Climate denail is widespread at global banks, while financing for fossil fuels continues
Key Points
- The biggest banks in the world increased their fossil fuel funding by 8%, the latest Banking on Climate Chaos report finds.
- European banks were the most likely to reduce their fossil fuel financing, while the US and Japan increased financing in 2025.
- The report calls on regulators and governments to incorporate the risks of fossil fuel financing in climate risk scenarios and capital risk buffers, and reduce public financing support for fossil fuels.
The world’s biggest banks increased their funding to fossil fuel companies by 8% in 2025, although some, particularly in Europe, are cutting financing due to climate risk concerns and regulation, a new report shows.
The annual Banking on Climate Chaos report shows financing of fossil fuel companies rose US$64bn to US$90 bn in 2025, with JPMorgan Chase remaining the world’s biggest financier, lending US$58bn in 2025 alone, up 13% from 2024.
The report, published by groups including Rainforest Action Network, Sierra Club and Oil Change International, shows how the biggest 65 banks have together funnelled US$8.7tn into oil, gas and coal since 2016.
“By injecting nearly $1tn into fossil fuel financing in 2025 alone, the world’s largest banks continue to fund the climate chaos that fossil fuel companies wreck on communities worldwide. It is time for governments to hold financial institutions legally accountable,” said David Tong, global industry campaign manager at Oil Change International.
Europe leads on cutting fossil fuel investments, while US lags behind
However, the report also includes some glimmers of hope: 26 of the 65 top global banks reduced their fossil fuel financing in 2025, compared with 23 banks last year, with European banks like BNP Paribas, UBS and La Caixa cutting fossil deals the most.
“This progress reflects the impact of EU regulatory advances to embed realistic climate risk assumptions and the fact that banks operating under stronger policy environments make different financing choices. The gap between European leaders and North American laggards is not a matter of values or markets. It is a matter of policy,” the report said.
This gap has widened since Donald Trump became US President and many US banks exited the Net Zero Banking Alliance (NZBA) – including JP Morgan Chase, Bank of America and Mizuho Financial – some of the biggest backers of fossil fuels.
“Banks keep telling us they’re committed to climate. Then they abandon their own policies the moment political pressure mounts. Voluntary pledges have had their chance. We need binding rules — not promise,” said Diogo Silva, campaign lead at BankTrack, a civil society organisation that monitors banks.
US banks accounted for 32% of total fossil financing in 2025, the report showed. Of 15 North American banks covered by the report, 12 have no meaningful fossil fuel commitments with several backtracking on previous commitments. JPMorgan Chase, Goldman Sachs, BMO, and RBC have converted Arctic exploration exclusions into case-by-case due diligence, while RBC and Scotiabank dropped their decarbonisation targets.
In Asia, the three biggest Japanese banks increased their fossil financing by over US$18bn in 2025, with more than half of that financing going to US fossil fuel companies. Chinese banks increased their share of global financing to 15.7% from 14.5%, funding over 80% of global coal mining expansion.
Calls for reducing fossil fuel financing
The report also found that the top 12 banks control almost 40% of fossil fuel financing worldwide. It notes that 87% of global bank fossil fuel financing flows through six financial centres – the United States, Canada, Japan, China, the United Kingdom and the European Union.
The organisations behind the report called on policymakers, central banks, and regulatory and supervisory bodies in those six jurisdictions to take these actions:
- Enact macroprudential, monetary, and financial regulatory reforms that incorporate the true risks of fossil fuel dependency, including mandatory Paris-aligned transition planning, climate stress testing, and higher capital buffers for fossil fuel activities.
- Rapidly reduce public financial support for fossil fuels by winding down subsidies, tax exemptions, and export credit agency support for new oil, gas, and coal projects.
- Align finance with just transition principles by mandating human rights due diligence for the financial sector, ensuring binding protections for indigenous peoples’ rights and establishing independent grievance mechanisms for affected communities.
“Major banks are not passive observers of the climate crisis. They are financing the fossil fuel expansion that is making climate risk worse and pushing those costs onto households, communities, and the broader economy,” said the report’s co-author Jessye Waxman, who is a campaign advisor for the Sierra Club Sustainable Finance Campaign.
“That should alarm institutional investors and pension funds whose portfolios depend on stable insurance markets, functioning housing markets, reliable infrastructure, and a resilient economy. Investors cannot treat bank climate policies as a side issue – continued financing for fossil fuel expansion is a direct contribution to portfolio-wide risk, and banks should be held accountable for deepening the crisis.”
The report also flags the impact of fossil fuel instability on the cost–of-living crisis, noting that fuel price shocks increase inequality as they drive inflation.
“By financing expansion, banks load the energy system with debt and riskier assets. This incentivises fossil firms to squeeze record profits – by raising prices – to service that debt. Banks earn fees on every refinancing round; ordinary people pay the bill through energy inflation,” the report says.
This page was last updated June 5, 2026
Written by
Emma Thomasson is a British journalist, consultant and trainer based in Berlin. She is an expert in economics, politics, business and technology. She previously worked for Reuters as a correspondent and bureau chief in Germany, Switzerland, the Netherlands, South Africa and the UK.
