Banks are continuing pump billions into new fossil fuel projects despite their own climate pledges made when they joined the Glasgow Financial Alliance for Net Zero (GFANZ), a new report has claimed.
Between April 2021 and August 2022, the alliance’s 56 largest banks provided over US$269bn to fossil fuel companies, says climate group Reclaim Finance, and accounting for roughly 60% of new projects planned before 2030.
GFANZ, which was launched in April 2021 by the UN, aims to connect financial sectors to scientists and experts in order to help firms achieve “credible” climate action, with members pledging to cut emissions upon joining.
Many of its members however have failed “to adopt meaningful fossil fuel expansions policies,” alleges Reclaim, and have continued to invest in fossil fuels.
Citigroup provided the most funding, some US$30.5bn between April 2021 and August last year, said Reclaim’s report.
Morgan Stanley (NYSE:MS) and JPMorgan were also large funders, at US$11.4bn and US$16.8bn respectively.
Neither had a policy on how they would reach net zero emissions, Reclaim added.
UK banks Barclays and HSBC featured high on Reclaims list too, with both found to have “very limited” policies on stopping oil, gas and coal projects.
NatWest Group, Goldman Sachs (NYSE:GS) and Lloyds Banking are other big names featuring in the alliance’s 550-plus strong member base.
“Only a handful of the financial institution members of GFANZ have policies that meaningfully restrict finance to companies developing new fossil supply projects,” Reclaim added.
Net zero emission expert Amanda Starbuck commented: “GFANZ members have declared themselves to be part of the fight for 1.5C.
"It is time for their CEOs to show true leadership and to take on the hard work needed to meet the challenge of financing a net zero world.”
Warnings emerged last week that a global financial meltdown could be triggered if banks fail to prepare for government-led transitions away from fossil fuels.
Campaign group coalition One for One suggested this could be worse than the 2008 financial crisis, putting 18.7mln jobs at risk globally and requiring a collective US$6.8trn bailout by the world’s governments.