The world's largest investment and financial conglomerates that have joined the Net-Zero Banking (NZBA) alliance do not work on reducing their carbon footprint and continue to regularly finance projects and companies in the hydrocarbon industry (coal, gas and oil).
Moreover, in most large banks, the share of financing of "dirty" companies still exceeds the share of "green" companies, although financial companies have committed themselves to doing the opposite.
Source. Bloomberg.
The NZBA was founded in April 2021 with the support of the United Nations, which called on the largest financial groups to increase funding and investment in green projects to help speed up the transition to clean energy sources to halt the rise in the average global temperature.
The members of the association have committed themselves to making efforts to ensure that investments in clean projects exceed investments in dirty projects by a factor of 4: that is, $1 of oil and gas or coal money would be matched by $4 of green technologies or renewable energy sources.
They pledged to reach this level of investment by 2030. For comparison, at the end of 2021, there were only $0.92 of "clean investments" per $1 of "dirty investments".
However, most of the banks in the association do not yet have even a 1-to-1 ratio in terms of financing "dirty" and "clean" projects. For example, the largest American bank JPMorgan Chase & Co. has a ratio of about 0.7 to 1.
Citigroup and Bank of America – 0.8 and 1.1 to 1, respectively. The worst in the list were the American Wells Fargo & Co. and the Canadian Royal Bank of Canada – 0.4 to 1 each.
The best result was achieved by the French BNP Paribas – 1.7 to 1. At the same time, none of the 10 largest members of the association improved their performance over the past year, the agency notes.
"We can still limit global warming to 1.5°C, but banks will fail us if they don't revise their lending practices," says Lucy Pinson, founder and director of the environmental nonprofit Reclaim Finance.
In 2021, banks' total investments in energy were estimated at $1.2 trillion, of which $585 billion was directed to low-carbon energy and $636 billion to fossil fuels.