For the second year in a row, global banks made more money underwriting bonds and providing loans for green projects than they earned from financing oil, gas and coal activities.
The world’s biggest lenders generated a total of about $3 billion in fees last year from lining up debt for deals marketed as environmentally friendly, according to data compiled by Bloomberg. By comparison, the sector brought in less than $2.7 billion in aggregate earnings from fossil-fuel transactions.
European banks led the transition, with BNP Paribas topping Bloomberg’s green debt league table. Meanwhile, Wall Street dominated fossil finance, with Wells Fargo and JPMorgan Chase generating the biggest earnings from oil and gas deals.
BNP, the European Union’s largest bank, got close to $130 million last year from its green finance business. Credit Agricole was next with $96 million and then HSBC Holdings with $94 million.
On the other side of the energy divide, Wells Fargo earned fees of $107 million from arranging bonds and loans for the fossil fuel sector, followed closely by JPMorgan and Mitsubishi UFJ Financial Group, both with $106 million. MUFG was also last year’s top arranger of global green loans.
The development coincides with stricter regulations in Europe, where both the European Central Bank and the region’s top banking authority have made clear they want the finance industry to speed up its green transition.
Lenders in Europe now face the threat of fines and higher capital requirements if they mismanage climate exposures. In response, many banks are imposing explicit restrictions on fossil finance.
In the US, meanwhile, the regulatory outlook remains uncertain and fragmented as many Republican states place hurdles in the way of the green transition.
Banks suspected of withholding financing from the oil and gas sector increasingly face retaliation, with Texas among states threatening to cut off Wall Street firms that embrace net-zero emissions goals.
Against that backdrop, the global finance industry has fallen well short of where it needs to be if the goals of the Paris Agreement are to be met.
According to an analysis by BloombergNEF, four times as much capital needs to be allocated to green projects as to fossil fuels by 2030 to align with net zero emissions targets.
Yet at the end of 2022, that ratio was just 0.7 to 1, largely unchanged from the previous year, BNEF’s latest figures show.
Bank financing isn’t “anywhere close” to the transition levels needed, said Trina White, sustainable-finance analyst at BNEF, when the December report was published.
The perceived foot-dragging by global banks has environmentalists sounding the alarm.
“Banks still aren’t keeping pace with the rate of transition that’s required to avoid catastrophic climate change,” said Jason Schwartz, senior communications strategist at Sunrise Project, a non-profit focused on the financial sector’s contribution to global warming.
The shifting trends of the past year are “more indicative of broader macroeconomic trends than any proactive efforts in the banking sector to reduce financing for carbon-intensive energy”, said Adele Shraiman, senior campaign strategist at Sierra Club.
“The reality is that banks aren’t transitioning their energy financing quickly enough to meet their own climate goals.”
Last year was the hottest on record, according to the Global Carbon Project. The group, which represents an international collaboration of scientists, estimates that carbon dioxide emissions from burning fossil fuels rose 1.1 per cent to a new high in 2023, putting the planet on track to exceed its carbon budget for 1.5°C of warming by the end of the decade.
Overall, banks extended $583 billion in green bonds and loans last year, compared with $527 billion of fossil fuel debt. In 2022, banks channelled $594 billion into environmental projects, and $558 billion into oil, gas and coal, the Bloomberg data show.
For several years now, the world’s biggest banks have published reports showing the vast sums of money they say they’re allocating toward a greener, fairer planet.
But some of those assertions are now being questioned, amid an absence of regulatory guideposts to help stakeholders make sense of such claims.
Bio
Born in Dubai in 1994
Her father is a retired Emirati police officer and her mother is originally from Kuwait
She Graduated from the American University of Sharjah in 2015 and is currently working on her Masters in Communication from the University of Sharjah.
Her favourite film is Pacific Rim, directed by Guillermo del Toro
How Filipinos in the UAE invest
A recent survey of 10,000 Filipino expatriates in the UAE found that 82 per cent have plans to invest, primarily in property. This is significantly higher than the 2014 poll showing only two out of 10 Filipinos planned to invest.
Fifty-five percent said they plan to invest in property, according to the poll conducted by the New Perspective Media Group, organiser of the Philippine Property and Investment Exhibition. Acquiring a franchised business or starting up a small business was preferred by 25 per cent and 15 per cent said they will invest in mutual funds. The rest said they are keen to invest in insurance (3 per cent) and gold (2 per cent).
Of the 5,500 respondents who preferred property as their primary investment, 54 per cent said they plan to make the purchase within the next year. Manila was the top location, preferred by 53 per cent.
The Limehouse Golem
Director: Juan Carlos Medina
Cast: Olivia Cooke, Bill Nighy, Douglas Booth
Three stars
Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
UAE currency: the story behind the money in your pockets
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
Is it worth it? We put cheesecake frap to the test.
The verdict from the nutritionists is damning. But does a cheesecake frappuccino taste good enough to merit the indulgence?
My advice is to only go there if you have unusually sweet tooth. I like my puddings, but this was a bit much even for me. The first hit is a winner, but it's downhill, slowly, from there. Each sip is a little less satisfying than the last, and maybe it was just all that sugar, but it isn't long before the rush is replaced by a creeping remorse. And half of the thing is still left.
The caramel version is far superior to the blueberry, too. If someone put a full caramel cheesecake through a liquidiser and scooped out the contents, it would probably taste something like this. Blueberry, on the other hand, has more of an artificial taste. It's like someone has tried to invent this drink in a lab, and while early results were promising, they're still in the testing phase. It isn't terrible, but something isn't quite right either.
So if you want an experience, go for a small, and opt for the caramel. But if you want a cheesecake, it's probably more satisfying, and not quite as unhealthy, to just order the real thing.
The specs: McLaren 600LT
Price, base: Dh914,000
Engine: 3.8-litre twin-turbo V8
Transmission: Seven-speed automatic
Power: 600hp @ 7,500rpm
Torque: 620Nm @ 5,500rpm
Fuel economy 12.2.L / 100km
