Global financing of fossil fuel companies has increased for the first time since 2021 with banks that have left net-zero groups among the biggest funders, according to a new report.
The latest Banking on Climate Chaos report, analysing the world’s largest banks, shows fossil fuel financing climbed to US$869bn in 2024, an increase of $162bn on the previous year.
Banks that have exited the Net Zero Banking Alliance (NZBA) – including JP Morgan Chase, Bank of America and Mizuho Financial – were some of the biggest backers of fossil fuels.
“The retreat by US banks from robust climate commitments is unacceptable, deeply irresponsible, and a clear capitulation to political pressure,” said Jessye Waxman, campaign advisor at the Sierra Club and report co-author. “Banks must shift away from risky financing and commit to reducing emissions via the companies they finance, with a genuine focus on helping to decarbonise the economy and support the urgent and necessary clean energy transition.”
The annual report, published by groups including Rainforest Action Network, Sierra Club and Indigenous Environment Network, shows how 65 major banks have collectively funneled $7.9tn into fossil fuels since 2016.
Over $1.6tn has been provided for expanding fossil fuel operations since 2021, despite warnings from the International Energy Agency which says there must be no new oil or gas fields to stay within the 1.5ºC target of the Paris Agreement.
“Banks expect returns on those investments over the multi-year life of the financing contracts,” the report notes. “In order to provide those returns, fossil fuel companies must keep producing, thus locking us into decades of more dependence on dirty energy”.
US banks were the biggest financiers, providing $289bn (33%) of total annual financing. JPMorgan Chase topped the list of laggard banks, increasing financing by $15bn, followed by Bank of America ($12.7bn) and Citigroup ($14.9bn).
In Europe, Barclays ($13bn), Santander ($3.3bn), and Deutsche Bank ($1.1bn) ramped up lending, despite well-established regional and national climate risk frameworks.
However, some banks made cuts to their financing. Santander made the largest single reduction in expansion finance ($2.2bn), while the ING Group came out front of the pack in terms of overall divestment, successfully slashing its annual fossil financing by $3.2bn compared to 2023.
The increase in fossil fuel financing, coupled with the departure of many banks from the NZBA, exposes the fragility of voluntary approaches favoured by central banks, according to the authors. Indeed, only one ex-NZBA member, Sumitomo Mitsui Banking Corporation, cut both fossil fuel and expansion financing last year.
The authors also noted that 70% of expansion financing came from banks with exclusion policies. Loopholes around corporate-level financing are often built into these policies, which tend to focus on project-level finance, enabling systemic risk accumulation. Corporate-level financing represented 94.7% of all fossil fuel deals, according to the report.
However, France’s La Banque Postale maintained the strongest fossil fuel exclusion policy, and was the only bank on the list that did not provide any financing for fossil fuel expansion in 2024.
The report underscores that climate stress tests and voluntary frameworks are not enough to shift lending behavior. “Policymakers must back Paris Agreement commitments with regulatory teeth,” it says, calling instead for mandatory rules requiring banks to reduce fossil fuel financing to avert financial system collapse.
This page was last updated July 2, 2025
