Sylvie Willis
The issue of which banks contribute to fossil fuels has become a critical point of contention in the global fight against climate change. Major financial institutions, including JPMorgan Chase, Citibank, and Bank of America, have been identified as some of the largest funders of fossil fuel projects worldwide, despite growing calls for divestment and sustainable investment practices. These banks provide billions of dollars in loans, underwriting, and other financial services to coal, oil, and gas companies, enabling the expansion of environmentally damaging activities. As public awareness and scrutiny increase, there is mounting pressure on these institutions to align their policies with international climate goals, such as the Paris Agreement, and shift their investments toward renewable energy and green initiatives.
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What You'll Learn
Major Global Banks Funding Fossil Fuels
Despite growing calls for climate action, many major global banks continue to funnel trillions of dollars into the fossil fuel industry, perpetuating environmental degradation and hindering progress towards a sustainable future. Since the Paris Agreement in 2016, these financial institutions have provided over $4.6 trillion in financing to coal, oil, and gas companies, according to reports by organizations like Rainforest Action Network and BankTrack. This funding includes loans, underwriting services, and direct investments, enabling fossil fuel companies to expand extraction, exploration, and infrastructure projects.
Among the top offenders are JPMorgan Chase, Citibank, Bank of America, and Wells Fargo in the United States, which collectively account for a significant portion of global fossil fuel financing. JPMorgan Chase, for instance, has been labeled the "world's worst funder of fossil fuels," providing over $382 billion to the sector since 2016. Similarly, European banks like Barclays, HSBC, and BNP Paribas have been major contributors, despite public commitments to sustainability. Barclays, in particular, has faced criticism for its role in financing tar sands and fracking projects, which are among the most carbon-intensive forms of oil extraction.
In Asia, banks such as Mizuho Financial Group, Mitsubishi UFJ Financial Group (MUFG), and SMBC Group in Japan, along with Industrial and Commercial Bank of China (ICBC) and China Construction Bank, dominate fossil fuel financing. These institutions have been instrumental in funding coal-fired power plants and liquefied natural gas (LNG) projects, often in regions with weak environmental regulations. Their actions underscore the global nature of the problem, as financial flows from these banks support fossil fuel expansion worldwide.
The continued investment in fossil fuels by these major banks contradicts their public pledges to address climate change. Many of these institutions have signed onto initiatives like the Net-Zero Banking Alliance, yet their actual lending practices reveal a stark disconnect between words and actions. For example, while HSBC has committed to achieving net-zero emissions by 2050, it remains one of the largest financiers of fossil fuel projects globally, including controversial pipelines like TC Energy's Coastal GasLink.
Activists, investors, and policymakers are increasingly pressuring these banks to align their financing with climate goals. Shareholder resolutions, public campaigns, and regulatory measures are being used to push for divestment from fossil fuels and a shift toward renewable energy. However, without stronger accountability and systemic change, major global banks will likely continue to prioritize short-term profits over long-term environmental sustainability, exacerbating the climate crisis.
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Coal Financing by Top Banks
The financing of fossil fuels, particularly coal, remains a contentious issue as the world grapples with the urgent need to transition to renewable energy sources. Despite growing calls for climate action, many of the world’s top banks continue to play a significant role in funding coal projects, which are among the largest contributors to global carbon emissions. According to reports from organizations like the Rainforest Action Network and BankTrack, major financial institutions have provided trillions of dollars in financing to the coal industry over the past decade. These banks include JPMorgan Chase, Citibank, Bank of America, Wells Fargo, and Barclays, among others. Their involvement ranges from direct loans to coal companies to underwriting bonds and stocks for fossil fuel projects.
JPMorgan Chase, for instance, has been identified as the world’s largest financier of fossil fuels, with significant contributions to coal projects. Between 2016 and 2022, the bank provided over $100 billion in financing to coal companies, despite public commitments to reduce its carbon footprint. Similarly, Citibank and Bank of America have faced criticism for their continued support of coal mining and power generation projects, particularly in regions like Asia and Eastern Europe, where coal remains a dominant energy source. These banks often justify their actions by citing the energy needs of developing economies, but critics argue that such financing undermines global climate goals.
In Europe, banks like Barclays and BNP Paribas have also been major contributors to coal financing, though some have announced policies to phase out such investments. Barclays, for example, faced backlash for its role in financing coal projects in Australia and Indonesia, leading to increased pressure from shareholders and activists. While some European banks have taken steps to restrict coal financing, loopholes in their policies often allow continued support for coal-related activities, such as infrastructure development and transportation. This highlights the need for more stringent and transparent policies to ensure banks align their practices with international climate targets.
The impact of coal financing by top banks extends beyond environmental concerns, as it also has social and economic implications. Coal projects often lead to displacement of communities, health issues due to pollution, and long-term environmental degradation. By continuing to fund these projects, banks are not only delaying the transition to cleaner energy but also perpetuating harm to vulnerable populations. Activists and policymakers are increasingly calling for banks to adopt stricter criteria for fossil fuel investments, including a complete phase-out of coal financing, to align with the goals of the Paris Agreement.
To address this issue, there is a growing movement advocating for divestment from fossil fuels and greater transparency in banking practices. Shareholder resolutions, public campaigns, and regulatory pressure are pushing banks to reevaluate their role in financing coal. Some banks have begun to respond by setting targets to reduce their exposure to coal assets, but progress remains slow and uneven. For meaningful change, banks must not only stop funding new coal projects but also actively redirect investments toward renewable energy and sustainable infrastructure. As the financial sector wields immense power in shaping the global economy, its decisions regarding coal financing will be critical in determining the success of climate mitigation efforts.
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Oil and Gas Investments by Banks
The global banking sector plays a significant role in financing the fossil fuel industry, particularly oil and gas projects. According to a report by Rainforest Action Network, major banks have been consistently investing in fossil fuels, with a focus on oil and gas, despite growing concerns about climate change. Between 2016 and 2021, the world's 60 largest banks financed the fossil fuel industry to the tune of $4.6 trillion, with a significant portion allocated to oil and gas extraction, refining, and transportation. This financing has enabled the expansion of fossil fuel infrastructure, locking in greenhouse gas emissions for decades to come.
Some of the biggest contributors to oil and gas investments are banks such as JPMorgan Chase, Citibank, Wells Fargo, and Bank of America in the United States. These banks have provided substantial funding for fossil fuel projects, including offshore drilling, tar sands extraction, and liquefied natural gas (LNG) export terminals. For instance, JPMorgan Chase has been identified as the world's top funder of fossil fuels, providing over $382 billion in financing between 2016 and 2021, with a significant share directed towards oil and gas projects. Similarly, Citibank has financed numerous oil and gas pipelines, including the controversial Dakota Access Pipeline, which has faced widespread opposition from environmentalists and indigenous communities.
In Europe, banks like Barclays, HSBC, and BNP Paribas have also been major financiers of oil and gas projects. Barclays, for example, has provided billions of dollars in funding for fossil fuel companies, including those involved in Arctic oil drilling and LNG development. HSBC has faced criticism for its involvement in financing coal-fired power plants and oil sands projects, while BNP Paribas has been linked to the financing of LNG export terminals and offshore drilling operations. These banks' investments in oil and gas not only contribute to greenhouse gas emissions but also pose significant environmental and social risks, including oil spills, water pollution, and community displacement.
Canadian banks, such as Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), and Scotiabank, are also significant contributors to oil and gas investments, particularly in the Alberta oil sands. The oil sands are one of the most carbon-intensive sources of oil globally, and the expansion of this industry has been facilitated by the financial support of these banks. RBC, for instance, has been criticized for being the largest funder of tar sands oil globally, providing billions of dollars in financing for companies operating in this region. This financing has enabled the development of new pipelines, such as the Trans Mountain Pipeline, which will transport tar sands oil to the coast for export, further exacerbating climate change.
As the world transitions towards a low-carbon economy, there is growing pressure on banks to divest from fossil fuels and redirect their investments towards renewable energy projects. Some banks have started to respond to this pressure by adopting policies to restrict financing for certain types of fossil fuel projects, such as Arctic oil drilling or coal-fired power plants. However, many of these policies have been criticized as inadequate, with loopholes that allow banks to continue financing oil and gas projects. To address this issue, environmental organizations and shareholders are urging banks to adopt more robust policies, such as committing to align their financing with the goals of the Paris Agreement, which aims to limit global warming to well below 2°C above pre-industrial levels. By doing so, banks can play a crucial role in supporting the transition to a more sustainable energy system, while also managing the financial risks associated with climate change.
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Banks Supporting Pipeline Projects
Several major banks have been identified as key financial contributors to pipeline projects, which are critical infrastructure for the fossil fuel industry. These banks provide the necessary capital for the construction, expansion, and maintenance of pipelines that transport oil and gas across regions. According to reports from organizations like Rainforest Action Network and BankTrack, banks such as JPMorgan Chase, Wells Fargo, and Citibank have been among the largest financiers of pipeline projects globally. For instance, JPMorgan Chase has provided billions of dollars in funding for controversial projects like the Dakota Access Pipeline, which faced significant opposition due to environmental and Indigenous rights concerns. These financial institutions often face criticism for prioritizing short-term profits over long-term environmental sustainability and community well-being.
Wells Fargo is another prominent bank heavily involved in financing pipeline projects. The bank has been a major lender to companies like Energy Transfer Partners, the developer of the Dakota Access Pipeline. Despite public outcry and campaigns urging divestment from fossil fuels, Wells Fargo has continued to support such projects, contributing to the expansion of oil and gas infrastructure. This involvement has led to increased scrutiny from environmental activists and ethical investors, who argue that these banks are perpetuating climate change and environmental degradation by funding carbon-intensive industries.
Citibank, a subsidiary of Citigroup, has also played a significant role in financing pipeline projects. The bank has provided substantial loans and underwriting services for pipelines in North America and beyond. Notably, Citibank has been linked to projects like the Coastal GasLink Pipeline in Canada, which has faced opposition from Indigenous communities and environmental groups. Critics highlight that Citibank’s continued support for these projects contradicts its public commitments to sustainability and climate action, raising questions about the bank’s credibility in addressing environmental concerns.
Bank of America is another major player in the financing of pipeline projects. The bank has been a key lender to companies involved in the construction of pipelines, including those in the United States and Canada. Despite its stated goals to achieve net-zero emissions by 2050, Bank of America’s financial support for fossil fuel infrastructure has drawn criticism from climate activists. The bank’s involvement in projects like the Trans Mountain Pipeline Expansion in Canada underscores the disconnect between its sustainability pledges and its actual financing practices.
Internationally, banks like Royal Bank of Canada (RBC) and Barclays have also been significant contributors to pipeline projects. RBC, in particular, has been one of the largest financiers of oil and gas pipelines in North America, including the Keystone XL Pipeline before its cancellation. Barclays, a UK-based bank, has provided substantial funding for pipeline projects globally, despite growing calls for banks to align their operations with the goals of the Paris Agreement. These banks’ continued support for fossil fuel infrastructure highlights the global nature of the financial industry’s role in perpetuating climate change.
In conclusion, banks supporting pipeline projects remain a critical link in the fossil fuel supply chain, providing the capital necessary for the expansion of oil and gas infrastructure. Institutions like JPMorgan Chase, Wells Fargo, Citibank, Bank of America, RBC, and Barclays have faced increasing pressure to divest from these projects due to their environmental and social impacts. As the world moves toward a more sustainable energy future, the role of these banks in financing fossil fuel infrastructure will be a key area of focus for activists, policymakers, and ethical investors alike.
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Climate Policies vs. Fossil Fuel Loans
The global financial sector plays a pivotal role in addressing climate change, yet many banks continue to finance fossil fuel projects, undermining international climate policies. According to research by organizations like Rainforest Action Network and BankTrack, major banks such as JPMorgan Chase, Citibank, and Bank of America are among the largest contributors to fossil fuel financing. Between 2016 and 2022, these banks collectively provided over $4 trillion in loans and underwriting services to fossil fuel companies, despite global commitments to reduce greenhouse gas emissions. This financial support perpetuates the extraction and burning of coal, oil, and gas, directly conflicting with the goals of the Paris Agreement and other climate policies aimed at limiting global warming to 1.5°C.
Climate policies, such as carbon pricing, renewable energy incentives, and emissions reduction targets, are designed to shift economies away from fossil fuels. However, the continued flow of capital from banks to fossil fuel industries creates a significant barrier to these efforts. For instance, while governments and international bodies push for decarbonization, banks' fossil fuel loans often fund new oil and gas pipelines, coal mines, and drilling projects. This misalignment highlights a critical gap between policy intentions and financial practices, as banks prioritize short-term profits over long-term environmental sustainability.
To address this issue, some banks have begun adopting climate-related policies, such as committing to net-zero emissions by 2050 or restricting financing for certain fossil fuel projects like Arctic drilling. However, these commitments are often criticized as insufficient or lacking in transparency. For example, a bank may pledge to reduce coal financing while simultaneously increasing investments in natural gas, which still contributes to carbon emissions. Without robust enforcement mechanisms and clear timelines, such policies risk becoming greenwashing tools rather than meaningful steps toward sustainability.
Advocacy groups and shareholders are increasingly pressuring banks to align their lending practices with climate goals. Campaigns like the #DefundClimateChaos movement have called for divestment from fossil fuels and reinvestment in clean energy. Additionally, regulatory bodies are beginning to introduce guidelines, such as the European Union's taxonomy for sustainable activities, to ensure financial institutions contribute to climate objectives. Despite these efforts, the scale of fossil fuel financing remains vast, underscoring the need for more stringent regulations and accountability measures.
Ultimately, the tension between climate policies and fossil fuel loans reveals a systemic challenge: the financial sector's role in either accelerating or mitigating climate change. Banks have the power to drive the transition to a low-carbon economy by redirecting capital toward renewable energy and sustainable projects. However, as long as fossil fuel financing continues at its current pace, climate policies will struggle to achieve their intended impact. Bridging this gap requires not only stronger commitments from banks but also collective action from governments, investors, and civil society to create a financial system that prioritizes the planet's future over short-term gains.
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Frequently asked questions
As of recent data, banks like JPMorgan Chase, Citibank, Bank of America, Wells Fargo, and RBC (Royal Bank of Canada) are among the largest global contributors to fossil fuel financing, funding projects such as oil, gas, and coal extraction.
Not all banks contribute to fossil fuels. Some banks, particularly those focused on sustainability, like Triodos Bank, Amalgamated Bank, and Climate First Bank, explicitly avoid financing fossil fuel projects and prioritize green investments.
You can check reports from organizations like BankTrack, Rainforest Action Network, or the Sierra Club’s "Fossil Free Banking" campaign, which provide detailed information on banks' fossil fuel financing activities. Additionally, some banks disclose this information in their sustainability reports.
You can take action by moving your money to a bank that does not finance fossil fuels, contacting your bank to express your concerns, or joining campaigns advocating for banks to divest from fossil fuels and invest in renewable energy instead.
