Skip to main content

Just 7% of global banks' energy financing goes to renewables, new data shows

By BankTrack 

Major global banks are standing in the way of climate targets with new data showing just 7% of their financing for energy companies went to renewables between 2016 and 2022.
The data, produced for Sierra Club, Fair Finance International, BankTrack and Rainforest Action Network, indicates major failings by financial institutions to help meet global commitments on net zero emissions by 2050 since it shows shockingly low financial support through loans and bond underwriting for clean energy. It calls into question pledges from the industry-led Glasgow Financial Alliance for Net Zero (GFANZ), whose commissioned research shows low carbon energy investments need to account for at least 80% of energy investments compared to fossil fuels (4:1) by 2030 to reach climate goals.
However, no bank looks set to reach this very minimum requirement. Across the world, the picture is dismal: at $181 billion Citi and JP Morgan Chase each pumped the most into the energy companies examined between 2016 and 2022 but just 2% went to renewables. Similarly, only 2% of Barclays’ financing of the energy companies examined went to renewables. Royal Bank of Canada is at just 1%, Mizuho 4% and HSBC 5%. The figure stands at 7% for French bank BNP Paribas.
Bank loans and bond underwriting for renewables went from 7% in 2016 of the overall financing of the energy companies examined to a high of 10% in 2021 but virtually stagnated between these years, rather than showing any positive trend. The total amounts of clean energy financing in these years remained abysmally low: $23.2 billion in 2016 and $34.5 billion in 2021.
Overall the 60 banks saw $2.5 trillion in loans and bond underwriting provided to the companies examined for energy activities between January 2016 and July 2022. Of that, $2.3 trillion was related to the production of fossil fuel energy and just $178 billion was related to clean energy activities such as wind and solar.
Surprisingly, the data reveals that banks that are members of GFANZ actually provide less financing for renewable energy, on average, than their counterparts that are not in the alliance. Leaders of the industry-led group, which is committed to accelerating the energy transition by the finance sector, are vocal about the need for funding for low-carbon energy to quadruple that of dirtier energy like coal, oil, and gas, by the end of this decade.
When asked this week whether Citi had ever refused to fund new fossil fuel projects, CEO Jane Fraser responded during a session at the World Economic Forum in Davos: “We need to have energy security and we need to be operating on cleaner technologies and the two, as we are seeing right now, cannot be mutually exclusive.” But today's data demonstrably proves that Citi is prioritising fossil fuel proliferation and status quo relationships over the very clean technologies that she recognises we need.
Climate finance groups have criticised banks over the data and questioned the climate commitments many have made.
Maaike Beenes, campaign lead at BankTrack said:
“Given that GFANZ co-chair Mark Carney has publicly recognised the need to rapidly increase the ratio of green financing to at least 4 times that of fossil fuel financing, it is alarming that GFANZ members have in fact financed less green energy than those outside the alliance. To stop the climate crisis from further unfolding, banks must stop dragging their feet and start shifting their financing away from fossil fuels towards green energy.”
Adele Shraiman, campaign representative with the Sierra Club’s Fossil-Free Finance campaign said:
“Many banks claim that they continue to provide financing for fossil fuel clients in order to help those clients in their climate transition. This data calls into question that claim, and gives proof that banks must get serious about financing the clean energy transition. In order to reach the goals of the Paris Agreement, we know that investments in renewable energy must dramatically increase this decade. Banks must take bigger strides to scale up their financing for renewable energy and phase out their financing for fossil fuels — and fast.”
April Merleaux, research manager at Rainforest Action Network said:
"Financial institutions love to speak about their purported climate leadership, but the data speaks louder: Banks are seizing the windfall profits from fossil fuel expansion and shorting the investments we need in clean energy development. To avert climate disaster, financial institutions need to take every measure to align their financing activities with science-based targets, not wishful thinking and false solutions."
Kees Kodde, project lead at Fair Finance International said:
“Banks will continue to exacerbate the climate crisis unless regulators and governments intervene. Banks need to be forced to align their portfolios with 1.5 degrees and commit to a just energy transition that takes into account the interests of workers and affected communities.”
RĂ©mi Hermant, policy analyst at Reclaim Finance said:
“Scaling up financing to clean energy and phasing out support for fossil fuels are the two sides of the climate equation. Yet, numbers once again don't lie and banks are dramatically failing on both. With all doubts allowed on the sincerity of their net-zero pledges, it's high time for banks to stop supporting fossil fuel expansion and commit to massive 2025 and 2030 clean financing targets."

Comments

TRENDING

Abrogation of Art 370: Increasing alienation, relentless repression, simmering conflict

One year after the abrogation by the Central Government of Art. 370 in Kashmir, what is the situation in the Valley. Have the promises of peace, normalcy and development been realised? What is the current status in the Valley? Here is a detailed note by the People’s Union for Civil Liberties , “Jammu & Kashmir: One Year after Abrogation of Art. 370: Increasing Alienation, Relentless Repression, Simmering Conflict”:

Repeated failure to appoint Chief, other commissioners undermining RTI Act

By Anjali Bhardwaj, Amrita Johri* The post of the Chief Information Commissioner of the Central Information Commission (CIC) has fallen vacant with the retirement of Bimal Julka with effect from August 27, 2020. This is the fifth time in the last six years that the Commission has been rendered headless. Four posts of information commissioners are also vacant in the CIC. Currently more than 35,000 appeals and complaints are pending in the commission resulting in citizens having to wait for months, even years for their cases to be disposed, thereby frustrating peoples’ right to know. Since May 2014, not a single commissioner of the CIC has been appointed without citizens having to approach courts. The failure of the government to make timely appointments of commissioners is a flagrant violation of the directions of the Supreme Court. In its February 2019 judgment, the apex court had categorically stated that if the CIC does not have a Chief Information Commissioner or required strength

Ultimate champion in crisis, arguably best ever skipper: Created history in Aussie cricket

By Harsh Thakor  In the history of cricket few cricketers knit and propelled a cricket team or had such profound influence on the game as Ian Chappell. Ian Chappell was responsible for converting a bunch of talented individuals into a world beating side, giving a dramatic turn to Australian cricket. Few cricketers ever led such a renaissance.

BSF's unconstitutional, whimsical order violates life, livelihood of Dalits, minorities

Kirity Roy, Secretary, Banglar Manabadhikar Suraksha Mancha (MASUM), writes to the Chairman, National Human Rights Commission: *** I want to attract your attention towards the illegitimate restrictions on the life and livelihood of the villagers of Paschim Sahebganj village under Dinhata - II Block and Sahebganj police station in Cooch Behar district of West Bengal by the Border Security Force personnel attached with Dharala Border Out Post under 138 Battalion BSF. The population of Paschim Sahebganj village is around 1480, where almost 75 percent of the villagers belong from Hindu Scheduled Caste (Dalit) and 25 percent from minority Muslim backgrounds.The main occupation of the villagers is agriculture. About 260 acres of cultivable land in the village that belongs to the villagers is located outside the border fencing, which is heavily guarded by the Border Security Force (BSF). The BSF regulates the ingress and egress of the villagers to their fields through the fencing gates that a

Largest democracy in world has become weakest at hands of fascist Hindutva forces

Note on “The Nazification of India”, a report released By Justice For All: *** This report, the Nazification of India, compares how Hindutva ideology not only is inspired by Nazis and Fascists of Europe, but their treatment of the Muslim minority closely follows developments that resulted in pushing Jews to the gas chambers. Situation is indeed quite alarming. The report says that the largest democracy in the world has become the weakest at the hands of the fascist Hindutva ideology. India today is ruled not just by a political party the Bharatiya Janata Party (BJP), but its mother organization the Rashtriya Swayamsevak Sangh (RSS). Because the BJP’s government policies are linked to extra-legal enforcement by RSS paramilitary street power, this report has coined the term “The BJP-RSS regime” to reflect their intrinsic links and collaborative relationship. The Nazification of India report marks the anniversary of the Gujarat pogroms of 2002 against Muslims which propelled the BJP-RSS

Varanasi social worker who has devoted her life for the ultra-poor and the marginalized

Passion Vista and its partners profile Founder and Managing Trustee Shruti Nagvanshi as  someone whom women leaders look up to: *** Shruti Nagvanshi, a social worker and human rights activist based in Varanasi, Uttar Pradesh, has devoted her life to reaching out to the ultra-poor and marginalized communities in India. Born in Dashashwmedh, Varanasi on 2 January 1974, she married Dr Lenin Raghuvanshi on 22 February 1992 and has a son, Kabeer Karunik, a Business management Graduate who is also a national level snooker player.

An approach to lake/pond restoration by Ramveer Tanvar, Pond Man of India

By Monami Bhattacharya*, Mansee Bal Bhargava**  Lakes/ ponds are often referred to as an elixir of life, a living ecosystem that adds incremental value to the larger biota. Across the tropical landscape of the country lakes/ ponds are a common sight. Lakes/ponds have always shaped the life and livelihood of those dwelling in and around it. The dependence of the local population on these natural resources of water is noticeable since time immemorial. However, they are fading fast in both rural and urbanscapes from the popular parlance with the advance of humanity. It has been a popular notion to value land more than the waterscape and hence these nurturers of life are under stress in several areas. In many instances, these once beautiful waterscapes referred as the ‘Eye of the Earth’ are mostly now only dilapidated garbage dump yards emitting foul smell with no sign of a healthy ecosystem.

Urban crisis: Impact of erosion of democratic framework on Indian cities

By IMPRI Team  On 13th February, 2023, IMPRI Impact and Policy Research Institute, New Delhi in collaboration with ActionAid Association India arranged a book launch followed by lecture series under the title “India’s G20 Presidency & the Urban Agenda for the Developing Countries”. The event was held in Indian International Centre (IIC) Annex, New Delhi. The event began with the book inauguration session, under the honorary presence of Mr Sitaram Yechury, former Rajya Sabha member and General Secretary, CPI (M), accompanied by Mr Sandeep Chachra, executive director, ActionAid Association India. Session 1 | Book Launch: ‘Cities in Transition’ by Mr Tikender Singh Panwar The book launched was “Cities in Transition”, written by Mr Tikender Singh Panwar, former Deputy Mayor, Shimla and a Senior Fellow at IMPRI. Beginning with brief remarks on his book, Mr Panwar outlined the basic subject matter and the purpose behind writing the book, which he considers as a by-product of his experien

Panchayat funds defrauded: Roads without potholes a fundamental right but not here

Kirity Roy, Secretary Banglar Manabadhikar Suraksha Mancha (MASUM), and National Convenor (PACTI) Programme Against Custodial Torture & Impunity, writes to the chairman, National Human Rights Commission: *** Through this complaint, I want to draw your attention to the plight of the villagers of Nawdapara in the District of North 24 Parganas. The village is situated under the Bagdah Police Station, Bagdah Block and Mama Bhagina Post Office respectively. Nawdapara is a Muslim minority populated village. Indo Bangladesh Border Road (IBBR) passes through the middle of the village. There is a naka checking post of the BSF inside the village and BSF associated with Mama Bhagina Border Out Post, 68 Battalion, ‘B’ Company guard 24 hours in that check post. People have lived in this village since the independence of India. The market is about three to four kilometres away from Nawdapara village. One primary school is situated within the village but the high school is about five to six kilo

Riverscapes: mythology, iconography, folklore and origins amidst rising water problems

By Proshakha Maitra*, Mansee Bal Bhargava** Rivers are not just bodies of water and resources flowing across a landscape, but they are flows supporting a variety of cultural beliefs, values, and ways of life by linking people, places, and other forms of life (Anderson, et al., 2019). Since ancient times, rivers have been the ‘cradle of civilizations’ where the major civilizations of the world developed along the banks of the rivers. Even the earliest known urban culture of the Indian subcontinent, the Harappan (Indus Valley) Civilization developed along the banks of the Indus River that flows from the mountains of Tibet through India and Pakistan. Every river has its tales of mythology, iconography, folklore and origins which are worth knowing, especially in the current times when they are under severe distress of development. Since knowing these intangible aspects of the tangible resource/heritage is crucial to instigate emotional and spiritual connect which may in turn make people an