European banks continue to invest heavily in fossil fuel extraction

Brussels – The world’s biggest banks are betting on the failure to combat climate change. This is what emerges from data released today (27 October) by the investigative journalism platform Follow the Money. In recent years, major financial institutions have invested more than $1.6 trillion in fossil fuel industry giants, which are responsible for thousands of new polluting projects. 

Between 2021 and 2024, according to a mapping by CarbonBombs.org, more than 2,300 new oil, gas, and coal projects were developed worldwide. That is, after the International Energy Agency (IEA) warned in 2021 that limiting global warming to 1.5 °C would require zero funding for fossil fuel exploitation. 

The ten largest banks involved in financing these projects are based in Canada, China, Japan, and the United States. But also British Barclays, French Crédit Agricole, and German Deutsche Bank. Also in the top ten banks in the European Union, in ninth and tenth place, are Intesa Sanpaolo—which is reported to have invested $9.31 billion in fossil fuels since 2011—and Unicredit, with $9.17 billion. Among the main beneficiaries are giants of the sector: Eni, which has received $33.1 billion in funding from banks; TotalEnergies ($21.8 billion); and the China National Offshore Oil Corporation ($7.3 billion).

According to Follow the Money‘s reconstruction, these three companies were responsible for 364 new projects from 2021 to 2024, or about 16 per cent of the overall total over the three-year period. Then there would be a lesser-known company, Swiss-based Mercuria Energy Group Holding Ltd, which has received over $23.5 billion since 2021. 

Carbonbombs.org, which brings together the efforts of four environmental NGOs, analysed the impact of these projects—and thus, indirectly, of the financial institutions’ funding—on the planet’s so-called carbon balance, i.e. the amount of carbon dioxide that can still be tolerated if there is to be a realistic chance of complying with the Paris Climate Accords. In essence, the 2,300 new projects would collectively exceed the remaining carbon budget by 11 times. This is all the more alarming given that the Potsdam Institute for Climate Impact Research’s Carbon Clock now indicates that the budget will be exhausted in less than four years. 

More than a commitment to hinder the fight against climate change, it is the mere law of capital. The French Crédit Agricole, contacted by Follow the Money, replied that the companies it finances are “diversified and may have important decarbonisation projects,” such as renewable energy or hydrogen. They invest where there are profits, without looking at the climate impact in the face. However, another report, published a few weeks ago by Reclaim Finance, highlighted the gap between bank financing for fossil fuels and renewable energies: between 2021 and 2024, the 65 largest banks in the world would allocate more than twice as much money to the former as to the latter. A gap that widens across the Atlantic and narrows slightly when looking at European banks, which are still far from the $6-to-$1 ratio in favour of renewables indicated by the IEA.

 The issue is likely to come up at COP30, scheduled for 11–21 November in Belém, Brazil. In view of the summit, which will have to find urgent solutions in the face of the now inevitable failure of the climate target set ten years ago in Paris, the Council of the European Union today released some data: in 2024, in the 27 member states, €11 billion of private funding has been mobilised through public interventions for reducing emissions and adapting to the effects of climate change in developing countries. A share that also includes the banks, which build with one hand and destroy with the other.