Bank financing for energy supply companies and projects rebounded to just over $2 trillion in 2024, reversing declines from the previous two years. The increase may reflect lower borrowing costs in major economies, with debt issuance rising approximately 18% for both low-carbon and fossil fuel issuers.
However, equity issuance patterns varied significantly. While fossil fuel companies saw equity issuance grow 62% last year, clean energy companies experienced a 15% decline. Project finance showed the opposite trend, with renewables receiving 11% more funding than the previous year while fossil fuel projects declined 19%.
Global ratio remains below 1:1
The global ratio has remained consistently below 1:1, meaning banks continue directing more money toward fossil fuels than low-carbon solutions. JPMorgan Chase, the largest energy supply financier, maintained an Energy Supply Banking Ratio of approximately 0.7:1 from 2021 to 2024.
BNP Paribas emerged as a notable exception, lifting its ratio above 2:1 in recent years from below 1.4:1 in 2021, primarily by reducing its fossil fuel financing portfolio.
Several major banks, including JPMorgan Chase, Royal Bank of Canada, Citi, and Scotiabank, have adopted or committed to disclosing energy supply ratio metrics following investor campaigns for increased climate-related transparency.
Read More: Global banks slow to shift financing from fossil fuels
