After years of financing fossil fuels at a much higher level than renewables, the world’s largest banks are finally set to provide an equal amount of funding to green energy in 2021.
Reporting by Bloomberg earlier today revealed that “in recent years, banks spend three times more on fossil fuel projects, than total bonds and loans backing green projects, but that may have changed in 2021.”
Even after the Paris agreement was signed at the end of 2015, banks continued to pour trillions of dollars into the fossil fuel industry, a total that amounted to three times the amount they invested in renewables.
By looking at the amount banks declared in fees received from energy sector related loans and bonds, they took $16.6bn, compared to $7.4bn from green debt. The Bloomberg League Tables set out in their news story show the amount major world banks invested in traditional energy generation initiatives vs green energy.
Total fees from 2015 until 2021
| Bank | Fossil fuel investment | Green investment |
| JP Morgan | $900.4m | $243.8m |
| Citigroup | $789.6m | $199.2m |
| Bank of America Securities | $641.7m | $193.1m |
| Wells Fargo | $564.4m | $36.7m |
| HSBC | $480.7m | $257.3m |
| Barclays | $478.9m | $153.5m |
| Mitsubishi UFJ Financial Group | $464m | $197.4m |
| RBC Capital Markets | $454.5m | $72m |
| Deutsche Bank | $360.2m | $143.5m |
| Sumitomo Mitsui Financial | $358.8m | $161m |
Green Investment by bank’s country of origin since December 2015
| Country | Green Investment |
| USA | $672.8m |
| United Kingdom | $410.8m |
| Japan | $358.4m |
| Germany | $143.5m |
| Canada | $72m |
| $1,657,500,000bn |
If the world is to have any hope of limiting climate change to an average global temperature increase of 2°C as set out in the Paris Agreement, analysts at S&P Global cite estimate that about $3 trillion in annual investments would be required.
We’re about half-way there, but that’s after five whole years! We need to be making twice the investment made over that period of time every year, but at least things seem to be going in the right direction.
Bloomberg took a look at the biggest banking organisations in the world, with data on the top 30 banks included in its report, but there are organisations out there who place green investment at the front and centre of what they do.
One example is the Green Investment Group, who are part of the Macquarie Group and aim to create green infrastructure across the globe as the home to one of the world’s largest teams of specialist green investors and developers.
On a personal banking level, Gatehouse Bank offer ethical savings products that they say invest wisely and deliver the profits back to you. Which have more information on their accounts and how they may or may not benefit you.
Hopefully 2021 is the tipping point where we see investment in renewable energy finally outstrip fossil fuel and continue growth over the coming years.