A new report published by campaign group ReCommon today finds that the biggest banks in G7 countries are responsible for more greenhouse gas emissions than the emissions of Germany, Italy, the UK and France combined. The greenhouse gas emissions associated with the systemically most important banks in the G7 amount to 2.7 billion tonnes, based on year-end disclosures from 2022 (1).

The report “Unsupervised – the carbon pollution of the world’s largest banks” criticises that to date neither governments nor relevant supervisors and regulators have taken enough action to limit the financing of fossil fuels and highly polluting industries. It calls on G7 finance ministers and regulators to use their influence to put in place international safeguards for a stable climate and financial system.

A key priority should be to cut financing of carbon-intensive sectors: Despite comprising only 6% of the lending the report analysed, these sectors account for more than half of the total financed emissions.

Daniela Finamore, finance and climate campaigner at ReCommon says: “If the world’s biggest banks were a country, they would rank among the top polluters. G7 finance ministers and financial watchdogs need to rein in the financial sector and end the financing of fossil fuels that are the driving force behind the climate crisis, rising energy bills and the ever-worsening extremes that force people around the world to leave their homes. Finance ministers and regulators need to steer finance towards funding that is in our public interest, so we can all live in a safer climate and stable economy.”

The authors of the report stress that their calculations of the emissions financed by the world’s biggest banks are likely a significant underestimate, which is due to a lack of transparency and poor disclosure practices. They specifically criticise that the majority of banks do not disclose absolute emissions but intensity metrics only, which make it impossible to assess a bank’s exposure to carbon-intensive industries.

The report can be downloaded here.

Notes:

(1) The calculated financed emissions are based on commercial credit exposure and residential mortgages according to year-end disclosures from 2022 by the 29 banks in G7 countries that the Financial Stability Board identified as globally systemically important banks. For a detailed methodology see: “Unsupervised – the carbon pollution of the world’s largest banks”, May 2024.

The carbon emissions of countries are taken from the EU Commission’s Emissions Database for Global Atmospheric Research:

Greenhouse gas total emissions by country:

Germany: 784.00 Mton CO2eq
France: 430.36 Mton CO2eq
UK: 426.56 Mton CO2eq
Italy: 394.75 Mton CO2eq

The total emissions from these four countries add up to 2.0 billion tonnes – compared to 2.7 billion tonnes of G7 banks’ financed emissions.

Re-posted from the original press release on the ReCommon website here.