Big US banks dominate fossil fuel financing in 2023, campaign report says

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JPMorgan Chase, Mizuho and Bank of America were named last year as the biggest financiers of the fossil fuel industry in a report by climate change activists, which calculated that the world’s biggest banks had given the sector a total of $6.9 trillion in the eight years since the Paris climate accord. .

The 15th annual report, produced by a coalition of campaign groups coordinated by the Rainforest Action Network, found that the world’s 60 largest lenders provided $705 billion in financing in 2023 alone.

In overall trends, financing related to gas-to-electricity, Arctic oil and gas, and ultra-deep oil and gas projects fell last year, while LNG-focused companies rose.

JPMorgan has committed $40.8 billion to fossil fuel companies in 2023, making the U.S. bank the top lender both for the year and since the Paris accord, according to the report.

The International Energy Agency said three years ago that if the world is to achieve net-zero emissions by 2050 to limit global warming in line with the Paris Agreement, there can be no new oil, gas and coal development.

JPMorgan was also the largest funder of companies expanding fossil fuel projects in 2023, while Citi took the top spot in the period since the Paris Agreement, although its funding was lower in the past two years.

JPMorgan said it is one of the world’s largest providers of financing for both traditional and clean energy companies. It announced this year that it would publish a ratio showing the share of low-carbon energy funding compared to fossil fuel energy funding, a move requested by the New York City comptroller on behalf of the pensions it administers.

“We believe our data reflects our activities more comprehensively and accurately than third-party estimates,” JPMorgan said.

Bank of America also pointed to its clean energy versus fossil fuel lending ratio, saying BloombergNEF data showed it leads its U.S. peers on that basis. “We engage with clients across the energy spectrum to help them with their energy transition goals,” the statement said.

The RAN report noted that some banks have backed away from environmental measures, including Bank of America, which dropped its exemptions for Arctic drilling, thermal coal and coal-fired power plants.

The bank said it had “clarified” its process, but its “assessment of the need for increased due diligence due to higher business risks in certain areas remains unchanged”.

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Citi said it is committed to the global transition to a low-carbon economy and to supporting clients in decarbonisation, while meeting the need for “energy security, affordability and reliability”.

As of 2020, it has reached US$441bn towards a sustainable funding target of US$1tn, and has disclosed progress towards net zero in its annual report.

Chinese banks dominated coal mining and coal power financing in 2023, the RAN report found, while Canadian banks dominated tar sands oil.

Japan’s Mizuho declined to comment, but the data indicated it had expanded funding related to building methane infrastructure in line with national government policy.

In Europe, Barclays ranks as the largest financier of fossil fuels both in 2023 and since the Paris Agreement, committing $24.2 billion in 2023 and $235 billion cumulatively since 2016, the report estimates.

The bank said it has a target of $1 trillion for sustainable and transformational financing by 2030, focusing on “diversified energy companies investing in low-carbon technologies and with greater control of those developing new oil and gas projects.”

Barclays said its funded emissions for the energy sector were cut by 44 percent between 2020 and 2023, exceeding its 2030 target.

The UK-based bank took issue with the methodology for RAN’s latest report, saying the data appeared to capture all corporate finance provided to a company and attribute it based on revenue streams, rather than the use of revenue.

The report’s authors published a change to the methodology in 2023 to take into account banks’ participation in corporate finance deals, including bonds, loans and equity issues, even if the bank was not the main bookrunner.

For this, a formula developed by the research company Profundo was used. Previous reports relied on credit ratings calculated by Bloomberg as the data provider.

The authors said the change was made to cover all bank financing and provide a better global picture. Bloomberg was the standard industry data source in North America, but not in all other markets, they noted.

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