A new report released today shows how shockingly low major banks’ funding of the green energy transition really is. And not surprisingly, RBC is one of the worst performers globally, despite their rhetoric about spending hundreds of millions on green or “transition finance”, RBC’s total spending on renewables is 1%.
You read that right, 1%.
The share of bank finance going to renewable energy rather than fossil fuels has little changed in six years, raising questions about how fast lenders are pushing energy clients to become greener, according to research published Tuesday.
Since 2016 renewable energy has taken 7% of a total $2.5 trillion in bank loans and bond underwriting for energy activities, according to a report commissioned by environmental groups including Sierra Club and Fair Finance International.
JPMorgan, Citi and Barclays’ renewable energy share was 2% between 2016 and 2022 and The Royal Bank of Canada’s 1%, the report said.
How low can you go?
Let’s start with what we already know. Banks like Citi, RBC and Barclays are pumping billions of dollars into fossil fuel companies, helping to accelerate the climate crisis. But what about funding for renewables?
Stunningly, of all the money banks lend to energy companies, only 7% (on average) is green. And the averages hide the worst of it. US mega bank Citi pumped $181 billion into energy companies between 2016-2022. And only 2% went to renewables. Same for Barclays, Europe’s biggest fossil fuel funder. Canadian bank RBC have a dismal 1%!
Remember, these are the same banks constantly telling you how green they are. And when we’re not looking, they’re ploughing cash into fossil fuels.
See the full data briefing HERE
Things are also shockingly disappointing for banks which are members of GFANZ – a bunch of financial institutions that pledged to do their bit to tackle climate change. The data shows these banks actually provide less financing for renewable energy, on average, than the banks that are not in GFANZ. It’s a double own goal for GFANZ because their own data says that in order to reach a safe, low carbon world, green energy investments need to account for at least 80% of energy investments compared to fossil fuels by 2030.
Just to reiterate: they need to be at 80%, and they’re currently at 7%. More than 10 times higher!
Why banks, why?
Interestingly, Profundo which compiled the data (for Sierra Club, Fair Finance International, BankTrack and Rainforest Action Network) contacted all the banks, and didn’t get much of a response.
But the Citi CEO Jane Fraser happened to be in Davos for the World Economic Forum this week and when asked whether Citi had ever refused to fund new fossil fuel projects, she responded: “We need to have energy security and we need to be operating on cleaner technologies and the two, as we are seeing right now, cannot be mutually exclusive.”
In other words, no.
This proves that Citi and other banks are prioritising fossil fuels over clean energy. Despite pretending to help us transition off fossil fuels.
So what are banks waiting for? And how much more damaged will our earth have to become for them to properly back renewables and end links to the dying fossil fuels industry?