Banking on Climate Chaos 2023

Fossil Fuel Finance Report

April 22, 2023Published by Rainforest Action Network and others

The latest edition of Banking on Climate Chaos, published annually by a coalition of civil society groups, documents fossil fuel financing from the world’s 60 largest private banks and is the most comprehensive global analysis of fossil fuel banking to date.

It shows that $5.5tn has been invested in fossil fuel companies since the adoption of the Paris Agreement in 2016. In 2022 alone, these banks put USD$673bn into the industry, despite “clear and dire” warnings from experts that any further fossil fuel expansion will result in climate and economic chaos.

The results reveal that the top five banks in 2022 were North American, with the Royal Bank of Canada in first place, lending USD$42.1bn. La Banque Postale was the only bank to match its net-zero commitments with action by offering no financing to fossil fuel projects.

The analysis also exposes widespread greenwashing by banks and fossil fuel companies which “backslid” on their commitments. The report finds that, to meet net- zero targets, they are overly reliant on carbon offset mechanisms which have been criticised by climate advocates as a distraction from reducing emissions. The authors state that banks’ short termism is exposing the financial system to extensive physical risks, volatile prices and the growing threat of stranded assets, emphasising the urgent need for regulation.

The paper also details case studies where bank financing has resulted in particularly harmful impacts, such as fossil fuel expansion, tar sands oil extraction, arctic oil and gas, and offshore oil and gas.

The report includes a section on resistance by Indigenous Peoples to fossil fuel developments and finishes with demands to enable financial, social and ecological stability:

  • an immediate prohibition for all finance for fossil fuel expansion;
  • adopting reduction targets for absolute financed emissions and robust transition plans for all existing fossil fuel clients;
  • using due diligence mechanisms that respect the sovereignty and human rights of Indigenous Peoples;
  • and a rapid scaling up of financing for a just transition to renewable energy sources.

Banking on Climate Chaos was authored by Rainforest Action Network, the Indigenous Environmental Network, BankTrack, Oil Change International, Reclaim Finance, Sierra Club, and Urgewald, and is endorsed by over 600 organisations in more than 75 countries.

This page was last updated April 24, 2023

Share this article