Banks Outpace Governments in Funding Polluting Industries, Neglecting Climate Mitigation

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Excessive Funding for Polluting Industries

A recent report sheds light on a concerning trend where top banks globally are pouring massive financial resources into some of the world’s most polluting industries, far surpassing the support provided by governments for climate change mitigation efforts. The report underscores that financial institutions such as HSBC, Citigroup, and JP Morgan Chase have collectively injected nearly €3 trillion into expanding fossil fuel operations in the Global South since the adoption of the Paris Agreement on Climate Change seven years ago. Furthermore, an additional €340 billion has been directed toward industrial agriculture, a major contributor to climate change, according to an analysis by the NGO ActionAid.

Banks Overshadow Government Support

This excessive funding for polluting industries by banks stands in stark contrast to the support provided by governments for climate solutions. Notably, it surpasses the funding by Global North governments provided to developing nations for climate crisis mitigation efforts by a staggering 20-fold. Arthur Larok, Secretary General at ActionAid International, aptly summarizes this disparity, emphasizing the urgent need to redirect financial resources appropriately.

Leading Banks in Funding Polluting Industries

The report, titled ‘How the Finance Flows: The banks fuelling the climate crisis,’ identifies the top banks from various regions that have been financing fossil fuels and industrial agriculture in the Global South. The Industrial and Commercial Bank of China emerged as the largest financier of fossil fuels from 2016 to 2022. Among European banks, HSBC topped the list, although it announced in December of the previous year that it would cease funding for new oil and gas fields. Other European banks implicated in the report include BNP Paribas, Societe Generale, and Barclays. In the Americas, Citibank, JPMorgan Chase, and Bank of America were among the leading contributors, while in Asia, China CITIC Bank, Bank of China, and Mitsubishi UFJ Financial featured prominently as funders of fossil fuels and industrial agriculture.

The Urgent Need for Change

Teresa Anderson, the global lead on climate justice at ActionAid International and the report’s author, stresses that while global banks often claim to address climate change, their continued massive financing of fossil fuels and industrial agriculture is deeply concerning. The report calls for governments to step in by regulating the financing of fossil fuel expansion, chemical usage, and deforestation. Additionally, it urges governments to support sustainable solutions such as renewable energy and eco-friendly agricultural practices like agroecology. Banks are also called upon to adopt more sustainable practices and cease financing activities that contribute to environmental harm.

Environmental Consequences and Urgent Action

By continuing to fund fossil fuels and industrial agriculture in the Global South, banks risk perpetuating a cycle of landlessness, deforestation, water pollution, and climate change that adversely affects communities and the planet. The report emphasizes the need for banks to acknowledge the harm they are causing and urgently cease financing activities that contribute to the destruction wrought by fossil fuels and industrial agriculture.

SOURCE: Ref Image from The Independent

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