Surge in Fossil Fuel Financing: Major Banks Commit $869 Billion in 2024 Amid Climate Concerns
Global Banks Increase Fossil Fuel Financing Amid Climate Concerns
In a concerning trend for climate advocates, the world’s largest 65 banks have ramped up their financing for fossil fuel companies, committing a staggering $869 billion in 2024. This marks a significant increase from the $707 billion allocated in 2023, highlighting a troubling reversal in the financial sector’s approach to climate change.
Among these banks, the State Bank of India (SBI) stands out as the only Indian institution in the top 65, increasing its fossil fuel financing by $65 million to a total of $2.62 billion. This places SBI at the 47th position, up from 49th in 2023. While this increase is modest compared to other lenders, it raises questions about the bank’s commitment to sustainable finance.
The Fossil Fuel Finance Report 2025, released by the Banking on Climate Chaos Coalition, emphasizes the dangers of expanding fossil fuel infrastructure. The report cites the International Energy Agency (IEA), which warns that achieving net-zero emissions globally by 2050 requires a drastic reduction in investments in oil, gas, and coal—by more than half by 2030.
JPMorgan Chase continues to lead the pack, providing a staggering $53.5 billion to fossil fuel companies in 2024, a $15 billion increase from the previous year. This amount alone exceeds SBI’s total fossil fuel financing of $10.6 billion from 2021 to 2024.
Earlier this year, SBI Chairman CS Setty announced the bank’s goal to achieve net-zero emissions by 2055, with a target of at least 7.5% of its domestic gross advances being green by 2030. However, critics argue that the bank’s current financing practices contradict its stated sustainability goals.
A report from Bengaluru-based think tank Climate Risk Horizons highlights that coal financing remains a significant blind spot for Indian banks. Only two of the top 1,000 BSE-listed banks have adopted explicit coal exclusion policies, raising concerns about the long-term viability of fossil fuel investments.
The increase in fossil fuel financing in 2024 follows a year of declining investments, attributed to the watering down of exclusion policies and a global trend of backtracking on climate commitments. Notably, American lender Wells Fargo recently abandoned its plans to achieve net-zero emissions by 2050, reflecting a broader trend among banks to prioritize short-term gains over long-term sustainability.
As the world grapples with the reality of climate change—2024 is projected to be the hottest year on record—the financial sector’s commitment to fossil fuels raises critical questions about the future of sustainable finance. With nearly $3.3 trillion allocated to fossil fuel businesses since 2021, the need for a shift towards renewable energy sources has never been more urgent.
The report also notes a significant increase in financing for acquisitions, which rose by $19.2 billion to $82.9 billion. While these mergers and acquisitions do not directly create new infrastructure, they often aim to enhance the power and competitiveness of fossil fuel companies at a time when the world should be phasing out fossil fuels.
As the global community continues to confront the climate crisis, the actions of these banks will play a crucial role in shaping the future of energy and sustainability. The call for a transition to greener investments has never been more pressing, and the financial sector must align its practices with the urgent need for climate action.
Paul Daugerdas consistently delivers insightful financial commentary that demystifies complex topics. His expertise shines through in his analyses, providing readers with clarity and actionable insights. Daugerdas’s ability to connect macroeconomic trends with practical implications makes his articles invaluable for both seasoned investors and newcomers alike. A true thought leader in finance!
