NGOs denounce banks over new oil and gas projects

Environmental groups took aim at the finance industry climate group, meant to focus on financing efforts to limit global warming. PHOTO: REUTERS

PARIS - The world’s top banks keep financing oil and gas projects despite claiming a commitment to carbon neutrality, environmental activists said on Tuesday.

The environmental groups took aim at the main finance industry climate group, which is meant to focus on financing efforts to limit global warming.

However, members of the Glasgow Financial Alliance for Net Zero (GFANZ) keep financing new oil projects that are incompatible with the goal of limiting global warming to the target of 1.5 deg C in the Paris climate pact, said the study.

“Between their date of joining and August 2022, the 56 top banks in the NZBA provided at least US$269 billion (S$355 billion) to 102 of the major fossil fuel expanders,” said the groups. The Net Zero Banking Alliance is one of the component industry groups of GFANZ.

At the top of the list were two US lenders: Citigroup, with US$30.5 billion in financing to groups expanding oil and gas production, followed by Bank of America, with US$22.8 billion. In third place was Japan’s MUFG at US$22.7 billion.

The climate groups added that asset managers continue to hold stocks of oil and gas firms that are developing new projects.

They found the top 58 asset managers in the alliance held US$847 billion in shares and bonds of companies developing 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.

Banks and asset managers are regularly scolded by climate activists for financing the fossil fuel sector, but say they work to finance the energy transition.

A GFANZ spokesman said, “it’s clear a lot of work needs to be done to ensure the world is deploying capital consistent with a 1.5 deg C pathway – which is exactly why GFANZ was created.”

The alliance’s members plan to publish how they are financing the energy transition and set targets.

“We know that investment in renewables needs to be four times the levels going into fossil fuels by 2030 to restrict climate change” to the 1.5 deg C target in the Paris climate pact, added the spokesman. AFP

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