Banks with net zero targets are ‘actively lobbying against’ climate policies

The world’s biggest financial institutions are undermining their net zero targets with continued support for the fossil fuel industry, a new report has claimed. 

A study of the world’s 30 largest financial institutions by think tank Influence Map has revealed they provided a collective $740bn for fossil fuel production in 2020/21, while half are members of industry groups which have lobbied directly against climate policy.

While 97 per cent of the institutions (29) have set net zero targets, none have fossil fuel financing policies in line with net zero pathways outlined by the International Energy Agency (IEA) or the Intergovernmental Panel on Climate Change (IPCC), the report found.

Activist investor Sir Christopher Hohn said any bank making a net zero promise while “actively lobbying against necessary climate regulation” was guilty of “greenwashing”.

The study compared the net zero pledges of the institutions with their financial activity and other interests. Barclays, HSBC and Santander were all included in the analysis. 

While the report noted a significant increase in public support for climate action among finance institutions, it found a “disconnect” between words and action, with a collective $740 billion in fossil fuel financing enabled by the institutions over the past two years.

J.P. Morgan was found to be the biggest enabler of fossil fuel financing, contributing $81bn in 2020/21. The bank also increased its coal financing from $1.28bn in 2020 to $3.08bn in 2021.

Influence Map found significant conflicts of interest between financial institutions’ net zero pledges and membership of industry groups lobbying against climate policy. 

All 30 institutions remain members of associations which have “consistently lobbied to weaken key sustainable finance policies”, while 15 are members of real-economy industry associations which are “key blockers of action on climate change”, lobbying directly in line with fossil fuel interests. 

This includes the US Chamber of Commerce and the American Gas Association.

Net zero pledges were found to be lacking in some institutions, with only 11 setting concrete decarbonisation targets across sectors for 2030 in line with the Glasgow Financial Alliance for Net Zero (GFANZ) pact signed at COP26.

The pact is based on evidence from the IPCC and IEA which have both said that lowering emissions by 2030 will be essential to keep global warming within manageable limits.

Influence Map senior analyst and report author Eden Coates said: “These global financial institutions have significant economic and political influence, and they are delaying action that is essential to respond to the climate crisis. 

“There is a stark disconnect between what they say about climate change and what they’re actually doing – particularly when it comes to pushing back on policymakers’ attempts to align financial regulation with climate goals.

“If they are serious about achieving their net zero targets, they should set concrete and actionable short-term targets across all aspects of their operations.”