A comprehensive report released this week shows that after two years of decline in fossil fuel financing, the global banking industry reversed course in 2024, sharply increasing fossil loans and underwriting.
The turnaround is dramatic, Eugene Ellmen writes for Corporate Knights. After a previous high of US$922 billion in fossil financing in 2021, lending and underwriting to the industry fell to $787 billion in 2022 and then again, in 2023, to $707 billion. Last year, this downward trend reversed, and financing increased to $869 billion, according to the report, Banking on Climate Chaos (BOCC).
Jessye Waxman, senior adviser for sustainable finance for the U.S. Sierra Club, one of the report’s partner organizations, said strong oil and gas production and weak economic conditions sent fossil fuel prices lower last year, creating a need for greater external financing. At the same time, lower interest rates made it more attractive for fossil fuel companies to seek bank financing.
“The fossil fuel industry is really trying to shoehorn their way in, trying to push out alternative energy sources, and so are looking for external funding to help their expansion,” she said in a BOCC media briefing.
The report, prepared by the Rainforest Action Network with other climate advocacy organizations, is an annual assessment of fossil fuel financing by the world’s 65 largest banks.
The ramp-up comes at a time when the International Energy Agency (IEA) forecasts that investment in clean technologies (renewables, nuclear, grids, storage, low-emission fuels, efficiency, and electrification) is on course to reach $2.2 trillion in 2025, double the investment in oil, natural gas, and coal at $1.1 trillion. The increase is due to the cost advantage of green energy as well as concerns over climate change and energy security. A decade ago, fossil fuels attracted 30% more investment than clean energy, the IEA said in its annual World Energy Investment report.
Yet, 45 of the 65 banks covered in the BOCC report increased their fossil fuel financing in 2024. The United States was the largest region for fossil financing at 33% of the global total, and Canada was second at 15%, a reflection of the large size of the North American oil and gas industry and the close ties between the industry and North American banks.
JPMorgan Chase Financing Up 39%
JPMorgan Chase, the largest bank in the United States, was the top fossil fuel bank in the world, with $53.4 billion in oil, gas, and coal financing in 2024, an increase of 39% from a year earlier. Bank of America, the second-largest fossil fuel bank, increased its fossil commitments to $46 billion, 38% more than in 2023. Third-ranked Citigroup had $44.7 billion in fossil financing, nearly 50% higher than the previous year.
Among Canadian banks, Royal Bank of Canada ranked eighth highest at $34.3 billion, 16% higher than in 2023. Toronto-Dominion Bank was ninth at $29…
Read More: Banks Reverse Course, Pour More Money Into Fossil Fuels
