The world’s biggest banks have carried out $7 trillion in business related to fossil fuels since the signing of the Paris Climate Agreement — with almost half of that going towards expansion in the sector.
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In 2023 alone, the world’s 60 biggest banks committed a total of $705.8 billion to companies conducting business in fossil fuels, according to the latest Banking on Climate Chaos report published by the Rainforest Action Network (RAN). The researchers behind the report analyzed the banks’ underwriting and lending to more than 4,200 fossil fuel firms.
The Paris Agreement, a legally binding international treaty on climate change signed by 196 participating countries, went into effect in November 2016 with the aim of limiting the rate of global warming. Although the private sector isn’t bound by the accord, several companies have partnered with national governments to support the agreement’s objectives.
This comes as Environmental, Social and Governance (ESG) practices at big banks have become an increasingly controversial issue, with many companies shying away from outwardly marketing them. In March, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo withdrew from the Equator Principles, a group established in 2003 that provided guidance and minimum standards on environmental and social risks in infrastructure and industrial project financing. While bank representatives said they would continue to incorporate the principles into their practices, one nonprofit climate finance director called the move “very troubling.”
These were the largest U.S.-based financial contributors to the fossil fuel industry last year, according to the report:
🏦 The largest financier of fossil fuels last year was JPMorgan Chase, which increased its financing to $40.8 billion from $38.7 billion a year earlier.
🇺🇸 Bank of America came in second with $33.68 billion in financing commitments to the sector in 2023, down from $37.31 billion a year earlier.
🐎 Wells Fargo was third on the list, having committed $30.38 billion to fossil fuels-related businesses, a pullback from $37.61 billion one year prior.
🏙️ Citigroup provided $30.27 billion in financing to the industry. This contribution fell roughly 18% from $37.12 billion in 2022.
💰 Morgan Stanley rounded out the top five U.S. fossil fuel financiers, and the top 12 globally, with $19.1 billion in fossil fuel-linked financing. That’s almost a 30% increase from the $14.74 it financed in 2022.
The six largest U.S. banks — JPMorgan, Wells Fargo, Bank of America, Goldman Sachs, Citi, and Morgan Stanley — were also the top financiers of fracked gas activities.
“As one of the world’s largest financiers to both traditional and clean energy companies, we help power today’s global economy,” a JPMorgan Chase spokesperson told Quartz. “We believe our data reflects our activities more comprehensively and accurately than estimates by third parties. Reflecting our strategy of supporting the build-out of zero-carbon power, we set a net-zero aligned Energy Mix target and will disclose a clean energy supply financing ratio.”
“We are supporting clients across the energy sector, to help drive the innovation taking place in both traditional energy and the clean energy sectors,” a BofA spokesperson said. “BloombergNEF data shows that Bank of America has the highest clean energy supply financing ratio among US peers. We are engaged with clients across the energy spectrum to help them with their energy transition goals.”
Wells Fargo declined to comment. The other U.S. banks did not immediately respond to Quartz’s request for comment.
Japanese bank Mizuho came in second overall, with $37 billion in commitments to fossil fuels, up from $35.4 billion in 2022.
Among the European banks, RAN found that Barclays contributed $24.22 billion to the fossil fuel sector, up from $21.63 billion in 2022. This makes it the largest European financier to the industry. The London-based bank said it is targeting its capital to clients that are “actively engaged in the energy transition” in a response to the report published Monday. Barclays also underscored that its financed emissions within the energy and power sectors have declined by 44% and 26%, respectively, between 2020 and 2023.
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