Royal Bank of Canada becomes top financier for fossil fuel industry

Canada’s Royal Bank will emerge as the fossil fuel industry’s largest investor in 2022, as Canadian banks increasingly assume the role of ‘lender of last resort’ for controversial carbon-intensive projects. Knocked out JP Morgan from the top spot.

RBC has funded $42.1 billion in fossil fuel companies and projects in 2022, according to the Annual Report on Fossil Fuel Financing by a Coalition of Campaign Groups organized by Rainforest Action Network. This includes his $4.8 billion to Tar Sands. Another Canadian bank, Scotiabank, also appeared in the list of top ten financiers.

Researchers said Canadian banks are becoming a backstop for financing fossil fuels and could fill the slack in lending to projects and companies that European lenders shy away from. Canadian banks have provided $862 billion to fossil fuel companies since the signing of the Paris Agreement, a study reveals.

“It’s obscene,” said Richard Brooks, director of climate finance at Stand.earth, an environmental group involved in the study. [RBC] Currently the world’s dirtiest banker when it comes to fossil fuels. “

“RBC has gone completely the wrong way, pushing back our climate ambitions and positioning Canadian banks as fossil fuel lenders of last resort,” he added.

RBC and Scotiabank did not respond to requests for comment.

The report comes at a time when the role banks play in fueling global warming through financing carbon-intensive companies and projects faces intense scrutiny. 43 banks, including RBC and JP Morgan, are members of the Net Zero Banking Alliance, whose members have committed to addressing climate change, and 49 banks have committed to net zero emissions.

According to the study, fossil fuel lending from the world’s 60 largest banks will reach $673 billion in 2022, down 16% from the previous year. The figure was the lowest between 2016 and 2022, but this was “due to unusual geopolitical and economic conditions, not changes in bank policies,” the report said. .

Oil and gas companies may not have invested in new production as aggressively as they did a decade ago, but in the wake of Russia’s war against Ukraine last year and the ensuing energy crisis, many oil and gas companies have recorded Some oil majors reported record profits. ExxonMobil, Shell and others are not seeking bank loans in 2022.

The study found that 30 companies looking to expand their liquefied natural gas operations will grow to nearly 2% in 2022 compared to 2021, as countries such as Germany have increased their use of LNG instead of gas from Russia. I understand that you asked for double funding.

Maaike Beenes, BankTrack’s banking and climate campaign leader, called the bank’s decision to step up financing of LNG over the past year irresponsible.

“These gas projects will not be able to meet Europe’s short-term energy needs or reduce household costs. Instead, they will be dependent on fossil fuels for decades,” she said. Told.

US banks continue to dominate fossil fuel lending, accounting for more than a quarter of all lending from 2016 to 2022. JP Morgan made $39.2 billion in loans last year, making him the second largest lender to fossil fuels, after leading the list for six years.

JP Morgan said it provided loans to “the entire energy sector,” including “energy security assistance” to help clients transition to cleaner business models.

Other US banks on the list included Wells Fargo, Bank of America and Citigroup. City and Wells Fargo declined to comment, but BofA did not respond to a request for comment. Several Japanese banks also made the top ten.

Last year, 60 banks poured $150 billion into the top 100 companies investing more in fossil fuels, according to the report.

Some banks had policies in place to finance fossil fuels, but these often did not cover equity or bond underwriting and were targeted at specific project loans, but not in general corporate loans. It turned out that it was not applied to