Funding of fossil fuels eclipses climate finance

08 Sep, 2023 - 00:09 0 Views
Funding of fossil fuels eclipses climate finance

eBusiness Weekly

Funding for polluting industries far outstrips support for climate change mitigation, a new report shows.
Top banks are funding two of the world’s most polluting industries far more aggressively than governments are funding solutions, a new report reveals.

Banks including HSBC, Citigroup and JP Morgan Chase have poured almost €3 trillion into the expansion of fossil fuels in the Global South since the Paris Agreement on Climate Change was adopted seven years ago.

A further €340 billion has been funnelled into industrial agriculture, the second major cause of climate change, according to an analysis by NGO ActionAid.

This is 20 times more than Global North governments have provided developing nations to mitigate the climate crisis.

“The world’s money is flowing in the wrong direction,” says Arthur Larok, secretary general at ActionAid International. “This is absurd and must stop.”

Which banks are financing fossil fuels?

The report, ‘How the Finance Flows: The banks fuelling the climate crisis’, reveals the top banks from each region funding fossil fuels and industrial agriculture in the Global South.

The Industrial and Commercial Bank of China was found to be the largest financier of fossil fuels between 2016 and 2022.

Among European banks, HSBC was the worst offender. But the British bank decided in December last year that it would no longer provide funding for new oil and gas fields.

Other European banks highlighted in the report include BNP Paribas, Societe Generale and Barclays.

In the Americas, Citibank, JPMorgan Chase and Bank of America were the worst offenders. While in Asia, China CITIC Bank, Bank of China and Mitsubishi UFJ Financial were some of the biggest funders of fossil fuels and industrial agriculture.

“Global banks often make public declarations that they are addressing climate change but the scale of their continued financing of fossil fuels and industrial agriculture is simply staggering,” says Teresa Anderson, global lead on climate justice at ActionAid International and author of the report.

German pharmaceutical and agrochemical company Bayer was found to be the largest recipient of industrial agriculture financing in the Global South, having received over €19 billion since 2016.

Could governments be doing more to redirect funding?

Developing nations contribute least to climate change yet often experience its worst effects.

As the biggest emitters of greenhouse gas emissions, wealthy nations have been called on to help combat the climate crisis abroad.

The report says governments should regulate the financing of fossil fuel expansion, regulate chemical use and deforestation, and support solutions such as renewable energy and sustainable agriculture practices like agroecology.

It also urges banks to adopt more sustainable practices.

“By financing fossil fuel and industrial agriculture in the Global South, banks are condemning communities to the cruel combination of landlessness, deforestation, water pollution and climate change,” says Andrea.

“Banks need to own up to the harm that they are unleashing on the communities and the planet, and urgently stop financing the destruction wreaked by fossil fuels and industrial agriculture.” — Euronews

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