In a troubling revelation for climate advocates, a recent report has unveiled that the world’s leading banks collectively allocated a staggering $906 billion to the fossil fuel sector in 2025. This marks a significant increase of nearly 8% compared to the previous year and locks in further reliance on coal, oil, and gas at a time when the planet faces unprecedented climate challenges. The findings, detailed in the annual Banking on Climate Chaos report, indicate that major financial institutions are continuing to make decisions that contradict global efforts to combat climate change.
A Surge in Fossil Fuel Financing
The report highlights JPMorgan Chase as the foremost financier of fossil fuels, contributing $58 billion to the sector in 2025, a 13% rise from the previous year. Following closely behind, Bank of America committed the second-largest amount, while Japanese banks MUFG and Mizuho Financial, along with Citigroup, rounded out the top five funders. Notably, Barclays emerged as the highest-ranking British bank on the list, coming in at eighth.
Caleb Schwartz, a policy analyst at the Rainforest Action Network—one of the organisations responsible for the report—expressed dismay at the findings: “Last year, we were hoping to see a continuous decrease in historical numbers, but we actually saw that increase, and it continues this year. It’s a troubling trend.”
Contradicting Climate Commitments
The findings are particularly alarming as they come on the heels of the Paris Agreement, where nations pledged to limit global temperature rise to 1.5 degrees Celsius above pre-industrial levels. Achieving this goal necessitates a drastic reduction in fossil fuel emissions, yet since the agreement was enacted, the world’s largest banks have funneled an astonishing $8.7 trillion into the fossil fuel industry. Meanwhile, scientists warn that the 1.5-degree limit is set to be breached imminently, with a series of record high temperatures expected to be surpassed in the coming years.
The report also noted that the concentration of fossil fuel financing has increased among a select group of institutions, with what environmental groups have dubbed the ‘dirty dozen’ responsible for a staggering 40% of all funding in the industry. The majority of this financing originates from six key jurisdictions: the US, Canada, Japan, China, the UK, and the European Union.
A Shift in Priorities
Despite a growing awareness of climate issues, many banks have begun to backtrack on their previous commitments to reduce fossil fuel lending. Political pressures, particularly in the United States, have led to a retreat from initiatives aimed at curbing emissions. This shift was underscored by the disbandment of the Net-Zero Banking Alliance, a UN-backed initiative created to align bank lending with net-zero emissions goals by 2050.
Niko Lusiani, a climate and energy expert who edited this year’s report, remarked on the state of the industry: “The fossil fuel incumbents are not going out with a whimper. They are doubling down to expand an increasingly fragile, unreliable, risky energy system.” This stark reality underscores the urgent need for regulatory measures to ensure that financial institutions adhere to environmental commitments.
In response to inquiries about their fossil fuel financing, representatives from JPMorgan Chase and Bank of America reiterated their support for a diverse range of energy solutions. They emphasised their roles in providing capital to both traditional and renewable energy sectors, as well as their commitments to advancing clean energy technologies.
Why it Matters
The continued investment in fossil fuels by major banks not only undermines global climate initiatives but also jeopardises the future of the planet. As the impacts of climate change become increasingly pronounced—manifesting in extreme weather events and rising sea levels—the financial sector’s role in perpetuating fossil fuel dependency poses a significant threat to both environmental and societal stability. The findings call for urgent action from regulators and policymakers to hold these institutions accountable and pivot towards sustainable financing practices, as the window for meaningful climate action rapidly narrows.
