Banks Drop the Climate Pretense and Follow the Money

By Julianne Geiger - Jun 21, 2025, 6:00 PM CDT
https://oilprice.com/Energy/Energy-General/Banks-Drop-the-Climate-Pretense-and-Follow-the-Money.html

• Banks pumped $869B into fossil fuels in 2024.
• Fossil fuels remain financially attractive, offering stable returns compared to the cost, policy, and supply chain hurdles facing clean tech investments.
• U.S. giants like JPMorgan, Bank of America, and Citigroup are leading the charge, signaling a strategic shift from ESG promises to profitability.

Forget betrayal. Forget backsliding. What global banks are doing right now isn’t a reversal of climate commitments—it’s a long-overdue reality check. In 2024, they dumped nearly $900 billion into fossil fuel financing, according to the latest “Banking on Climate Chaos” report. And while advocacy groups are clutching their pearls, investors are quietly nodding.

Banks funding fossil fuels haven’t lost their way—they’ve just stopped pretending.

JPMorgan Chase, Bank of America, Citigroup, and Barclays topped the charts, each tacking on over $10 billion in new fossil-fuel financing. JPM alone dropped $53.5 billion into oil, gas, and coal. That’s not exactly chump change—and it’s certainly not the behavior of an institution planning to kick the hydrocarbon habit anytime soon.

Critics say this undermines climate targets. The reality? These banks were never designed to hit climate targets. Their mandate is to maximize returns. And with interest rates stabilizing, oil prices firming, and energy demand still rising globally, fossil fuel investments—messy, profitable, scalable—are back in vogue.

Yes, some of these banks made splashy commitments during the ESG boom. They joined net-zero alliances. They funded glossy sustainability reports. But those were branding exercises, not binding strategies. The minute those commitments became a regulatory liability—or a political punchline—they started dissolving. Exhibit A: the exodus from the UN-sponsored Net-Zero Banking Alliance, timed nicely with President Trump’s return to office.

“This reversal exemplifies the limits of voluntary commitments by financial firms whose primary goal is short-term profit,” the report complains. That’s the closest the report comes to admitting the obvious: voluntary green finance was always a shaky foundation for decarbonization.

In fact, the Banking on Climate Chaos report makes that plain: banks committed $869 billion to fossil fuel companies in 2024 alone—up $162 billion from the year before. Nearly half of that financing came from U.S.-based banks, with JPMorgan Chase leading at $53.5 billion, followed by Bank of America ($46 billion) and Citigroup ($44.7 billion). Barclays was the top fossil fuel financier in Europe at $35.4 billion. Meanwhile, over $347 billion went to the top 100 companies actively expanding their fossil fuel operations.

For a supposedly dying industry, fossil fuels are drawing a staggering amount of capital.

It’s not lost on anyone that some of the same banks being scolded for fossil fuel financing are still pouring money into renewables and climate tech. But here’s the thing: they’re not missionaries—they’re market players. And right now, oil and gas projects are delivering stable returns, while clean tech continues to wrestle with cost overruns, supply chain headaches, and policy volatility.

Banks are not public policy arms. They’re capital allocators. And right now, capital is flowing toward fossil fuels for one simple reason: the energy transition isn’t happening fast enough to make renewables the better bet.

There’s also the regulatory vacuum to consider. As long as no one is forcing banks to price in climate risk with real teeth, voluntary initiatives will keep folding under pressure. A report can scold them all it wants—until there’s a law on the books or a tax on the balance sheet, banks will do what they’ve always done: follow the money.

What’s more, climate advocacy itself has lost coherence. The same groups that demand banks stop lending to fossil fuels often oppose mining permits for the metals and minerals needed for clean tech. That contradiction hasn’t gone unnoticed in boardrooms. Banks, to their credit, have at least picked a lane: they’ll fund what actually gets built.

And for now, what’s getting built—at scale, at speed, and at profit—is still largely oil and gas. As long as energy security, inflation, and political volatility remain unresolved, fossil fuels will continue to look like the safer bet. Not morally. But financially.

So yes, banks are still backing fossil fuels. And yes, they’re still issuing climate reports. But no, they’re not confused. They’re just honest—at least in their balance sheets. The climate movement may not like it, but until the economics change or the regulations bite, this isn’t a scandal. It’s a strategy. And for now, it seems to be working.

By Julianne Geiger for Oilprice.com