Despite increasing pressure to defund oil and gas firms in support of international decarbonisation efforts, major banks are continuing to provide financing to fossil fuel companies. A recent report from the U.S. organization Rainforest Action Network (RAN) and partners revealed that the 60 largest private banks in the world provided $6.8 trillion in funding to fossil fuels, with $3.3 trillion going towards expansion over the past eight years.
The report highlighted that in 2023, despite pledges from many major banks to reduce or end funding to oil and gas companies as part of the Net Zero Banking Alliance, financing for fossil fuel companies reached $705 billion, with $347 billion allocated for expansion. JPMorgan Chase was identified as the biggest financier for fossil fuels, contributing $40.8 billion in funding to fossil fuel companies in 2023.
Critics of the report raised concerns about the lack of evidence showing where the funding went in the fossil fuel sector, with some banks claiming their financing mainly supported green transition efforts by energy companies. However, activists emphasized the need for greater transparency to hold banks accountable for their contributions to fossil fuel activities.
Despite growing pressure to decarbonize operations, banks like Barclays and Bank of America continue to fund fossil fuel projects. While Barclays announced plans to stop directly financing new oil and gas projects, environmentalists push for more significant commitments to support a green transition.
As the world grapples with the urgent need to transition away from fossil fuels, the role of major banks in financing the industry remains a contentious issue. Greater transparency and accountability from banks could help drive the shift towards a more sustainable energy future.
