Banking on climate collapse

The world’s biggest banks significantly increased their fossil fuel finance in 2024, according to an analysis.

The top 65 lenders – which include UK giants Barclays, HSBC, Natwest and Lloyds Banking Group – committed 869 billion dollars (£639 billion) in financing to fossil fuels, the 16th annual Banking on Climate Chaos report said.

A coalition of research and campaign groups, including the Rainforest Action Network and Reclaim finance, analysed the banks’ lending and underwriting to 2,730 companies active across the fossil fuel industry.

Abandoned

These were reported in sources such as Urgewald’s Global Oil and Gas Exit List (GOGEL) and Global Coal Exit List (GCEL), Bloomberg and London Stock Exchange Group (LSEG).

According to this year’s findings, the top banks increased fossil fuel financing by 162 billion dollars (£120 billion) from 2023 to 2024.

This marks a shift in direction after fossil fuel financing had been decreasing over the previous years since 2021.

Since Donald Trump’s election victory in the US last year, companies across many sectors have been weakening their climate commitments, cutting ESG investments and pulling out of climate groups.

Major US lenders have left the Net Zero Banking Alliance, the sector’s top climate coalition, and an increasing number of banks have watered down, or abandoned, past commitments regarding fossil fuels.

Financier

The Banking on Climate Chaos report found that since the 2015 UN Paris Agreement – an international deal secured in 2015 in France to limit rising temperatures – banks have now financed fossil fuels by 7.9 trillion dollars (£5.8 trillion).

The analysis also suggests that loans were the top form of financing last year, with an increase to 467 billion dollars (£343 billion) from 422 billion dollars (£310 billion) in 2023.

The International Energy Agency has said that no new fossil fuel projects should be developed beyond existing fields to remain within the temperature limit.

However, the report found that banks have financed companies that are expanding fossil fuels with 1.6 trillion dollars (£1.1 trillion) since 2021, and 429 billion dollars (£315 billion) alone in 2024 – a rise of 85 billion dollars (£62 billion) from the year before.

The report also identifies JP Morgan Chase as the largest fossil fuel financier in the world, committing 53.5 billion dollars (£39.3 billion) to fossil fuel companies in 2024.

Binding

British bank Barclays was the largest fossil fuel financier Europe in 2024, at 35.4 billion dollars (£26.0 billion), according to the report, which also found it to be among the top four with the largest absolute increase in fossil fuel financing.

For the other UK banks on the list, HSBC provided a total of 16.2 billion dollars (£11.9 billion) in fossil fuel financing, Natwest provided 2.7 billion dollars (£1.9 billion), and Lloyds provided 1.6 billion dollars (£1.1 billion) – although the latter comes as a decrease from 2.3 billion dollars (£1.7 billion) in 2023, according to the analysis.