Slowing climate change requires support from all industries, especially the energy industry, which is responsible for the bulk of global emissions — about 35% according to the United Nations.
But according to a recent report, 12 financial institutions, dubbed the "Dirty Dozen" banks, are majorly contributing to warming temperatures by backing companies expanding oil, gas, and coal production.
What are the 'Dirty Dozen' banks?
According to the Banking on Climate Chaos report, the top 12 finance institutions accelerating fossil fuel use are JPMorgan Chase, Citigroup, Bank of America, MUFG, Wells Fargo, Mizuho, RBC, Barclays, SMBC, UBS, Scotiabank, and HSBC.
In 2023, those banks financed more than $330 billion worth of fossil fuel projects.
Some banks were worse than others. Between 2016 and 2023, JPMorgan Chase led the funding with over $430 billion. Citigroup, Bank of America, MUFG, and Wells Fargo round out the top five — all financing more than $296 billion.
"The big six US banks, JPMorgan Chase, Wells Fargo, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley, are the top 6 financiers of fracked gas activities." the report reads. "The next five companies are Canada and US-based: Royal Bank of Canada, CIBC, US Bancorp, Scotiabank, and Toronto-Dominion Bank."
What does the Banking on Climate Chaos say?
The Banking on Climate Chaos 2024 report is the work of eight organizations, including the
Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Reclaim Finance, Sierra Club, Urgewald, and CEED.
The report looked at the 60 top banks across the globe and the amount of money they're sending toward dirty energy sources.
Since the adoption of the Paris Climate Agreement at the end of 2015, the world's 60 largest banks have financed nearly $6.9 trillion in dirty fuel projects, with over $705 billion in 2023 alone, the report notes.
Why the 'Dirty Dozen' list matters
"Banks appear to have reached a plateau with their 'new normal' policies, which, taken as a whole, remain too weak to tackle oil and gas expansion" the report reads.
Net-zero commitments are crucial efforts in slowing climate change. But with the world's top lending institutions continuing to the financing of gas, oil, and coal, the researchers say those commitments fall flat.
How financing fossil fuel accelerates climate change
Dirty fuel burning is the leading producer of carbon emissions. "The energy supply sector (electricity, heat, and other energy) is the largest contributor to global greenhouse gas emissions, responsible for approx. 35% of total emissions," the United Nations writes on its website.
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Carbon dioxide is a heat-trapping gas that causes global warming. The Paris Climate Agreement set the target of keeping the global temperature from increasing more than 2.7 degrees Fahrenheit above pre-industrial levels in order to avoid a climate crisis. Reducing dependence on dirty fuels by switching to cleaner ones and adoption of electric vehicles plays a key role in meeting this goal.
The Banking on Climate Chaos report quotes the Intergovernmental Panel on Climate Change's AR 6 Synthesis Report saying, "There is sufficient global capital to close the global investment gaps but there are barriers to redirect capital to climate action," adding that "Time is running out...Each dollar that banks put toward new fossil fuel extraction or infrastructure undermines climate stability and banks' own climate commitments."
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