Since the signing of the Paris Climate Accord in December 2015, the 60 major banks examined as part of the annual report Banking on Climate Chaos, coordinated by the Rainforest Action Networkhave financed carbon projects to the tune of $5.5 trillion.
- According to the authors of the report, in 2022, the big banks granted 673 billion dollars of financing (loans, equity issues, bonds) to companies in the hydrocarbon sector to finance new projects for the extraction and exploitation of fossil fuels.
- If this overall amount is down compared to previous years (it was more than 800 billion in 2021), these large sums go once morest the commitments made to achieve carbon neutrality by 2050, in accordance with the Paris Agreement.
- Of the 60 banks listed above, 43 are members of the “Net-Zero Banking Alliance” initiative (or NZBA, which currently brings together 129 banks in 41 countries), organized by the United Nations Program Finance Initiative united for the environment.
- Of the 60 banks studied, “59 do not have policies robust enough to meet the goal of keeping global warming below 1.5°C”.
In 2022, the Canadian bank Royal Bank of Canada (RBC) granted the most financing to the fossil fuel industry, with an annual amount of $42.1 billion (behind JPMorgan, which has remained the main financier since 2016 with a total of 434 billion dollars). Overall, it is the Canadian banks that seem to play the role of “lender of last resort” to companies in the hydrocarbon industry that are being refused by European banks.
The study of this funding sheds light on the global changes that have taken place in the energy sector since the Russian invasion of Ukraine.
- While some countries – notably Germany – have considerably developed their capacities for importing liquefied natural gas (LNG) during this period, the amount of financing for infrastructure projects linked to the liquefaction or regasification of natural gas has increased by nearly 50% between 2021 and 2022, from $15.2 billion to 22.7 last year.
- Of the $13 billion in financing provided to the world’s top 30 coal mining companies, 87% was provided by Chinese banks. For companies producing electricity from coal, it is 97% of financing, for a total amount of 29 billion dollars.
- In 2022, Beijing approved the construction of the equivalent of two new coal-fired power plants per week — while the rest of the world shifts away from coal en masse, albeit at a slower pace than in previous years.
Cumulatively, between 2016 and 2022, it was mainly American banks that granted fossil financing, for a total of 1,756 billion dollars, i.e. more than the total of Chinese banks (881 billion) and Canadian banks (862 billion).
In its annual report published last June on energy investments, the International Energy Agency estimated an increase in investments in fossil fuels on a global scale for the year 2022 (+ 33 billion dollars in the oil and natural gas, + 11 billion in coal, + 5 billion for refining and + 3 billion for LNG). However, the agency notes that “investment in fossil fuels remains nearly 30% lower than when the Paris agreement was signed”.
