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The fossil fuel industry continues to attract billions of dollars in funding. Here is a lignite power plant in Germany.

Uwe Aranas/Dreamstime.com

Major banks and asset managers continued to invest hundreds of billions of dollars in fossil fuel industries despite their commitment to eliminate carbon emissions by 2050, according to a new report from the Paris-based non-governmental organization Reclaim. Finance.

The Reclaim Finance report doesn’t identify how much of the funding is being used for new fossil fuel projects and how much for existing ones, or even renewable energy projects that are increasingly being adopted by energy giants. This highlights the challenge of tracking how well financial institutions are sticking to their net zero claims.

“We have no way of tracking the end use of any of the funds,” Paddy McCully, a senior analyst at Reclaim Finance and lead author of the report, wrote in an email to Barron’s.

Many scientific studies and political bodies have agreed that the world needs to cut its carbon emissions in half by 2030 and reach net zero by 2050 to keep global warming below the key threshold of 1.5°C. Since existing and planned fossil fuel projects would already deplete the remaining carbon budget, any new development would lock in even more future emissions and put the target out of reach.

The Glasgow Financial Alliance for Net Zero was founded in April 2021 and now has over 550 members committed to net zero goals. This includes some of the world’s largest banks, asset managers and insurers. But it is difficult to hold these financial institutions accountable for such claims.

The vast majority of GFANZ members have no “significant” restrictions on financing fossil fuels, according to Reclaim Finance. Of the 161 financial institutions evaluated, 61 have some kind of policy that limits their support to companies that continue to develop new fossil fuel supply projects. Of these, nine have policies to end involvement with such companies entirely.

Meanwhile, funding from fossil fuel companies continues to pour in. Between the date of joining GFANZ and August 2022, the top 56 banks in the alliance provided at least $269 billion to oil, gas and coal companies whose operations continue to grow, according to Recover Finance. Topping the list are



Bank of America

which provided $31 billion and $23 billion, respectively.

“Our climate strategy prioritizes the role we will play in helping to transition responsibly to a net-zero economy, while also supporting continued access to energy and increased financing for low-carbon energy solutions,” Citigroup said in a statement. Bank of America declined to comment.


BNP Paribas


Mitsubishi UFJ


General Society

they are all founding members of the Net-Zero Banking Alliance, a subgroup of GFANZ for banks. Within a month of NZBA’s launch, they all participated in a $10 billion syndicated loan to Saudi Aramco, the world’s largest oil and gas company, according to the report.

Oil and gas companies that received the most funding from GFANZ members include Saudi Aramco of Saudi Arabia, QatarEnergy of Qatar, PJSC Gazprom of Russia and Brazil.

Brazilian Oil

The coal power developers who received the most funding from GFANZ members are mostly from China and India.

“It is clear that much work remains to be done to ensure that the world is deploying capital consistently with a 1.5°C trajectory,” says a GFANZ spokesperson. According to research commissioned by GFANZ last year, to keep climate change in check, investment in renewables needs to be four times that of fossil fuels by 2030.

Investors also continue to hold large amounts of assets in the fossil fuel industry. As of September 2022, GFANZ’s 58 largest asset managers held at least $847 billion in stocks and bonds in fossil expanders.

black rock

and Vanguard topped the list with fossil fuel investments of $191 billion and $184 billion, respectively.

BlackRock and Vanguard, two of the world’s largest asset managers, primarily manage passive funds that track market indices, meaning they don’t make active decisions about what’s in the portfolios. That’s one of the reasons they still have large amounts of fossil fuel assets.

Indeed, as energy prices have skyrocketed over the past year, investors are struggling to juggle their climate commitments with short-term financial gains. Last October, GFANZ stopped requiring members to stay in line with the United Nations’ strict decarbonization targets after some members threatened to resign. Still, Vanguard withdrew from the coalition in December, noting that GFANZ’s full climate commitment has led to confusion among its investors about Vanguard’s independence and priorities.

BlackRock CEO Larry Fink has said in the past that divesting from the fossil fuel industry would simply shift control of those carbon-intensive assets from public to private hands, which doesn’t help the cause. Investors should work with energy companies to speed up their net-zero transition, according to Fink.

Email Evie Liu at [email protected]