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Bank finance for cleaner energy grows, but still lags fossil fuels – report
Published by Jessica Weisman-Pitts
Posted on February 28, 2023
2 min readLast updated: February 2, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on February 28, 2023
2 min readLast updated: February 2, 2026
LONDON (Reuters) -Banks gave 81 cents in financing support to low carbon energy supply for every dollar they provided to fossil fuels in 2021, a report showed on Tuesday, but they will need to ramp up their commitments much further for the world to hit its climate goals.
LONDON (Reuters) -Banks gave 81 cents in financing support to low carbon energy supply for every dollar they provided to fossil fuels in 2021, a report showed on Tuesday, but they will need to ramp up their commitments much further for the world to hit its climate goals.
Several climate scenarios suggest that to limit global temperature rises to 1.5 degrees Celsius above the pre-industrial average, the world needs to be investing $4 in renewable energy for every $1 invested in fossil fuels by 2030.
Energy analysts BloombergNEF compiled data from 1,142 banks for what it calls an “Energy Supply Banking Ratio” to assess whether banks are aligning their financing to the real economy and the 1.5 degrees target.
In 2021, bank financing for energy supply totalled $1.9 trillion, just over $1 trillion of which went to fossil fuels and $842 billion to low carbon energy projects and companies, according to the report.
The bank financing ratio, of 81 cents to $1, was below the global energy supply investment ratio of 90 cents to $1.
The latter ratio has been climbing in recent years from around 0.45:1 between 2011 and 2015.
“While a bounce in fossil-fuel investment is expected to counter the disruption caused by Russia’s invasion of Ukraine, the underlying economics of low-carbon energy supply mean its growth will be sustained,” said BloombergNEF CEO Jon Moore, noting 2022’s 15% rise in low carbon energy supply investment.
Individual banks’ financing ratios varied. The Royal Bank of Canada had a 0.4 ratio and JP Morgan 0.7, against BNP Paribas’ 1.7 and Deutsche Bank’s 2.2, according to BloombergNEF, which said differences reflect geographic focus, client bases and strategies.
A spokesperson for JP Morgan said the bank provides financing across the energy sector and has a target to extend $1 trillion for green initiatives by 2030. RBC did not respond to requests for comment.
The report’s findings differ from another study published by environmental groups last month which said the share of bank financing going to renewables had stagnated.
BloombergNEF said its research covered financing from far more banks than other studies.
(Reporting by Tommy Reggiori WilkesEditing by Mark Potter)
Low carbon energy refers to energy sources that produce minimal greenhouse gas emissions compared to fossil fuels, such as wind, solar, and hydroelectric power.
The Energy Supply Banking Ratio measures the amount of financing banks provide to low carbon energy projects compared to fossil fuel investments.
Climate goals are targets set to reduce greenhouse gas emissions and mitigate climate change impacts, often aligned with international agreements like the Paris Agreement.
Fossil fuel financing refers to the funding provided by banks and financial institutions for projects that extract, refine, and distribute fossil fuels like oil and gas.
Renewable energy investment involves funding projects that generate energy from renewable sources, aiming to reduce reliance on fossil fuels and promote sustainability.
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