In the decade from 2013 to 2023, global oil and gas consumption increased by about 14%.1 Rising consumption of oil and gas is antithetical to limiting global warming to between 1.5° to 2.5°C above pre-industrial levels in order to avert the worst impacts of climate change.2 Rising consumption begins with financing “upstream” activities, namely the exploration, extraction, and production of crude oil and natural gas. Much of that funding comes from the world’s largest banks.
JP Morgan Chase was the largest financer of upstream oil and gas activity from 2016 to 2023, supplying more than USD 67 billion to a diverse range of companies. Recipients included state-owned companies, such as the Saudi Arabian Oil Company (Saudi Aramco) and Petroleo Brasileiro SA (Petrobras), and private companies such as ExxonMobil, BP, and Shell.
A coalition led by the Rainforest Action Network collected and analyzed the finance data, and pointed to some troubling trends beneath the data.3 First, some of the financing issued in 2023 matures after 2030, a key interim target date for reducing emissions, and after 2050, the widely adopted target date for global CO2 emissions to reach net zero. This raises questions about some bank’s commitment to reaching net zero promptly.
Second, some oil and gas companies have retreated from earlier, stronger commitments to curtail investment in upstream projects. For example, in 2023 Bank of America softened its earlier commitment to not invest directly in new exploration and development in the Arctic.4
Third, many banks continue to prioritize net zero targets instead of policies that explicitly reduce and eventually eliminate new investment that expands the capacity to produce fossil fuels. Net zero targets leave “policy gaps” by allowing companies to purchase carbon offsets instead of directly cutting emissions. Offsets often promise more emissions reductions than they generate and thus promote greenwashing.5
1 Energy Institute Statistical Review of World Energy 2024, https://www.energyinst.org/statistical-review/home
2 United Nations Framework Convention on Climate Change, The Paris Agreement, https://unfccc.int/process-and-meetings/the-paris-agreement
3 Rainforest Action Network, BankTrack, the Center for Energy, Ecology, and Development, Indigenous Environmental Network, Oil Change International, Reclaim Finance, Sierra Club, and Urgewald, “Banking on climate chaos: fossil fuel finance report 2024,” May 13, 2024, https://tinyurl.com/2s4c653v
4 Bank of America Corporation Environmental and Social Risk Policy (ESRP) Framework, December 2023, https://tinyurl.com/45vyx6sb
5 Heidi Blake, “The great cash for carbon hustle,” New Yorker, October 16, 2023, Link
