A growing number of banks claim to be backing climate solutions. Yet, despite public pledges, the world’s biggest financial institutions are still pouring billions into fossil fuels, and, in 2024, they ramped up those investments.

In 2021, the International Energy Agency (IEA) warned that avoiding dangerous global heating required an immediate stop to the development of new oil and gas fields and coal-fired power stations. The agency shared that annual global energy investment needed to reach $5 trillion to speed up the clean energy transition.

That same year, hundreds of banks joined the Glasgow Financial Alliance for Net Zero (GFANZ) at COP26, promising to align their portfolios with the 1.5°C climate target. But watchdog groups say the reality is far from these promises. “GFANZ and its member alliances will only be credible once they up their game and insist that their members help bring a rapid end to the era of coal, oil, and fossil gas expansion,” said Paddy McCully of Reclaim Finance.

Fossil fuel financing surges

The 16th annual Banking on Climate Chaos report, released last month, found that the world’s 65 largest banks poured $869 billion into fossil fuel companies in 2024, up $162.5 billion from the previous year. This rise reverses two years of decline.

U.S. banks dominated the rankings. JPMorgan Chase, Bank of America, and Citi were the top three global financiers of fossil fuel expansion, each increasing funding by more than $10 billion. Barclays was the top European contributor. In total, U.S. banks accounted for nearly one-third of all fossil fuel financing tracked.

“It’s a pretty significant year for the report given the reverse in trajectory,” said Caleb Schwartz of the Rainforest Action Network (RAN). “Banks are putting money into fossil fuels, they’re putting money into fossil fuel expansionism.”

Net-zero claims vs. reality

The findings highlight a long-standing criticism: Many banks’ climate pledges leave loopholes. While some have stopped direct project-level financing for fossil fuels, they still offer general corporate financing to major polluters. According to RAN Policy Lead Allison Fajans-Turner, banks often fail to check whether their clients’ transition plans are credible.

Jessye Waxman of the Sierra Club called the reversal “unacceptable, deeply irresponsible, and a clear capitulation to political pressure,” adding that banks must commit to reducing emissions through the companies they finance, not just through rhetoric.

Progress, but too little, too slow

Some signs of change exist. In 2022, global investment in the energy transition hit $1.1 trillion for the first time. The World Bank has backed renewable projects in Africa, and Goldman Sachs has launched a $1.6 billion clean tech fund. U.K. lenders HSBC and Lloyds pledged to end financing for new oil and gas fields, while campaigns like Make My Money Matter, backed by Richard Curtis, Emma Thompson, and Stephen Fry, are putting public pressure on banks.

Consumer tools like Bank.Green now help people choose lenders that reject fossil fuel investments, such as Spring Bank, Atmos Financial, and Triodos.

Meanwhile, alliances like the Net-Zero Asset Owner Alliance are working to tighten climate commitments by requiring greater disclosure and banning carbon offsets in place of real emissions cuts.

The road ahead

Climate advocates argue that time is running out. David Tong of Oil Change International said the world needs oil and gas production to decline by 3–4% annually to meet climate targets, yet no major producer has agreed to end expansion.

As banks distance themselves from climate coalitions and boost fossil fuel financing, the gap between words and action is widening. For now, the numbers, not the pledges, are telling the real story.

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Source: THE GOOD MEN PROJECT