Skip to main content

Just 7% of global banks' energy financing goes to renewables, new data shows

By BankTrack 

Major global banks are standing in the way of climate targets with new data showing just 7% of their financing for energy companies went to renewables between 2016 and 2022.
The data, produced for Sierra Club, Fair Finance International, BankTrack and Rainforest Action Network, indicates major failings by financial institutions to help meet global commitments on net zero emissions by 2050 since it shows shockingly low financial support through loans and bond underwriting for clean energy. It calls into question pledges from the industry-led Glasgow Financial Alliance for Net Zero (GFANZ), whose commissioned research shows low carbon energy investments need to account for at least 80% of energy investments compared to fossil fuels (4:1) by 2030 to reach climate goals.
However, no bank looks set to reach this very minimum requirement. Across the world, the picture is dismal: at $181 billion Citi and JP Morgan Chase each pumped the most into the energy companies examined between 2016 and 2022 but just 2% went to renewables. Similarly, only 2% of Barclays’ financing of the energy companies examined went to renewables. Royal Bank of Canada is at just 1%, Mizuho 4% and HSBC 5%. The figure stands at 7% for French bank BNP Paribas.
Bank loans and bond underwriting for renewables went from 7% in 2016 of the overall financing of the energy companies examined to a high of 10% in 2021 but virtually stagnated between these years, rather than showing any positive trend. The total amounts of clean energy financing in these years remained abysmally low: $23.2 billion in 2016 and $34.5 billion in 2021.
Overall the 60 banks saw $2.5 trillion in loans and bond underwriting provided to the companies examined for energy activities between January 2016 and July 2022. Of that, $2.3 trillion was related to the production of fossil fuel energy and just $178 billion was related to clean energy activities such as wind and solar.
Surprisingly, the data reveals that banks that are members of GFANZ actually provide less financing for renewable energy, on average, than their counterparts that are not in the alliance. Leaders of the industry-led group, which is committed to accelerating the energy transition by the finance sector, are vocal about the need for funding for low-carbon energy to quadruple that of dirtier energy like coal, oil, and gas, by the end of this decade.
When asked this week whether Citi had ever refused to fund new fossil fuel projects, CEO Jane Fraser responded during a session at the World Economic Forum in Davos: “We need to have energy security and we need to be operating on cleaner technologies and the two, as we are seeing right now, cannot be mutually exclusive.” But today's data demonstrably proves that Citi is prioritising fossil fuel proliferation and status quo relationships over the very clean technologies that she recognises we need.
Climate finance groups have criticised banks over the data and questioned the climate commitments many have made.
Maaike Beenes, campaign lead at BankTrack said:
“Given that GFANZ co-chair Mark Carney has publicly recognised the need to rapidly increase the ratio of green financing to at least 4 times that of fossil fuel financing, it is alarming that GFANZ members have in fact financed less green energy than those outside the alliance. To stop the climate crisis from further unfolding, banks must stop dragging their feet and start shifting their financing away from fossil fuels towards green energy.”
Adele Shraiman, campaign representative with the Sierra Club’s Fossil-Free Finance campaign said:
“Many banks claim that they continue to provide financing for fossil fuel clients in order to help those clients in their climate transition. This data calls into question that claim, and gives proof that banks must get serious about financing the clean energy transition. In order to reach the goals of the Paris Agreement, we know that investments in renewable energy must dramatically increase this decade. Banks must take bigger strides to scale up their financing for renewable energy and phase out their financing for fossil fuels — and fast.”
April Merleaux, research manager at Rainforest Action Network said:
"Financial institutions love to speak about their purported climate leadership, but the data speaks louder: Banks are seizing the windfall profits from fossil fuel expansion and shorting the investments we need in clean energy development. To avert climate disaster, financial institutions need to take every measure to align their financing activities with science-based targets, not wishful thinking and false solutions."
Kees Kodde, project lead at Fair Finance International said:
“Banks will continue to exacerbate the climate crisis unless regulators and governments intervene. Banks need to be forced to align their portfolios with 1.5 degrees and commit to a just energy transition that takes into account the interests of workers and affected communities.”
Rémi Hermant, policy analyst at Reclaim Finance said:
“Scaling up financing to clean energy and phasing out support for fossil fuels are the two sides of the climate equation. Yet, numbers once again don't lie and banks are dramatically failing on both. With all doubts allowed on the sincerity of their net-zero pledges, it's high time for banks to stop supporting fossil fuel expansion and commit to massive 2025 and 2030 clean financing targets."

Comments

TRENDING

Andhra team joins Gandhians to protest against 'bulldozer action' in Varanasi

By Rosamma Thomas*  November 1 marked the 52nd day of the 100-day relay fast at the satyagraha site of Rajghat in Varanasi, seeking the restoration of the 12 acres of land to the Sarva Seva Sangh, the Gandhian organization that was evicted from the banks of the river. Twelve buildings were demolished as the site was abruptly taken over by the government after “bulldozer” action in August 2023, even as the matter was pending in court.  

Right-arm fast bowler who helped West Indies shape arguably greatest Test team in cricket history

By Harsh Thakor*  Malcolm Marshall redefined what it meant to be a right-arm fast bowler, challenging the traditional laws of biomechanics with his unique skill. As we remember his 25th death anniversary on November 4th, we reflect on the legacy he left behind after his untimely death from colon cancer. For a significant part of his career, Marshall was considered one of the fastest and most formidable bowlers in the world, helping to shape the West Indies into arguably the greatest Test team in cricket history.

Tributes paid to pioneer of Naxalism in Punjab, who 'dodged' police for 60 yrs

By Harsh Thakor*  Jagjit Singh Sohal, known as Comrade Sharma, a pioneer of Naxalism in Punjab, passed away on October 20 at the age of 96. Committed to the Naxalite cause and a prominent Maoist leader, Sohal, who succeeded Charu Majumdar, played hide and seek with the police for almost six decades. He was cremated in Patiala.

Campaign group urges INDIA alliance to release Jharkhand manifesto to counter BJP’s 'divisive' agenda

By Our Representative  The Loktantra Bachao Abhiyan, an advocacy group, has issued a press release urging the INDIA alliance to release a Jharkhand-specific manifesto to counter the BJP’s "divisive" electoral agenda. With just two weeks remaining before the assembly elections, the INDIA coalition has yet to announce its plans and priorities for the state. Meanwhile, the BJP's campaign, according to the press release, is centered around communalism, divisiveness, and distraction from Jharkhand's core issues.

Israel's 'war crime': 18,000 children died not just from bomb explosions but also starvation

By Sandeep Pandey*  Last year 6 years old Madiha was a guest during Diwali at our home in Lucknow. Listening to the sound of fire crackers bursting outside she remarked, ‘It appears as if we’re in Gaza.’ She has probably no idea of the extent of damage and loss of life that has taken place in Palestine but can relate to sound of crackers as bombs exploding over Gaza.

United organisations oppose privatisation of health services in Madhya Pradesh

By Our Representative  In a strong show of opposition, multiple health associations under the umbrella of the United Organisations for Action against Privatisation of Health Services have condemned the Government of Madhya Pradesh’s recent moves towards privatising public health facilities. They argue that these actions, including outsourcing and the Public-Private Partnership (PPP) model, will compromise the availability and accessibility of essential health services for the state’s citizens.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah  The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Will Left victory in Sri Lanka deliver economic sovereignty plan, go beyond 'tired' IMF agenda?

By Atul Chandra, Vijay Prashad*  On September 22, 2024, the Sri Lankan election authority announced that Anura Kumara Dissanayake of the Janatha Vimukthi Peramuna (JVP)-led National People’s Power (NPP) alliance won the presidential election. Dissanayake, who has been the leader of the left-wing JVP since 2014, defeated 37 other candidates, including the incumbent president Ranil Wickremesinghe of the United National Party (UNP) and his closest challenger Sajith Premadasa of the Samagi Jana Balawegaya.