Financing fossil fuel expansion in a climate crisis
Banks, globally, have provided $2.7 trillion in financing for fossil fuels since the 2015 Paris Agreement, according to the most recent Banking on Climate Change report.
The report – published annually by Rainforest Action Network, BankTrack, Indigenous Environmental Network, Sierra Club, Oil Change International, and Reclaim Finance – found that banking for fossil fuels had risen to $736 billion in 2019 alone.
In the report’s own words: “The private banking sector as a whole continues to take a position of extreme irresponsibility in the face of the climate crisis.”
What does the report cover? The report looks at 35 private-sector banks and their lending and underwriting of debt and equity issuances to major fossil fuel companies since 2016. It examines:
- Financing for the most damaging fossil fuels – coal, tar sands, Arctic oil and gas, offshore oil and gas, fracked oil and gas, and liquified natural gas (LNG).
- Financing for the top 100 companies involved in fossil fuel expansion, through new extraction or infrastructure.
- Companies’ policies across these areas, scoring them out of 200.
Banks backsliding: increasing finance in fossil fuels
Overall fossil financing has increased by 15% since 2016 and many of the banks have increased their individual financing in the last year.
Finance for fracking, arctic oil and gas, and offshore oil and gas, continued to grow for the third year running. Finance for tar sands and LNG had also increased since 2018.
'Bright spots': A fall in coal mining
The report found that “the only somewhat bright spots in terms of declining finance are in coal mining and power”. Finance for the top 30 coal mining companies had declined by 6% between 2016 and 2019, and finance to the top 30 coal power companies shrank by 13%.
However, it also said that while coal finance was slowly shrinking, the trend was being more than compensated for by growth in finance for the oil and gas industry. NatWest Group was identified as one bank making progress.
It was said to have slashed its fossil fuel financing in 2019 and significantly strengthened its policies in February 2020.