G-20 News

Banks continue to finance fossil fuels despite climate commitments


Despite pressure from investors and society, banks around the world continue to lend money and underwrite bonds issued by oil, gas and coal companies, with fossil fuel bond deals made by banks at nearly $ 250 billion in 2021, Bloomberg data showed Monday.

JP Morgan has funded the largest volume of combined loans and bonds so far this year, followed by Wells Fargo, Citi, RBC and Mitsubishi UFJ, according to Dec. 3 data compiled by Bloomberg.

Wells Fargo has been the largest lender in the fossil fuel industry this year, with most of its exposure to the sector going to business loans.

As environmentally conscious investors push Wall Street banks – and every bank in the world for that matter – to avoid fossil fuels, the big banks say that by continuing to finance oil and gas, they are helping the economy. sector to invest in low-carbon energy solutions that would help decarbonise the global energy system.

“It’s really important that our customers take action to innovate and decarbonize, but we also need to bring capital to the table for the commercialization of these solutions,” Marisa Buchanan, Global Head of Sustainability at JPMorgan Chase & Co.

In May this year, UN Secretary-General António Guterres said banks should finance low-carbon, climate-resilient projects, not large fossil-fueled infrastructure that is no longer even profitable. .

“We can no longer afford large fossil fuel infrastructure anywhere. Such investments only make our situation worse. They are not even profitable, ”Guterres said in his speech at the Petersberg Climate Dialogue in 2021.

In October this year, the rating agency Moody’s Investors Service said in a report that in G-20 countries, financial companies hold 22 trillion dollars in loans and investments subject to the risk of carbon transition.

“Financial firms that embrace a rapid but predictable transition to climate-friendly finance will best preserve their credit quality,” Moody’s said.

By Tsvetana Paraskova for Oil Octobers

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