Fossil investment from the world’s 60 biggest banks hit US$4.6 trillion in the six years since the Paris climate agreement was signed, while the Royal Bank of Canada and TD Bank led a 51% increase in tar sands/oil sands investment last year, according to the latest edition of the annual Banking on Climate Chaos report released Wednesday.
“In 2021, the year of ‘net zero by 2050’ pledges, banks prematurely patted themselves on the back for adopting financed emissions targets a generation away while delaying serious climate action now,” concludes the analysis compiled by Rainforest Action Network, BankTrack, the Indigenous Environmental Network, Oil Change International, Reclaim Finance, the U.S. Sierra Club, and Urgewald. Overall fossil investment plateaued in 2021, but that still meant $742 billion in fossil investment in a single year—just over $2 billion per day, or $1.4 million per minute—despite urgent calls by the Intergovernmental Panel on Climate Change, the International Energy Agency, and countless others to begin drastically scaling back fossil fuels of all kinds.
While 44 of the 60 largest banks have endorsed net-zero targets, “global banks have massively supported the companies doing the most to open new oil and gas fields,” with 10 top bankers delivering 63% of the financing to the 20 dirtiest companies responsible for more than half of the investment in new fossil fuel exploration and development.
The analysis points to U.S.-based JPMorgan Chase as by far the leading fossil investor, at $382 billion over the last six years. But three Canadian banks count among the “dirty dozen” spotlighted in the report: RBC places fifth, at $201 billion; Scotiabank is in ninth spot, at $149 billion; and TD comes in 11th, with $141 billion in new fossil investment since 2016.
And despite the buzz about net-zero targets and commitments to Environmental, Social and Governance (ESG) performance, Canadian banks took five of the dozen top spots for the biggest increases in fossil financing between 2020 and 2021. RBC placed second, with an increase of $19 billion, just $1 billion behind first-place Wells Fargo at $20 billion, followed by Scotiabank at $14 billion and CIBC at $13 billion. TD and Bank of Montreal placed eighth and ninth, with increases of $4 billion each.
Canadian pipeliners Enbridge and TC Energy counted among the top 10 fossil recipients of the banks’ largesse.
Amid a cascade of business-as-usual news, Banking on Climate Chaos points to France’s La Banque Postale as a bank that set “a new bar that every major bank must meet in this crucial decade for the climate.” The $900-billion institution “announced a groundbreaking policy that suspends support for all companies expanding oil and gas, and commits the bank to exit oil and gas financing entirely by 2030.”
That’s an essential milestone, Banking on Climate Chaos says, since fossil installations already in production or under construction take average global warming well past 2°C, while today’s oil and gas production is enough to exceed a 1.5°C carbon budget.
“Experience shows us that new oil and gas fields and new coal mines, once developed, are locked in: there is overwhelming pressure to fully extract them,” the report states, while “new or expanded fossil fuel infrastructure drives expanded extraction upstream. The clear conclusion is that we simply cannot afford to develop any new oil, gas, or coal: no new oil and gas fields, no new coal mines, no new or expanded oil and gas pipelines, no new LNG terminals, no new coal-fired power plants.”
Against that reality, “any bank supporting any company that is expanding fossil fuels is driving climate chaos,” the report concludes.
Now in its 13th year, this year’s Banking on Chaos was endorsed by more than 500 organizations from more than 50 countries around the world, the sponsoring organizations said in a release, and by one high-profile politician, Rep. Rashida Tlaib (D-MI). “Our planet is staring down a point of no return, and the world’s largest financial institutions are pouring gasoline on the fire,” Tlaib said. “The science is unequivocal: the only way to limit global temperature rise to 1.5°C by 2050 is by immediately halting all financing of new fossil fuel extraction projects.”
“These banks are funding climate chaos by financing fossil fuel extraction to the tune of $742 billion in 2021 alone,” said Mea Johnson, divestment campaign coordinator at the Indigenous Environmental Network. “Indigenous peoples have long been leading the fight for the sacredness of the land, water, and Earth. Mother Earth has always given us what we need to thrive. We will not back down until our natural balance is restored and anyone helping fund the extractive destruction of our communities will be held accountable.”
“Oil, gas, and coal companies will not manage their own decline,” said David Tong, global industry campaign manager at Oil Change International. “The fundamental arithmetic of 1.5ºC requires oil and gas production to decline by at least 3-4% per year, starting now. But no major oil and gas company has committed to ending expansion, and banks around the world continue to pour billions into fossil fuels. That must stop now.”
“Any further expansion of fossil fuels risks locking humanity into generations of climate catastrophe, yet the top fossil clients of the world’s largest banks are still being showered with tens of billions of dollars even as they actively expand drilling, mining, fracking, and other fossil fuel development unabated,” said Alison Kirsch, research and policy manager at Rainforest Action Network. “With Wall Street banks leading the charge, these financial institutions are directly complicit in undermining a climate stable future for us all.”
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