Fossil fuels receiving over 9 times more finance than renewable energy from world’s top banks

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The world’s 25 largest private sector banks channelled at least USD 931 billion into fossil fuel companies in the period 2009-2014, according to a new report launched today by Fair Finance Guide and BankTrack, while over the same period the banks’ financing of renewable energy totalled USD 98 billion.

Undermining our future
Alexandre Naulot, spokesperson at Fair Finance Guide International, said: “This analysis, the first international study to compare private sector bank financing of fossil fuels and renewable energy, identifies the alarming priority that banks have been giving to dirty energy over clean energy since 2009, the year of the Copenhagen climate summit. Up to the end of 2014, for every dollar the banks have channelled into renewable energy, they’ve provided more than USD 9 in fossil fuels. Now, more than ever, we need to start seeing some firm commitments from the banks to quickly stop this business as usual.”

The new Fair Finance Guide and BankTrack report, ‘Undermining our Future’, analyses 75 financial institutions in total and is published less than a month before the beginning of the United Nations Climate Summit in Paris (COP21). The energy sector investment figures detailed in the report are based on publicly available information, though due to a lack of full transparency across the institutions the figures should be taken as minimum amounts. [2]

Also revealed by the report, three US banks Citi, JPMorgan Chase and Bank of America are the largest fossil banks. Between 2009 and 2014, Citi and JPMorgan Chase each provided over USD 76 billion to fossil fuel companies and only USD 6.5 billion and USD 4.4 billion respectively to renewable energy. Bank of America provided USD 62.7 billion to fossil fuel companies, and only USD 5.4 billion to renewable energy.

Of the broader ‘top ten’ institutions, including well-known French, German, UK and Japanese banks, individual renewable energy investment totals nowhere exceeded USD 7.5 billion for the period 2009-2014. These figures, dwarfed by the corresponding fossil fuel financing totals, contrast with these banks’ regular statements on their desire to play a role in combating climate change.

We need ambitious action
Alexandre Naulot said: “Banks play a pivotal role in the economy and have a responsibility to promote a less carbon intensive world. We certainly hear enough from them about their green finance aspirations, but they lack clear commitments. Clear and ambitious climate commitments from the banks and governments will be crucial at the Paris summit.”

As noted by the report, many of the researched financial institutions do not have climate change mitigation policies or commitments in place.

Yann Louvel, climate and energy coordinator for BankTrack, said: “We need ambitious action from the banks now. The likes of Crédit Agricole and Natixis in France and Bank of America and Citi have made positive moves in recent months to restrict their support to the coal industry. Yet no major international bank has so far done the Paris Pledge, and committed before COP21 in Paris to a full phase out of coal financing. This is the kind of practical commitment we need to see happening, to bring an end to the fossil fuel favouritism and the strangulation of the banks’ financing in renewable energy.” [3]

Alexander Naulot said: “Governments also need to act. We need them to adopt strong legislations that will mobilise the financial sector towards a low carbon economy and that will encourage the banks and financial institutions to phase out of fossil fuels, starting with coal.”

Read here the full report.

Notes to Editors

Please note: The original version of this article is published here.

1. The full methodology can be found in the report
2. The Paris Pledge campaign is aimed at ending the multi-billion dollar coal financing of the world’s private banks, and is currently backed by 12 ethical banks, leaders of the fossil fuel divestment movement including 350.org and its founder Bill McKibben, as well over 150 other global groups and more than 10,000 individuals. See: http://dotheparispledge.org/