Global Banks Increased Fossil Fuel Financing in 2024 Despite Climate Pledges

The globe's largest banks in 2024 greatly increased their lending to the fossil fuel sector, reversing a multi-year decline in investment and stoking renewed attacks on their climate pledges. Since the 16th annual Banking on Climate Chaos report, 65 of the planet's biggest banks supported $869 billion (£639 billion) worth of fossil fuel activities in 2024. That is a $162 billion (£120 billion) increase from 2023, contrary to self-proclaimed goals of alignment with the Paris Agreement and cutting carbon emissions.

The report is based on a thorough analysis of more than 2,700 fossil fuel firms by various environmental and research financial groups, such as the Rainforest Action Network, Reclaim Finance, and Oil Change International. The analysis considered the data of more than 2,700 fossil fuel firms from sources like the Urgewald Global Oil and Gas Exit List, Global Coal Exit List, Bloomberg, and the London Stock Exchange.

US banks were also among the biggest in terms of contributing to the rise, with JP Morgan Chase being the world's biggest funder of fossil fuels, pouring in $53.5 billion (£39.3 billion) in 2024. The rise is attributed by the report as a reflection of a wider undoing of climate promises, particularly since the 2023 election of Donald Trump. Some of the largest US banks have since dropped out of the Net Zero Banking Alliance and have watered down or reversed fossil fuel limits from their lending policy.

European banks also saw a dramatic rise in finance for fossil fuels. Barclays was the leading European bank with $35.4 billion (£26.0 billion) invested in fossil fuels during last year and is one of the world's major financiers. UK banks played a huge role: HSBC alone had $16.2 billion (£11.9 billion) invested, NatWest had $2.7 billion (£1.9 billion), and Lloyds, although decreasing, still financed $1.6 billion (£1.1 billion).

The report also reflected continued growth in the development of fossil fuels. Banks worldwide have invested $1.6 trillion (£1.1 trillion) in new fossil fuel development companies since 2021. In 2024 alone, the investment in expansion increased to $429 billion (£315 billion), from $85 billion (£62 billion) last year, in the same period. The loans were still the most significant source of finance, having increased from $422 billion (£310 billion) in 2023 to $467 billion (£343 billion) in 2024.

These initiatives go against recommendations by the International Energy Agency (IEA), which has repeatedly proved that there cannot be extra fossil fuel infrastructure if the global temperature increase is to be kept at 1.5°C above pre-industrial levels, as is the objective with the 2015 Paris Agreement.

The. new lending has come under rigid criticism from campaigners opposed to climate action. Most accuse the banks of greenwashing and reneging on their climate vows. While some. banks continue to boast their environmental, social and governance (ESG) vows, critics claim that what they do is a direct opposite of what they vow. Campaigners are calling for strict regulatory frameworks to force compliance with the science of climate and forestall additional space for fossil fuels.

Green campaigners are calling on governments and regulators to act legislatively to get financial institutions on board. Voluntary arrangements and partnerships have been shown to be meaningless in being able to lean towards genuine change, they say.

The PA news wire has approached JP Morgan Chase, Barclays, HSBC, NatWest, and Lloyds for comment, but none of them have responded so far.

Unabated growth in financing fossil fuels indicates that banks are less concerned about long-term climate resilience but more interested in short-term profits, even as the number and scale of climate crisis events escalate. The report questions the sincerity of business climate plans and whether voluntary partnerships have the potential to drive the change required to hit a global climate target.

Source: Alloa Advertiser