FILE PHOTO: Petro-Canada’s Edmonton refinery and distribution center glows at dusk in Edmonton
The world’s largest banks cut lending to fossil fuel companies by 9% in 2020 due to the pandemic, although funding has increased further in the past five years, a report revealed on Wednesday.
The 60 largest banks lent more than $ 750 billion to 2,300 fossil fuel companies in 2020, up from $ 824 billion in 2019, according to a report by Rainforest Action Network, Reclaim Finance, Oil Change International and other non-profit organizations. government (NGOs).
But the report says the drop, driven by record levels of industry investment in the second half of 2020, as the pandemic hammered fuel demand, followed annual increases of 4.4 percent to 5.5. % since 2016, the year following the signing of the Paris climate agreement.
It also follows an increase in demand from fossil fuel companies who raised cheap finance in the first half of 2020, according to the report after assessing the role of banks in lending and underwriting debt and capital issues. clean.
“Despite this significant drop from 2019 to 2020, the general trend of the past five years is definitely in the wrong direction,” the report says.
“We must move forward towards a world where, even without a pandemic, fossil fuel production declines almost as rapidly every year over the next decade – as it did in 2020 – but this time in a managed manner. .
The pace of bank lending to companies emitting high greenhouse gas emissions is increasingly in the limelight as investors demand more details on their plans to manage climate-related risks and opportunities in their markets. financing portfolios.
This month, HSBC became the latest lender to bow to the pressure when it agreed to phase out support for the coal industry and commit to short- and medium-term goals to align with the Paris Agreement.
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