Financing for the fossil fuel sector from the world’s largest banks surged in 2024 to $869 billion, according to a recent report by the Rainforest Action Network (RAN) and other environmental groups.

That figure represents an increase of nearly 23% compared to 2023. The $162.5 billion increase channeled to companies doing business in fossil fuels stands in stark opposition to the drops in financing recorded since 2022. Experts say banks’ backing of the carbon-intensive industry threatens to stall progress on the transition to renewable energy and reveals the frailty of voluntary commitments to address climate change by banks.

Authors used S&P Global annual rankings for 2024 to identify the 65 largest banks in the world in producing the 16th annual installment of the “Banking on Climate Chaos” report. They then used finance data to connect the bonds, loans and stock issuances those financial institutions facilitated for more than 2,700 companies involved in some way in fossil fuels, ranging from extraction to storage.

The team examined “every financing decision point that a bank faces about whether or not it’s going to re-up money” for fossil fuels, Allison Fajans-Turner, policy lead with RAN and a co-author of the report, told Mongabay. “Unfortunately, we are seeing that banks are still incredibly willing to lend and underwrite and invest in the fossil fuel industry.”

The report also differentiates between project and corporate finance, finding that more than 94% of financing for fossil fuels goes to the more general corporate support rather than to specific projects, for which the banks’ own policies might be more restrictive.

“A key takeaway from this report is the loophole that allows this to happen — that publicly, banks will claim to restrict ‘project finance’ for a specific controversial pipeline to generate positive headlines, but then quietly provide massive ‘corporate finance’ loans and underwriting services to the very same company building that project,” Truzaar Dordi, an assistant professor of sustainability management at the University of York, U.K., who was not involved in the report, told Mongabay by email.

In the end, such practices are just “greenwashing,” he added.

Four of the top five financiers are based in the United States, led by JPMorgan Chase, which committed $53.5 billion to fossil fuel companies in 2024. Overall, nearly 70% of the 65 banks included in the report increased their financing of fossil fuel companies compared to 2023.

“What most stands out to me is the sheer scale of regression,” Dordi said. Banking support for fossil fuels “isn’t just a failure to decarbonize, but a full throttle acceleration into climate chaos,” he added.

Still, Fajans-Turner said this year’s findings weren’t a surprise.

“There were a lot of indicators that this might be coming,” she said. “Banks have been rolling back their voluntary commitments and their policies, which was showing that they did not have the institutional will to follow through on what they said.”

Following the election of Donald Trump, who promised during his campaign to ramp up oil and gas production, as president of the United States in November 2024, the country’s largest banks abandoned the Net-Zero Banking Alliance. The alliance is a voluntary, U.N.-backed initiative for banks to reduce their support of carbon emissions-intensive projects.

“The central message from this year’s report is that voluntary initiatives have failed,” Dordi said. “This signals a complete collapse in the sector’s commitment to climate action and affirms that these institutions will not lead the transition without being compelled to do so.”

Fajans-Turner and Dordi both point to the need for governments to move past the voluntary commitments that have fallen short. Fossil fuel financing must be regulated, they say.

“We need to go beyond disclosure and weak pledges toward binding rules,” Dordi said. “Specifically, as the report demands — we need an immediate and total exclusion of all lending and underwriting for any company with plans for expand its fossil fuel operations.”

Fajans-Turner said the report serves as “a wakeup call” for regulators and officials. She noted that the European Parliament is debating how to hold banks to account for climate-related risks in their portfolios.

The report makes it clear that “banks cannot police themselves,” Fajans-Turner said. But one of the “glimmers of hope” is that if regulators in Europe do follow through, global banks will have to comply, regardless of where they’re based.

“One region that does step up could actually set the trend for the entire sector,” Fajans-Turner said.

Continuing support for fossil fuel expansion and infrastructure from banks is also hampering the transition to cleaner sources of energy, she added.

“We are woefully underinvesting in renewable energy right now,” Fajans-Turner said.

In 2021, the intergovernmental International Energy Agency released a report stating that limiting the global temperature rise to 1.5° Celsius (2.7° Fahrenheit) above pre-industrial levels, a key goal of the 2015 Paris climate agreement, required stopping any further fossil fuel development.

“We very much understand that the energy transition is hard,” Fajans-Turner said. “It’s complicated and can’t happen overnight.”

But the dollars poured into fossil fuel projects and expansion threaten any chance to dampen the worst effects of climate change, Dordi said.

“Financing new fossil fuel infrastructure locks in emissions for decades, making a sustainable transition more difficult,” he added.

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An ‘unfair’ toll

Regulation and investment in renewables are critical for addressing climate change, and to protect those who lack the resources to cope with the broadening impacts of global temperature rise. Banks’ continued financing of fossil fuels might provide “a lot of short term profit, but it’s loading and socializing risks for the rest of us in the long run,” Fajans-Turner said.

Companies engaged in extracting, refining and transporting fossil fuels continue to seek financing for expansion, and big banks continue to back them, even as their activities exact a heavy toll on marginalized people, the authors write. And low-income, Indigenous and Global South communities are overmatched when it comes to the resources needed to fight back, Fajans-Turner said.

“It’s fundamentally unfair,” she added.

These communities must grapple with oil spills, like one that happened recently in the Peruvian Amazon. In October 2024, state-owned Petroperú’s North Peru pipeline began leaking into the Pastaza River, affecting at least 20 villages. But the company’s debt to banks forces it to continue producing, transporting and refining oil, the report’s authors point out.

In North America’s Elk Valley, a set of mines for metallurgical coal, which is used to make steel, that are now owned by Swiss-based mining company Glencore have leeched hazardous chemicals into waterways for decades. Evidence suggests the discharge could be harming cutthroat trout (Oncorhynchus clarkii lewisi), which connects the Ktunaxa Nation, comprising First Nations in southern Canada and Native Americans in the northern U.S., to land they’ve lived on for more than 10,000 years.

Still, despite long odds and limited resources, communities have fought back against the financial backing of energy-related extraction that has caused damage to their homes and livelihoods. In Peru, the Wampis and Achuar Indigenous nations continue to battle oil drilling in their territories in what for many has become “a lifelong fight.”

The Ktunaxa Nation has worked for more than a decade to track the impacts of mining on their homelands, finally convincing the Canadian and U.S. governments to commission an investigation in 2024 to address the mines’ pollution of local rivers.

This type of resistance sets an example for further action, Fajans-Turner said.

“It’s something that we can actually all learn from as well … in the absence of governments really stepping up to the plate,” she added. “It shows that we actually do have agency, and we can actually push and make a difference.”

Banner image: An oil pipeline through Wampis territory in the Amazonas department. Image by Jacob Balzani.

John Cannon is a staff features writer with Mongabay. Find him on Bluesky and LinkedIn.

Peruvian Indigenous groups thwart oil drilling in their territory — for now

Citation:

Sexton, E. K., Sergeant, C. J., Moore, J. W., Westwood, A. R., Chambers, D. M., McPhee, M. V., … Berchtold, A. (2020). Canada’s mines pose transboundary risks. Science, 368(6489), 376–377. doi:10.1126/science.abb8819

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