How Green is your Bank?

Despite dire warnings from climate experts, several global financial giants, such as RBC, JPMorgan Chase, Citi, Bank of America, Scotiabank, MUFG, and Mizuhos, persist in funneling billions into expanding fossil fuel enterprises.

According to Banking Tracks' Fossil Fuel Finance Report (2023), over the past seven years since the inception of The Paris Agreement, the top 60 banks collectively financed an alarming $5.5 trillion in fossil fuels. In the year 2022 alone, investments soared to $673 billion towards fossil fuel initiatives.

Despite their extensive proclamations of aiming for net zero emissions and setting 2030 targets, significant gaps and inconsistencies in these commitments persisted throughout 2022.

The Top 5 Fossil Fuel Funding Banks

1. JPMorgan Chase

   • Overall financing: $434 Billion since the Paris Agreement
   • 2022 Fossil Fuel Expansion: $11B
   • 2016-2022 Arctic Oil & Gas financing: $5B

2. CITI

   • Total financing: $332 Billion since the Paris Agreement
   • 2022 Fossil Fuel Expansion: $10B
   • 2016-2022 Offshore Oil & Gas financing: $40B

3. Wells Fargo

   • Total financing: $318 Billion since the Paris Agreement
   • 2022 Fracked Oil & Gas financing: $4B
   • 2016-2022 Fracked Oil & Gas financing: $80B

4. Bank of America

   • Total financing: $281.230 Billion since the Paris Agreement
   • 2022 Amazon Oil & Gas financing: $1B
   • 2016-2022 Liquefied Natural Gas financing: $7B

5. Royal Bank of Canada

   • 2022 fossil fuel financing: $42 Billion, totaling $254 billion since the Paris Agreement
   • 2022 Fracked Oil & Gas financing: $7B
   • Tar Sands Oil financing since the Paris Agreement: $4B

Existing fossil fuel extraction projects already contribute significantly to surpassing the agreed climate limits. Their continuation perpetuates human rights abuses frequently associated with these industries.

Policies and Practices

Tar Sands Oil

In 2022, the top tar sands companies received $21 billion in financing, primarily from major Canadian banks such as TD, RBC, and Bank of Montreal, accounting for 89% of these funds.

Arctic Oil and Gas

ConocoPhillips received financing from multiple banks in 2022, including Bank of America, Citi, Credit Suisse, HSBC, JPMorgan Chase, Mizuho, MUFG, SMBC Group, TD, and Wells Fargo. However, this financing was not project-specific and thus not subject to most banks’ Arctic exclusion policies.

Amazon Oil and Gas

A 2021 investigation by the Stand Research Group highlighted JPMorgan Chase's high risk of complicity in Amazon forest destruction due to weak environmental and social policies, as well as significant financing for companies operating in the biome.

Offshore Oil and Gas

In 2022, European banks such as BNP Paribas, Crédit Agricole, along with the Japanese bank SMBC Group, were the primary financiers of offshore oil and gas. The total financing for this sector amounted to $34 billion in 2022.

Fracked Oil and Gas

Financing for the top 30 fracking companies reached $67 billion in 2022, indicating an 8% increase compared to 2021. This surge is concerning due to the extreme methane emissions associated with fracking. Notably, RBC and JPMorgan Chase emerged as the leading financiers of fracked oil and gas in 2022.

Liquefied Natural Gas (LNG)

Major financiers of liquefied "natural" gas (LNG) in 2022 included Mizuho, Morgan Stanley, JPMorgan Chase, ING, Citi, Goldman Sachs, and SMBC Group. The overall finance for the top 30 LNG companies surged by nearly 50%, from $15.2 billion in 2021 to $23 billion in 2022. Each project reaching a final investment decision in 2022 contributes to the overshoot of the IEA’s Net Zero by 2050 scenario.

Coal Mining

Of the $13 billion in financing directed to the world’s 30 largest coal mining companies, 87% came from banks in China, with China CITIC Bank, China Everbright Bank, and Industrial Bank leading the financing. Although financing to coal companies has decreased since 2016, Canadian and United States banks marginally increased their funding between 2021 and 2022.

Coal Power

Financing for the world’s top 30 companies in coal power saw 97% of funding coming from Chinese banks in 2022. These companies, aiming to expand coal power capacity, received $29 billion from the profiled banks. Interestingly, only 20 banks participated in coal power financing in 2022, down from 29 in 2021.

Actions for Banks

• Align Policies: Align fossil fuel policies with the IPCC's recommended emissions pathway, aiming for zero emissions by 2050.
• Prohibit Financing: Restrict funding for all fossil fuel expansion projects and companies involved in fossil fuel extraction or infrastructure expansion.
• Restrict Sub-sectors: Prohibit funding for projects in tar sands oil, Arctic oil and gas, ultra-deepwater oil and gas, fracked oil and gas, LNG, and companies operating in these sub-sectors.
• Coal Restrictions: Prohibit funding for coal mining and coal power projects and associated companies.
• Respect Human Rights: Ensure full respect for human rights, especially Indigenous rights, including their land, water, and the right to free, prior, and informed consent as outlined in the UN Declaration on the Rights of Indigenous Peoples.
• Human Rights Abuse: Refrain from financing projects or companies involved in human rights abuses, particularly those affecting Indigenous rights.

How You Can Help

Engage with Your Bank
Consider shifting your current accounts, but make it clear to your bank that it’s due to their fossil fuel investments. This can prompt them to divest from these unsustainable ventures.

Transition to Ethical Providers
Move your accounts and savings from banks supporting fossil fuels to those fostering a sustainable global economy. Here are some options:

• Triodos Bank focuses on financing companies dedicated to people, the environment, or culture.
• Charity Bank lends solely to charities, social enterprises, and organizations pursuing social causes.
• Co-operative Bank offers mainstream current accounts and is a major advocate against climate change.
• Ecological Building Society supports ecological building practices and sustainable communities.