60 largest banks in the world have invested $3.8 trillion in fossil fuels since the Paris Agreement

Wealth

Major banks around the world are still financing fossil fuel companies to the tune of trillions of dollars.

A new report, published Wednesday from a collection of climate organizations and titled Banking on Climate Chaos 2021, finds 60 of the world’s largest commercial and investment banks have collectively put $3.8 trillion into fossil fuels from 2016 to 2020, the five after The Paris Agreement was signed.

“This report serves as a reality check for banks that think that vague ‘net-zero’ goals are enough to stop the climate crisis,” says Lorne Stockman, a Senior Research Analyst at Oil Change International, one of the organizations authoring the report, in a statement released with the report. “Our future goes where the money flows, and in 2020 these banks have ploughed billions into locking us into further climate chaos.”

On an annual basis, total fossil fuel financing dropped 9% in 2020. But the report attributes that to Covid-19-related restrictions on demand.

The report also found that “fossil fuel financing … from the world’s 60 largest commercial and investment banks was higher in 2020 than it was in 2016,” the first full year the Paris climate greement was in effect. It is worth noting that President Donald Trump withdrew from the international agreement in 2017. President Joe Biden rejoined The Paris Agreement on his first day in office.

The three banks that did the most fossil fuel financing in 2020, according to the report, were JPMorgan Chase at $51.3 billion; Citi at $48.4 billion; and Bank of America with $42.1 billion.

A representative of JPMorgan Chase told CNBC Make It that the bank could not comment on a third party report. But the bank did direct CNBC Make It to its initiatives addressing climate change, including “adopting a financing commitment that is aligned to the goals of the Paris Agreement” and facilitating $200 billion in clean, sustainable financing by 2025.

Citi directed CNBC Make It to a blog post published Tuesday from Val Smith, the bank’s Chief Sustainability Officer. In the post, Citi said it will work with existing fossil fuel banking clients to transition first to a public reporting of greenhouse gas emissions and then to a gradual phase out of financing offered to companies that don’t comply in adhering to carbon reduction standards.

“As the world’s most global bank, we acknowledge that we are connected with many carbon-intensive sectors that have driven global economic development for decades,” Smith wrote. “Our work to achieve net zero emissions by 2050 therefore makes it imperative that we work with our clients, including our fossil fuel clients, to help them and the energy systems that we all rely on to transition to a net-zero economy.”

Bank of America did not immediately respond to CNBC Make It’s request for comment.

The Banking on Climate Chaos 2021 report comes as indicators show global economies are not currently on track to meet the emissions reductions established as part of The Paris Agreement in 2015.

The 2020 report is the 12th annual, though the scope of the report has expanded in that time. The report was a collaboration by seven non-profits: Rainforest Action Network, Bank Track, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club.

The report authors aggregate bank lending and underwriting data using Bloomberg’s league credit methodology, meaning credit is divided between banks playing a leading role in a given transaction, and uses data from Bloomberg Finance L.P. and the Global Coal Exit List.

Also, banks are given the opportunity to weigh in on the findings. “Draft report findings are shared with banks in advance, and they are given an opportunity to comment on financing and policy assessments,” the report says.

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