The Banking on Climate Change report released in March this year has calculated the lending and underwriting from 33 global banks to the fossil fuel industry. The report found that Canadian, Chinese, European, Japanese, and U.S. banks have provided the fossil fuel industry with $1.9 trillion since the Paris Agreement was adopted. In the last 3 years, banks have supported these companies with $600 billion, and the finance continues to rise yearly.
The top fossil fuel funding banks are as follows:
- JPMorgan Chase in America
- The world’s biggest banker of fossil fuels, by a wide margin
- Royal Bank of Canada in Canada
- Leads Canada in banking fossil fuels ($101 B)
- World’s top banker of tar sands ($14 B)
- Barclays in Europe
- Leads Europe in banking fossil fuels ($85 B) and fossil fuel expansion ($24 B)
- Top European banker of fracking and coal power
- MUFG in Japan
- Leads Japan in banking fossil fuels ($80 B) and fossil fuel expansion ($25 B)
- Bank of China in China
- $17 B to fossil fuel expansion
- World’s top banker of coal power ($16 B)
Existing fossil fuel extraction projects already have enough carbon to push the world beyond the agreed climate limits and with the continuation of their removal, the human rights abuses frequently linked with these industries carries on.
Policies and Practices
The report also looks at the banks policies and practices around financing in certain key fossil fuel sub-sectors, these include:
Tar sands oil
RBC, TD, and JPMorgan Chase are the biggest bankers of 30 top tar sand producers, and four key tar sands pipeline companies. Financing for this area fell sharply in 2018, Barclays financing fell by 94% and HSBC’s by 87%. BNP Paribas, BPCE/Natixis, and ING have the strongest tar sands policies. Natixis, RBS, and HSBC all came out with strengthened tar sands restrictions over the past year.
Arctic oil and gas
JPMorgan Chase is the world’s biggest banker of Arctic oil and gas, followed by Deutsche Bank and SMBC Group. Unfortunately, financing increased from 2017 to 2018.
Ultra-deepwater oil and gas
None of the 33 banks have policies to proactively restrict financing for ultra-deepwater extraction, with JPMorgan Chase, Citi, and Bank of America being the top financiers.
Fracked oil and gas
Over the last 3 years, financing for fracking has been on the rise over. Wells Fargo and JPMorgan Chase are the biggest bankers of key companies that are active in America’s most prolific oil basin, the Permian Basin.
Liquefied natural gas (LNG)
Banks have financed top companies building LNG import and export terminals around the world with $46 billion since the Paris Agreement, which is led by JPMorgan Chase, Société Générale, and SMBC Group.
Coal mining finance is dominated by the four major Chinese banks, led by China Construction Bank and Bank of China. Though many European and U.S. banks have policies in place restricting financing for coal mining, total financing has only fallen by three to five percent each year.
Coal power financing is also led by the Chinese banks, Bank of China and ICBC in particular, with Citi and MUFG as the top non-Chinese bankers of coal power. Many European banks have policies in place restricting financing for coal power companies.
What Must Banks Do
- Align fossil fuel policies and practices with the most prudent emissions pathway detailed in the IPCC special report, which calls for emissions to be effectively reduced to zero by 2050.
- Prohibit all financing for all fossil fuel expansion projects and for companies expanding fossil fuel extraction and infrastructure.
- Prohibit all financing for all projects in tar sands oil, Arctic oil and gas, ultra-deepwater oil and gas, fracked oil and gas, and liquefied natural gas, and all companies with operations or expansion plans in these sub-sectors.
- Prohibit all financing for all projects in coal mining or coal power, and all companies with operations or expansion plans in these sub-sectors.
- Fully respect all human rights, particularly the rights of Indigenous peoples, including their rights to their water and lands and the right to free, prior and informed consent, as articulated in the UN Declaration on the Rights of Indigenous Peoples.
- Prohibit all financing for projects and companies that abuse human rights, including Indigenous rights.
What Can We Do?
Write to your bank
Switch current accounts but make sure you let your bank know, and ask them begin divestment from fossil fuels. If you just change without letting them know, they might think it is because of poor service, or that you’ve been tempted by another bank’s offer.
Moving your accounts and/or savings from banks that support fossil fuels to those that are aiming to build a more sustainable global economy can have a much bigger and far more positive impact.
- Triodos Bank only finance companies that focus on people, the environment or culture.
- Charity Bank only lends to charities, social enterprises and other organisations where the loan is being used for a social purpose.
- Co-operative Bank is the only one to offer a mainstream current account. The Co-op is still the only major bank committed to fighting climate change.
- Ecological Building Society is dedicated to improving the environment by supporting and promoting ecological building practices and sustainable communities.