The world’s biggest 30 financial institutions are undermining the drive to net zero by
funding fossil fuel production and lobbying to weaken sustainable finance policy, according
to latest research.
The world’s biggest 30 financial institutions are undermining the drive to net zero by funding fossil fuel production and lobbying to weaken sustainable finance policy, according to latest research.
Climate think tank InfluenceMap’s analysis Finance and Climate Change: A Comprehensive Climate Assessment of the World’s Largest Financial Institutions accuses the finance sector of enabling at least US$740bn of funding for fossil fuel production during the past two years. The institutions include 27 with banking arms, 25 with asset management businesses and two global insurers.
All except China’s Ping An Group have signed up to the Glasgow Financial Alliance for Net Zero, which commits them to set substantial 2030 decarbonisation targets and achieve net zero by 2050. This is in line with guidance from the Intergovernmental Panel on Climate Change and the International Energy Agency, which both state that a rapid phase-out of fossil fuel exploration and production is essential to limiting global warming. Only 11 institutions have set concrete 2030 climate targets across multiple sectors, the think tank found.
The analysis reveals that all 30 remain members of industry associations which have consistently lobbied to weaken key EU, UK and US sustainable finance policies that require transparency in funding environmentally harmful activities, including fossil fuels. BNP Paribas, AXA and Allianz are among the few that engage positively on sustainable finance, it added.
Half of the institutions are members of real-economy industry associations that are “key blockers of action on climate change”, lobbying directly in line with fossil fuel interests including the US Chamber of Commerce and the American Gas Association, InfluenceMap said.
The analysis claims that the institutions remain reluctant to introduce “meaningful fossil fuel exclusion policies" and that their banking and asset management arms remain highly active in financing coal, oil and gas. Their banking arms cumulatively facilitated at least US$740bn in primary financing to the fossil fuel value chain in 2020 and 2021 – 7% of their total primary financing in this period – largely through corporate lending and bond underwriting.
"These global financial institutions have significant economic and political influence, and they are delaying action that is essential to respond to the climate crisis,” said InfluenceMap senior analyst Eden Coates. “There is a stark disconnect between what they say about climate change and what they're actually doing – particularly when it comes to pushing back on policymakers' attempts to align financial regulation with climate goals.”
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