Banking on climate chaos – Fossil fuel finance report 2021

Fossil fuel financing by the largest 60 banks fell by nine per cent in 2020 when compared to figures from the previous year 2019 due to Covid-19 pandemic and the consequent global lockdown. But this is after consecutive year-on-year increase since 2016 between the range of 4.4 per cent to 5.5 per cent.

JP Morgan Chase continues to occupy the highest fossil fuel financier title since 2016 with around $317 billion invested in fossil fuel companies between 2016-2020, almost 33 per cent over Citi, which is the second biggest emission financier. 

France-based BNP Paribas, even with its well marketed clean, green credentials, was the fourth highest spender. It spent $40.8 billion in fossil fuel financing in 2020, a 41 per cent increase from 2019 and 141 per cent increase from 2016.

The North American and European banks dominated the list of 60 top fossil fuel financiers. From the rest of the world, Japanese banks MUFG and Mizuho finished at 6th and 8th positions respectively. And the biggest Chinese bank, Bank of China was placed at 14th rank.

State Bank of India spent a total of $21.4 billion between 2016-2020 on fossil fuel projects. 

The offshore oil and gas financing is on a rise with top 14 of the banks showing higher level of financing in 2020 compared to 2016. BNP Paribas is the top funder in the sector followed by an array of American banks. With Liquified Natural Gas (LNG) being portrayed as the transition fuel, the 30 top LNG companies have received the largest finance support in 2020 since the Paris Climate Agreement. 

Coal mining finance is dominated by Chinese banks led by Industrial Bank, China Construction Bank, and Bank of China. In fact, the 13 Chinese banks in the report provide 80 per cent of finance for coal mining.

The carbon credits based on land use change such as plantation activities threatens the livelihood and food security of indigenous communities, the report adds.

Focus and Factoids by Aditya Prem Kumar.