Banks have continued to invest in fossil fuels in spite of pledges to reach net zero.
With the UK having experienced the hottest day on record, many people are feeling worried about climate change – and searching for ways they can help end reliance on fossil fuels. When it comes to making changes in our own lives, some of the most popular options are reducing reliance on fossil fuels through eating less meat or driving and flying less.
While these are all helpful steps to take, one of the most significant things an individual can do is to control how their money is spent by banks and pension funds. You might be surprised to know that simply having a bank account could mean you’re funding the climate crisis.
In spite of many banks having net zero pledges, research by ShareAction shows that some of the largest world banks are still pumping billions into fossil fuel projects. This means that banks could be using your money to loan or invest in oil and gas projects around the world, contributing to climate change without you even knowing about it.
How much do banks invest in fossil fuels?
Between them, 35 of the world’s biggest banks have provided $2.7 trillion (£2tn) to fossil fuel companies since the Paris Agreement was officially signed at the end of 2015.
According to campaigners Urgewald and Reclaim Finance, the UK’s five biggest banks – HSBC, Barclays, Lloyds, Natwest and Standard Chartered – invested almost £40.4bn into the coal industry between 2018 and 2020.
More recent research from ShareAction shows that investments into fossil fuel projects have continued in spite of pledges from many banks to achieve net zero emissions in the near future.
What are banks doing to phase out damaging investments?
Too little, according to the campaigners. While finance sectors in other countries are taking steps to remove cash from emission-heavy industries – such as in France, where 19 of the biggest banks have developed bold anti-coal policies – none of the UK’s financial institutions have created similar frameworks.
Most UK banks and investors have already joined a net-zero initiative requiring a commitment to the UK’s climate efforts, but research from ShareAction shows that many banks are continuing to fund fossil fuel projects regardless.
