely as much on banks to support their dangerous operations and expansion plans.
Meanwhile, banks could have used this opportunity to strengthen their climate commitments, put guardrails in place to stop enabling fossil fuel expansion, and mobilize greater financing for the clean energy transition. Tragically, most of the big banks passed up this opportunity in favor of another year of stalling and inaction on climate.
And it’s not just about the financing numbers. This past year saw a troubling trend of the major US banks walking back their already weak climate targets and policies they had committed to just a few years before. Bank of America became the first and only major US bank to reverse course on earlier commitments not to finance drilling projects in the Arctic or new coal projects. They are now the only US bank without any financing restrictions whatsoever for the most dangerous fossil fuels.
Also last year, JPMorgan Chase scrapped its original target for reducing emissions in the oil and gas sector in favor of a new target combining all of its energy financing. Chase insists this is a more transparent target, but advocacy groups have voiced concerns about the difficulty of tracking and comparing the bank’s target across the sector.
Meanwhile, the four biggest Wall Street banks – JPMorgan, Citi, Bank of America, and Wells Fargo – walked away from the Equator Principles, which set minimum standards on risks to the environment and local communities in countries where they finance oil, gas, coal, infrastructure, and mining projects.
The pressure that our movement is placing on these banks is crucial to ensuring action toward climate commitments and an end to fossil fuel funding. The science is clear: every single dollar spent on fossil fuel industry expansion locks us into decades of climate chaos. We know there is little time to waste before climate chaos becomes irreversible. We must act now.
Read the full Banking on Climate Chaos 2024 report: bankingonclimatechaos.org