Major banks keep pouring billions into coal and oil
Environment — di Valentina Neri
More than 2,500 billion euros: that is the money major banks have injected into the fossil fuel sector from the signing of the Paris Agreement to 2019.
Major banks keep pouring billions into coal and oil
More than 2,500 billion euros: that is the money major banks have injected into the fossil fuel sector from the signing of the Paris Agreement to 2019.
"Today the world is united in the fight against climate change. Today the world has a lifeline, a last chance to hand future generations a more stable world, a healthier planet, fairer societies and more prosperous economies." It was 12 December 2015 and the then president of the European Commission Jean-Claude Juncker greeted the signing of the Paris Agreement on climate with these words. Four and a half years on, however, the facts tell a very different story. The flow of money towards fossil fuels, rather than diminishing, is reaching new heights: 35 major banks have invested more than 2,500 billion euros from 2016 to 2019. This staggering figure comes from the 2020 edition of the Banking on climate change report, produced by Rainforest action network, Banktrack, Indigenous environmental network, Oil change international, Honor the earth and Sierra club.
900 billion euros for new extraction projects
In 2016, environmentalists had breathed a sigh of relief upon noticing that, for the first time, financing for fossil fuels had recorded a 22 per cent drop year on year. But the influence of the Paris Agreement evidently proved only momentary. In 2017 investment began to climb again, before breaking through the barrier of 1,700 billion euros over the 2016–2018 period. Another year passed and the total reached 2,500 billion, distributed among 2,100 companies operating in the coal, natural gas and oil sector. Flying in the face of every promise of a greener future, no fewer than 900 billion euros were directed towards new extraction projects and their associated infrastructure, with a +40 per cent increase between 2018 and 2019.
US banks get a failing grade
The most fossil-fuel-friendly banks are without doubt the American ones. Thirty per cent of total financing comes from a select club comprising JPMorgan Chase, Wells Fargo, Citi and Bank of America. Topping the rankings is JPMorgan Chase, which approaches 250 billion euros and is the single largest investor in new extraction projects, in fracking (the hydraulic fracturing of shale rock to extract oil and natural gas), and in offshore and Arctic drilling. It is also the only non-Canadian financial institution to appear in the top five funders of tar sands, a sector so controversial that it has been abandoned by numerous European banks.
The institutions of the Old Continent are on average more virtuous than the rest, though there is still room for improvement. Under particular scrutiny is Barclays, which between 2016 and 2019 allocated around 110 billion euros to fossil fuels. Bnp Paribas has been a pioneer in halting financing for unconventional gas and oil, yet still disbursed 78 billion euros for fossil fuels; a similar case applies to its compatriot Crédit Agricole, very strict on coal but generous when it comes to new extraction projects. Good news, however, from Rbs, which in 2019 made a sharp cut to financing for the "dirtiest" energy sources and put further restrictions in place in February 2020. The colossal European green deal, through which the Commission promises to mobilise one thousand billion euros over ten years, will require even more incisive policies to be adopted.