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While Global Temperatures Soar, Banks Are Stepping Up Support for Fossil Fuels [1]
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Date: 2025-06
As the planet teeters on the brink of breaching the Paris threshold of 1.5°C above pre-industrial levels of warming, a new report reveals that banks and financial institutions are continuing to finance the industry most responsible for planet-heating emissions: fossil fuels.
From Canada’s tar sands to dense forests in the Philippines and from Argentina’s coast to the heart of central India, fossil fuel projects are displacing people, destroying biodiversity and emitting greenhouse gases that push global temperatures higher than they have ever been. Financial institutions the world over continue to finance those projects with $869 billion in 2024, according to the annual Banking on Climate Chaos report released today.
“This should be a wake-up call to national governments and regional supervisory bodies that they need to step in,” said Allison Fajans-Turner, bank engagement and policy lead at Rainforest Action Network and one of the coauthors of the report. “Banks are not policing themselves. Regulators need to set rules to manage the financial risk that banks are putting into the system.”
“As rich as fossil fuel companies are, they don't have enough capital to do it on their own. They need to borrow the money and issue bonds and have banks help them with that,” said Caleb Schwarz, senior research strategist at Rainforest Action Network.
Banking on Climate Chaos is a collaborative effort across eight organizations, including Rainforest Action Network, Banktrack, Oil Change International, and the Sierra Club. Analysts and researchers from these organizations keep track of the activities of thousands of companies involved in fossil fuel projects, the frontline communities they impact, and the biggest banks that fund them. Their findings provide a means for civil society groups and policymakers to pressure these financial institutions, and they also highlight the need for stronger regulation on the financial industry.
The 2025 report focuses on 65 of the largest banks in the world. Although several banks voluntarily disclose some of their investments in fossil fuels, there are several loopholes through which a large portion of these investments are obfuscated. That makes getting the data challenging and requires working across multiple datasets, because the information is not readily available, said Schwarz, who analyzed much of the data in the report.
One of the main sources of information is the Global Oil & Gas Exit List and Global Coal Exit List maintained by Urgewald. The organization tracks thousands of companies that receive 10 percent or more of their revenue from fossil fuels, said Katrin Ganswindt, head of fossil fuel research at Urgewald and one of the coauthors of the report.
The researchers tracked which of the 65 banks financed companies on lists like the ones maintained by Urgewald. Financing can be in the form of direct loans to companies, or by underwriting bonds (debt) issued by companies. In addition, banks could either finance specific projects (known as project finance) or general expenditures (known as corporate finance). This is important because corporate financing, which can make up as much as 90 percent of banks’ investments in a company, are rarely included in a bank’s voluntary disclosures about its fossil fuel investments.
In all, the report states that 65 of the world’s largest banks committed “$869 billion to companies conducting business in fossil fuels in 2024, with close to $3.3 trillion since 2021.” That includes $429 billion in 2023–24 for companies involved in new fossil fuel projects—an increase of $84 billion from the previous year.
The increase in investments seen in this year’s report goes against the trend observed in the recent years. “It's a massive reversal of over $150 billion more to fossil fuels between 2023 and 2024. One-third of that amount is coming from US headquartered banks,” Fajans-Turner said.
Many of the largest funders of fossil fuels in 2024 were the biggest US banks, including JPMorgan Chase, Bank of America, Citibank, and Wells Fargo. US banks committed $289 billion in fossil fuel financing in 2024. This was expected since these banks have historically been the biggest funders of fossil fuels. They also recently quit the Net-Zero Banking Alliance, an international coalition of banks that had signed up to make voluntary commitments to phase out fossil fuels.
Some Japanese banks also massively ramped up funding for fossil fuels, most of it going to liquefied natural gas (LNG) projects in the United States. For example, Japanese bank Mizuho Financial committed an additional $4 billion in 2023-24 compared with the previous year and are among the top financial backers of Enbridge, a Canadian company involved in LNG pipelines and exports in the US and Canada.
Even coal is expanding. According to the Global Coal Exit List, new plants with the capacity to burn 2,636 million tons of coal a year were planned in 2024, especially in China and India. Much of this coal will be used to power manufacturing plants such as the JSW Utkal Steel power plant in India. Since they are not part of the larger grid supplying electricity, phasing out such captive coal plants is harder.
According to the International Energy Agency, new fossil fuel projects after 2021 are incompatible with the goal of limiting global warming to 1.5°C above pre-industrial levels. But in 2024, global average temperatures had already reached 1.28°C above the historical baseline. In the short term, the planet has crossed the 1.5°C threshold, with monthly temperature readings consistently breaking records.
Ganswindt thinks regulations that create transparency, such as France’s ISR label, which severely disincentivizes investing in expanding fossil fuel companies, among other mechanisms, could stem the flow of capital to fossil fuels. She hopes the data within the report can help policymakers justify such regulations. The researchers also hope the report can be used by communities affected by fossil fuel projects to pressure financial institutions. Many of the fossil fuel projects highlighted within the report are under legal scrutiny for human rights violations, for breaching the land rights of Indigenous peoples and for polluting land and water.
“These projects are heinous. It's really tragic that banks continue to choose to be associated with these projects,” said Schwarz.
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[1] Url:
https://www.sierraclub.org/sierra/while-global-temperatures-soar-banks-are-stepping-support-fossil-fuels
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