Fossil fuels are a dead end for people and the planet. Big banks are financing them anyway.
2023 was the hottest year ever recorded, with an average global surface temperature 1.4°C above 19th-century averages. Climate impacts are intensifying: 2023 saw heat waves, droughts, stronger storms, atmospheric rivers, flooding, record-low global sea ice, tropical cyclones, and a global wildfire crisis. These impacts could quadruple heat deaths, and create food insecurity for over half a billion people on the planet. Unless action is taken now, it’s estimated that climate change will kill an additional 250,000 people annually, especially in areas without adaptive infrastructure.
Years ago, banks made commitments to our climate and to human rights. What have they done in that time? Instead of any significant investment into a just transition to sustainable energy systems or support for the communities and ecosystems that have already been severely impacted by ever-intensifying climate disasters, big banks are STILL financing our demise by pouring billions and billions into fossil fuels every year. That’s right. The 15th annual Banking On Climate Chaos report is here, and it reveals that eight years after the Paris Agreement, big banks are still financing climate chaos. Fossil fuel financing from the world’s 60 biggest banks has reached a staggering $6.9 TRILLION (that’s Trillion with a “T”) since the Paris Agreement.
Here’s a look into some of the major findings from the newest report:
Expansion financing needs to be at $0 – it was $347 billion in 2023
The science is clear, and the facts are simple: our climate cannot afford any new fossil fuel projects. The industry and its bankers have known this for years, yet these banks continue to throw hundreds of billions at expansion companies. Banks committed a combined $347 billion in 2023, making the total committed to expansion companies since the Paris Agreement a terrifying $3.3 trillion.
JPMorgan Chase spent the most on expansion in 2023. In fact, their expansion financing increased from the year before, rising from $17.2 billion in 2022 to $19.3 billion in 2023. Japanese banks Mizuho and MUFG took second and third place, financing $19 and $15.4 billion, respectively.
Methane gas aka the fastest-growing fossil fuel sector in the world
Methane gas – which is greenwashed by the industry as liquefied “natural” gas – is a toxic and volatile fossil fuel that’s been marketed as both a “bridge fuel” to sustainable energy systems and a “green fuel.” Not only does methane pose major health and explosion risks in both communities methane facilities operate in and homes that use it, but it’s a greenhouse gas with 80x more climate-warming potential than carbon dioxide over a twenty-year period. Don’t believe the lies. Just like you wouldn’t call coal “natural rock,” there’s no such thing as “natural gas” — and there’s nothing “natural” about rapid fossil fuel expansion.
Just like methane projects, methane financing is also on the rise. Total financing committed for methane gas import, export, and shipping increased from $116 billion in 2022 to $121 billion in 2023. Japanese megabanks, Mizuho and MUFG, were the top financiers of methane in 2023, providing $10.9 billion and $8.4 billion to companies expanding methane, respectively.
The Big 6 Still Big Suck
U.S. banks are still leaders of the pack of fossil fuel financing, with four of the six reigning among the Dirty Dozen, the highest financiers of fossil fuels since the Paris Agreement.
- JPMorgan Chase remains the world’s worst financier of fossil fuels, committing $40.8 billion in just 2023, bringing their total financing since 2016 to $431 billion.
- Second is Citigroup with $30.3 in 2023, reaching a $396.3 billion total.
- Bank of America has climbed the ranks and now comes in at 3rd place with $33.7 in 2023, putting them at $333.2 billion overall.
- Wells Fargo takes the 5th slot as their $30.4 billion in 2023 brings them to $296.3 overall.
Bank of America are breaking their promises to people and planet
Bank of America has financed over $333 billion to fossil fuel companies since 2016. They also rank 3rd worst in the world in overall financing, expansion, and methane. Somehow, it gets worse. In 2023, Bank of America started rolling back and diluting their own climate policies and is now the ONLY major U.S. bank without restrictions on financing Arctic drilling, thermal coal mining, and coal-fired power plants. And the policies they have left are so full of loopholes that they’re overshooting their own climate commitments.
Fracking is a U.S. Problem
Wall Street has a nasty problem on its hands: fracking. All the Big 6 U.S. Banks — Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley, and Goldman Sachs — rank among the top financiers of fracked gas activities, providing a combined over $243 billion since 2016.
Some Wall Street bank’s fracking financing even increased in 2023:
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- Chase $4.1 billion in 2022 → $6 billion in 2023
- Goldman Sachs $2 billion in 2022 → $3.9 billion in 2023
- Morgan Stanley $1.5 billion in 2022 → $3 billion in 2023
By financing fracking, these banks are still financing the production of NEW gas. Yet another reason why methane expansion is in no way sustainable — only 20% of methane gas in the U.S. isn’t fracked.
Japanese Banks are Climbing the Rank
You may have noticed a trend of Japanese banks taking many of the top financing slots in 2023. Japanese Megabanks Mizuho, MUFG, and SMBC are climbing the ranks of fossil fuel financing – this comes as no surprise, thanks to public financing and other policy support offered by the Japanese government. Southeast Asia is also one of the epicenters of massive methane expansion, largely backed by these same banks.
- Mizuho ranks #2 for financing overall. Mizuho increased its financing commitments for all fossil fuels between 2022 and 2023 from $35.4 billion to $37 billion. Mizuho rose 4 places in the overall annual ranks, from 6th in 2022.
- MUFG also ranks third worst among financiers of fossil expansion companies in 2023 at $15.4 billion.
- SMBC rose from 16th place in 2022 with $139.9 to 9th place in 2023 with $212.2 billion.
- The three banks are also the largest financiers of ultra-deepwater extraction.
Frontline Stories
Climate change hits the frontlines first and worst. People living on the frontlines of climate chaos and the fossil fuel industry are predominantly Indigenous Peoples, Black and Brown communities, low-wage workers, women, fishers or smallholder farmers, often living in poverty. By financing fossil fuel projects and/or the companies behind them, these banks are just as responsible for the destruction to communities, health, and lives as the fossil fuel companies themselves.
From the Gulf South, to Uganda, to Papua New Guinea, explore the map on bankingonclimatechaos.org to see how people across the globe are opposing fossil fuel fuels in their communities, showing the world how to rise to the challenge of this moment.
Kobe Climate Case
Right now, residents of Kobe City, Japan are in a legal battle against coal-fired power plants financed by MUFG, Mizuho, and SMBC. Kobe Steel – the company behind these plants – is already the largest fixed source of C02 & air pollution in Kobe, and yet they’re expanding. Residents have been resisting the severe local health and climate risks from coal-fired power plants in the city for decades. They’re demanding the financiers and government phase out coal use now. Learn more and follow the fight at kobeclimatecase.jp/en.
Defund Climate Chaos
Time is running out. We can’t afford to overshoot the goal of limiting global temperature rise to 1.5°C. Banks and other financial institutions must use their leverage to drive major energy changes NOW. If we have any hope of limiting the most devastating impacts of climate disasters, all fossil fuel expansion must end immediately, and many existing assets must be phased out. Each dollar that banks put toward new fossil fuel extraction or infrastructure undermines climate stability and banks’ own climate commitments.
Continued financing of a boom-and-bust cycle of fossil fuel economy will lock the world into energy insecurity and unthinkable harms for generations to come. Banks must act quickly to align their financing with an ambitious pathway to 1.5°C that enables a fair and just transition. They must defund climate chaos by:
- Excluding all finance for fossil fuel expansion immediately.
- Adopting absolute financed emissions reduction targets for oil, gas, and coal aligned with a rigorous 1.5 C scenario.
- Demanding robust, 1.5ºC-aligned transition plans for all existing fossil fuel clients.
- Protecting human rights and the rights of Indigenous Peoples.
- Scaling up financing for a just and fair transition.
Imagine the positive change that could be made with this money. We are in a pivotal time to make drastic changes for people and planet – before it’s too late. Join the 8 organizations that authored this report and the 589 endorsers in demanding banks defund climate chaos.
