INSIGHT by Stand.earth
As communities experience year-round fires, floods, smoke, and deadly heat, the 15th annual Banking on Climate Chaos report revealed today that banks around the world are continuing to finance fossil fuels at dangerous levels, surpassing $6.9 trillion since 2016.
Nearly half – $3.3 trillion – went towards fossil fuel expansion, at a time when science and justice demand a swift and rapid fossil fuel phase-out. The worst funder of fossil fuel expansion since the Paris Agreement is Citigroup, providing $204 billion since 2016. In 2023, Citi ranked 7th for expansion financing, with more than $14.6 billion worth of fossil fuel expansion deals.
The big five Canadian banks did an outsized proportion of the total fossil fuel financing for the period of 2016-2023 at US $911.15 billion or 13% of all deals, including 45% of all tar sands deals last year. Three banks made the 2023 Dirty Dozen – RBC (#7), Scotiabank (#10), and TD Bank (#11) – and all five are in the top 16 spots globally.
With an updated methodology in place, RBC remains Canada’s #1 fossil bank, #7 globally, #4 for financing fossil fuel expansion in 2023; Scotiabank is #6 globally for financing expansion of fossil fuels in 2023. This report comes following an Indigenous- and frontline-led takeover of RBC’s annual shareholder meeting.
In Amazonia, Citibank, Bank of America and JPMorgan Chase are top financiers of oil and gas at $4.97 billion between 2016-2023. Since 2016, the top 60 banks have financed $11.15 billion in Amazonia extraction. Amidst an imminent tipping point as Amazonia faces the worst drought in history, three American banks are quickly followed by European Santander.
With research contributed by Stand.earth Research Group, the report reveals that Citibank has financed over $1.98 billion since 2016. Despite Citibank’s commitment to Indigenous Peoples in its Statement on Human Rights, just last year the bank took part in a $500 million bond deal for Hunt Oil Peru – one of the companies behind the notorious Camisea Gas Project. In 2013, the UN called for an immediate suspension of Camisea as it threatens the survival of several uncontacted and isolated tribes in the territory.
“We have the solutions, yet Canada’s big banks are still lighting the fuses of carbon bombs, pouring billions into fossil fuel financing during the hottest year on record. In Canada, the Big Five are all top 16 global fossil fuel financing banks. Canadian banks are positioned as lenders of last resort, holding dangerously outsized fossil fuel financing, which should sicken and worry us all. Canada’s largest bank RBC – under CEO Dave McKay – is proving unwilling to lead. It’s time for our government and regulators to step in and mandate Canadian banks help rather than hinder our climate goals.”
-Richard Brooks, Stand.earth Climate Finance Director
| Highlights
(↑ indicates financing increased for this sector from 2022 to 2023, ↓ a decrease)
↓ Amazon oil and gas: In this report, Bank Of America leads financing for 24 companies extracting in the Amazon biome at $162 million — $33 million more than the next bank in the ranking, JP Morgan Chase. Financing totaled $632 million in 2023, dropping from $802 million in the year prior.
↓ Tar sands oil: The top 36 tar sands companies received $4.4 billion in financing in 2023, a $4 billion drop from the previous year. Canadian banks provided 45% of those funds. Top funders are CIBC, RBC, Scotiabank, Toronto-Dominion Bank, and Mizuho.
↑ Methane Gas (LNG): The top bankers of 130 companies expanding liquefied methane gas (LNG) in 2023 were Mizuho, MUFG, Santander, RBC, and JPMorgan Chase. Overall finance for liquefied methane increased to $120 billion in 2023.
↑ Coal mining: Of the $42.5 billion in financing that went to 211 coal mining companies in 2023, 81% was provided by banks located in China, led by China CITIC Bank, China Merchant Bank, Shanghai Pudong Development Bank, Industrial and Commercial Bank of China (ICBC), and China Everbright Group. Financing for this sector is up slightly compared to 2022.
↑ Metallurgical coal: The 48 companies active in metallurgical coal mining received commitments of $2.54 billion in financing in 2023. Top banks include CITIC, China Everbright Group, Bank of America, and Ping An Insurance Group. Financing for this sector is up slightly compared to 2022.
↓ Coal-fired power: Of the financing to the coal power companies listed on the Global Coal Exit List, 65% of financing was provided by banks located in China. In 2023, these companies received $80 billion from the banks in this report. Financing for this sector is down slightly compared to 2022.
↓ Gas-fired power: Banks committed $108 billion in financing to 252 companies expanding gas-fired power in 2023. The top 3 financiers in this sector are Mizuho, ICBC, and MUFG. Financing for this sector is down compared to 2022.
↓ Expansion: The 60 banks profiled in this report funneled $347 billion in 2023 into 874 companies expanding fossil fuels including Enbridge, Vitol, TC Energy, and Venture Global. In 2022, $385 billion went towards expansion. Financing for these expansion companies is down compared to 2022.
↓ Fracked oil and gas: Finance for 236 fracking companies totaled $59 billion dollars in 2023. U.S. Banks dominate this sector, with the top funders being JP Morgan Chase, Wells Fargo, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley.
↓ Ultra Deepwater oil and gas: Japanese banks Mizuho, MUFG, and SMBC Group top the list of worst financiers of 66 companies involved in ultra deepwater oil and gas for 2023. Financing totaled $3.7 billion in 2023, down from 2022.
↓ Arctic oil and gas: Financing for 45 companies involved in Arctic oil and gas dropped from $3.3 billion to $2.4 billion. The worst banks financiers of this sector in 2023 are UniCredit, Citigroup, Intesa Sanpaolo, Barclays, and Credit Agricole.
Sector reporting in BOCC 24 is aligned with the Global Oil & Gas Exit List (GOGEL) and the Global Coal Exit List (GCEL), researched by Urgewald. All companies listed by the GOGEL or GCEL that show bank financing in each sector are reported. All companies identified on the GOGEL or GCEL as expansion companies are reported in the expansion league table. Amazon biome companies were identified by Stand.earth Research Group. Metallurgical coal companies were identified through a collaboration between BankTrack and Reclaim Finance.
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.
