Global banking giants, led by American and Japanese institutions, lent over $700 billion to fossil fuels last year, asserts a consortium of NGOs on Monday, although this figure has declined, particularly among French banks.
“Urgently, banks must cease financing the expansion of oil and gas and prioritize funding for sustainable electricity production,” commented Lucie Pinson, founder and director of Reclaim Finance, as quoted in a press release.
Since the signing of the 2015 Paris Climate Agreement, which aims to limit global warming to 1.5°C above pre-industrial levels (1850-1900), nearly $6.896 trillion in loans, equity issuances, or bonds have gone to oil, gas, and coal companies, according to the latest edition of the “Banking on Climate Chaos” report.
60 banks allocated $705.8 billion to these various forms of financial support last year, a decrease of 9.5% year-on-year on a comparable basis.
American institution JPMorgan takes the top spot as the largest financial supporter of fossil fuels, with nearly $41 billion last year (+5.4%), ahead of Japanese banks Mizuho and MUFG, according to data compiled by eight NGOs, including Rainforest Action Network, Reclaim Finance, and Urgewald.
“As the world’s largest financier of both traditional and decarbonized energy companies, we support today’s global economy. We believe our data reflects our activities more comprehensively and accurately than third-party estimates. To reflect our strategy of supporting the transition to zero-carbon energy (…) we will publish a clean energy financing ratio,” a spokesperson for JPMorgan Chase told AFP on Monday.
The figures also show a gradual withdrawal from major French banks since 2020.
In 2023, “one of the notable developments is the reduction in financing by French banks to these companies,” notes Reclaim Finance, which is more accustomed to giving out bad marks.
The contribution of the six major French banks (BNP Paribas, Crédit Agricole, Société Générale, and BPCE primarily, with Crédit Mutuel and La Banque postale accounting for a tiny portion) was approximately $40 billion last year, according to the study, around $10 billion less than in 2022 and 5.6% of the total.
BNP Paribas, in its upcoming 2024 Climate Report to be released on Monday, sets “a target to reduce its financed emissions by 70% in absolute value for the oil and gas sector” by 2030, compared to 2022, according to a spokesperson.