Banks continue to funnel billions into polluting energy projects

Photographer: Carina Johansen / Bloomberg

Almost five years after countries signed the historic Paris Agreement on climate change, financial institutions continue to provide billions of dollars to companies that extract and burn the most polluting resources on the planet.

Since early 2016, banks have provided more than $ 1.6 trillion in loans and underwriting services to fossil fuel companies that plan and develop oil, gas and coal projects, according to a joint report of 18 climate organizations released Thursday. . The top three, Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., lent and underwritten a total of $ 295 billion.

The findings are based on banks and investors linked to companies involved in 12 energy projects, thus underestimating the global scale of fossil fuel financing. The total amount is closer to $ 3.7 trillion when all types of corporate issuers are included, data compiled by Bloomberg shows.

Together, the 12 projects highlighted in the report have the potential to produce at least 175 gigatons of additional CO2 emissions, according to the report, which was coordinated by the German climate group Urgewald. That’s almost 75% of the remaining carbon budget, which is required to limit global warming to 1.5 degrees Celsius, according to researchers at Climate Analytics.

“Instead of taking a rigorous approach that would prevent the expansion of fossil fuels and facilitate their elimination, global banks refuse to break the fatal growth trend of fossil mining,” said Lucie Pinson, CEO of Reclaim Finance. , a district of Paris. grassroots advocacy group that contributed to the report.

US banks led the financing of national projects such as oil drilling and fracking in the Permian Basin, which covers parts of Texas and New Mexico. Bank of America loaned more than $ 54 billion to companies involved in the basin over the past five years, the research shows. In China, the Industrial and Commercial Bank of China has invested more than $ 14 billion in the country’s coal industry.

Fossil fuels are also receiving interest from fund managers. In August, Vanguard Group owned more than $ 65 billion in stocks and bonds of companies linked to projects in the Permian Basin. BlackRock Inc., the world’s largest asset manager, had about $ 110 billion in bonds and stocks of companies involved in the projects featured in the report. In January, BlackRock It said it would reduce its exposure to thermal coal as part of CEO Larry Fink’s sustainability strategy.

Public bodies are not perfect either. The World Bank Group has provided more than $ 12 billion in loans, guarantees, equity investments and technical assistance to fossil fuel projects since the Paris agreement, according to the report. For example, the World Bank is providing $ 80 million in Mozambique for technical assistance to help develop oil and gas fields, including funds that went to a law firm acting on behalf of Exxon Mobil Corp. in 2018.

“In 2020 we began to see the first major banks come out with commitments to reduce their total financed emissions to zero by 2050,” said Paddy McCully, director of climate and energy for the Rainforest Action Network, who helped write the report. “But this will mean little if we don’t start to see banks turn away right now from these fossil fuel expansion megaprojects that can block decades of emissions.”