‘Climate arsonists’: Financial actors invest billions into fossil fuels despite net zero pledges, says study

A recent analysis comparing industry pledges to climate action by the France-based group Reclaim Finance shows banks and financial institutions, a part of the Glasgow Financial Alliance for Net Zero (GFANZ) initiative, continue to invest billions in fossil fuels. The initiative launched by the former Bank of England governor, Mark Carney, in 2021 includes 450 organisations across 45 countries with assets of more than $130 trillion who signed up to align their investments with the goal of limiting global temperature rise by 1.5 degree Celsius above pre-industrial levels.

The report published, on Tuesday (January 17), by 13 NGOs, including Reclaim Finance claims that 56 of the largest member banks of the Net-Zero Banking Alliance (NZBA), a subgroup under GFANZ have provided $270 billion to 102 major fossil fuel developers through 134 loans and 215 underwriting arrangements. This includes several major banks across Europe, the United Kingdom as well as the United States.

"These 102 companies are currently planning to bring into production an extra 137 billion barrels of oil equivalent, equal to 60 per centof the new oil and gas the industry intends to bring on-line by 2030," stated the report.

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“GFANZ members are acting as climate arsonists. They’ve pledged to achieve net zero but are continuing to pour hundreds of billions of dollars into fossil fuel developers,” said Paddy McCully, senior analyst and the author of the report, as per the Guardian. He added, “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.”

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Meanwhile, 58 of the largest members of Net Zero Asset Managers (NZAM), another group under GFANZ hold at least $847 billion in stocks and bonds in 201 major fossil fuel companies, as of September last year, said the report. According to theFrance-based group,the fossil fuel companies in questiondevelop new coal-related power plants, mines and infrastructure or new oil and gas fields, pipelines and terminals.

The report accounts for 161 GFANZ members who have provided financial support to at least 230 of the world’s largest fossil fuel developers. Some of the major names from Wall Street include Citigroup and Bank of America (BofA) who have reportedly contributed at least $53 billion to oil, gas and coal firms either in underwriting or lending since they became a part of the NZBA in April 2021. In the UK, Legal & General Investment Management Limited (LGIM), which is the biggest company in the country to be a part of the initiative, held at least $13 billion worth of assets in fossil fuel developers, said the report.

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“The science is very clear: we must stop the development of new coal, oil and gas projects as soon as possible if we are to meet our climate objectives and avoid a doomsday scenario. . Yet it is business as usual for the majority of banks and investors who continue to support booming fossil fuel companies without restriction, despite their high-profile commitments to carbon neutrality,” said Lucie Pinson founder of Reclaim Finance, in a statement. She also went on to accuse banks and investors of “greenwashing” and called it “damaging” as it casts a doubt on all net zero commitments as well as undermines efforts of people who really act for the climate.

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