A new report demonstrates that funding for polluting industries dwarfs support for climate change mitigation.
A new report reveals that top banks fund two of the world’s most polluting industries far more aggressively than governments fund solutions.
Since the adoption of the Paris Agreement on Climate Change seven years ago, banks such as HSBC, Citigroup, and JP Morgan Chase have invested nearly €3 trillion in the expansion of fossil fuels in the Global South.
According to an analysis conducted by the non-profit organization ActionAid, an additional €340 billion has been invested in industrial agriculture, the second largest contributor to climate change.
This is 20 times more than what governments in the Global North have provided to developing nations to combat climate change.
“The world’s money is flowing in the wrong direction,” says Arthur Larok, the secretary general of ActionAid International. “This is absurd and it must stop.”
Which banks are financing fossil fuels?
The report, titled “How the Finance Flows: The Banks Fueling the Climate Crisis,” identifies the leading institutions in each region that finance fossil fuels and industrial agriculture in the Global South.
Between 2016 and 2022, the Industrial and Commercial Bank of China was the largest financier of fossil fuels.
Among European financial institutions, HSBC was the worst offender. But the British bank declared in December last year that it would no longer provide funding for new oil and gas fields.
BNP Paribas, Societe Generale, and Barclays are some of the other European institutions highlighted in the report.
Citibank, JPMorgan Chase, and Bank of America were the worst offenders in the Americas. China CITIC Bank, the Bank of China, and Mitsubishi UFJ Financial were among the largest financiers of fossil fuels and industrial agriculture in Asia.
The report’s author, Teresa Anderson, is the global lead on climate justice at ActionAid International and the global lead on climate justice at ActionAid International. “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,” Anderson says.
Bayer, a German pharmaceutical and agrochemical corporation, has received over €19 billion in financing for industrial agriculture in the Global South since 2016.
Could governments take additional steps to redirect funds?
Despite contributing the least to climate change, developing nations frequently experience its worst effects.
As the largest emitters of greenhouse gases, affluent nations have been asked to assist in combating the global climate crisis.
According to the report, governments should regulate the financing of fossil fuel expansion, regulate chemical use and deforestation, and support solutions like renewable energy and sustainable agriculture practices such as agroecology.
Furthermore, it encourages banks to implement more sustainable practices.
“By financing fossil fuels and industrial agriculture in the Global South, banks are condemning communities to a 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.”