Data produced for Sierra Club, Fair Finance International, BankTrack and Rainforest Action Network has been published this week, warning that financial institutions are failing to support efforts to reach net-zero emissions by 2050.
The data found that just 7% of financing from global banks for energy companies went to renewables between 2016 and 2022.
Across the 60 banks analysed, more than $2.5trn in loans and bonds to the energy sector was recorded between January 2016 and July 2022. Of that, $2.3trn went to fossil fuel production and just $178bn went to renewables.
In total, Citi and JP Morgan Chase each funnelled $181bn into the energy companies examined between 2016 and 2022 but just 2% went to renewables. Additionally, only 2% of financing from Barclays to energy firms went to renewables. Other notable figures include Royal Bank of Canada at just 1%, Mizuho 4%, HSBC 5% and 7% for French bank BNP Paribas.
The NGOs claim this is in direct contrast to the pledges from the banks as part of the industry-led Glasgow Financial Alliance for Net Zero (GFANZ). The Alliance’s own research shows that low-carbon energy investments need to account for at least 80% of energy investments compared to fossil fuels by 2030 to reach climate goals.
The research found that the share of overall financing for energy companies that went to renewables projects hit a high of 10% in 2021, but has since “stagnated” rather than increasing. Overall, the total amount of clean energy financing was $34.5bn in 2021.
Responding to the findings a GFANZ spokesperson said: “This report does not provide a comprehensive view of clean energy investment. For example, the report excludes 70% of power generation companies, the bulk of which accounts for most of the world’s wind and solar power. Analysis by the IEA suggests that between 2021 and 2022 around 48% of total energy investment went to low carbon energy supply. That would be impossible if GFANZ members weren’t financing the transition.
