Banks financing new oil and gas projects come under NGO fire

By Al Mayadeen English
Source: Agencies
17 Jan 2023 13:59

Environmental activist groups warn that the world's biggest banks are still financing new oil and gas projects that are incompatible with the goal of reaching carbon neutrality.

Equipment used to process carbon dioxide, crude oil at an Occidental Petroleum Corp oil recovery project in the US (Reuters)

Despite joining industry associations committed to achieving carbon neutrality, the world's biggest banks continue to finance new oil and gas projects that are incompatible with that goal, environmental activist groups warned on Tuesday.

Environmentalists targeted the Glasgow Financial Alliance for Net Zero (GFANZ), which has emerged as the major climate alliance for finance industry corporations committed to achieving carbon neutrality by 2050 and aligning with a 1.5-degree Celsius increase in global temperatures this century.

However, a study conducted by Reclaim Finance, 350.org, BankTrack, Rainforest Action Network, Recommon, Urgewald, Les Amis de la Terre, Sierra Club, and Stand Earth found that many lenders in GFANZ's Net Zero Banking Alliance sub-group are still financing new oil projects, which experts believe are incompatible with limiting global warming to 1.5°C.

"Between their date of joining and August 2022, the 56 top banks in the NZBA provided at least US$269 billion to 102 of the major fossil fuel expanders," said the groups.

Citigroup led the list with $30.5 billion in funding to groups developing oil and gas production, followed by Bank of America with $22.8 billion. MUFG of Japan came in third place with $22.7 billion.

Climate activists also pointed out that fund managers continue to own equities in oil and gas companies that are planning new projects.

They discovered that the alliance's top 58 asset managers had $847 billion in shares and bonds of companies exploring new fossil fuel projects.

"There is now broad agreement... that there is no room in a 1.5-degree carbon budget for the carbon that would be brought into the atmosphere from new fossil fuel supply," said Paddy McCully, author of the report and an analyst for Reclaim Finance, as quoted by AFP.

It is worth noting that banks and asset managers are frequently chastised for funding the fossil fuel business, although they claim to be working to finance the energy transition.

Food insecurity, air intoxication, diseases, drought, and deteriorated worker productivity are just some of the effects that the #climatecrisis has so far triggered on a global scale. pic.twitter.com/VeSFgFfrQL
— Al Mayadeen English (@MayadeenEnglish) October 28, 2022