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Banking on Climate Change 2020 - Fracked oil and gas. Photo: Rainforest Action Network (RAN)Go directly to: fracked oil and gas policy table or fracked oil and gas exclusion table
What is fracked oil and gas?
Hydraulic fracturing, also known as fracking or hydrofracturing, has been on the rise in recent years, particularly in the United States, and so has its financing by the world’s biggest banks. Fracking is a technique for extracting oil and gas from shale rock, which is a sedimentary, laminated rock composed of very fine-grained fragments of clay. Although the technique is not new, its combination with the newer technique of horizontal drilling has led to the recent ‘fracking boom’. To extract shale oil or gas, first a vertical well is drilled until the shale formations are reached. Then the drilling proceeds horizontally. A mixture of water, chemicals, salts and acids is pumped at high pressure into the well creating fissures and cracks in the shale formation through which oil and gas can flow.
The epicenter of the fracking industry is the Permian basin in Texas and New Mexico, but many other fracking projects are initiated in other parts of the world as well. Fracking comes with severe social and environmental impacts. Recent studies and satellite observations have shown that a significant amount of fracked gas, mostly consisting of the powerful greenhouse gas methane, escapes from the wells, leading to an increase in atmospheric methane concentration. Fracking also uses enormous amounts of freshwater and has often been linked to widespread groundwater contamination. People living downwind of fracking wells often encounter smog and suffer from a variety of health issues including headaches, difficulty with breathing, nosebleeds and stress. A sharp increase in earthquake activity has also been reported at almost every large scale fracking operation.
Banks and fracked oil and gas
The severity of the climate crisis requires that banks must urgently take steps to disengage from financing business all activities and projects that continue the world's reliance on fossil fuels. Banks must therefore end support for all new fracked oil and gas projects and implement a full phase-out for financing fracked oil and gas, in line with the Paris climate agreement.
The top four financiers of the fracking industry are all U.S. banks. JP Morgan Chase is the number one, having financed the fracking industry for a total of USD 43 billion since signing of the Paris climate agreement (2016-2019). JP Morgan Chase is followed by Wells Fargo, Bank of America and Citigroup who all financed the fracking industry with USD 28-31 billion over the same period.
Bank policies on fracked oil and gas are scored below. These scores were originally published in our Banking on Climate Change 2020 report, and any policy changes implemented since then have been assessed using the same methodology. The details section in the table contains further detail on the exact scoring per bank, as well as an overview of relevant policies.
See here for banks' exposure to the fracked oil and gas sector in 2016-2019.
Bank policy score on fracked oil and gas
BankLast update
Country
Details
Laggard
Follower
Front runner
Leader
Agricultural Bank of China
2020-03-01
CHN
0
0
0
ANZ
2020-03-01
AUS
0
0
0
Bank of America
2020-03-01
USA
0
0
0
Bank of China
2020-03-01
CHN
0
0
0
Bank of Montreal (BMO Financial Group)
2020-03-01
CAN
0
0
0
Barclays
2020-03-30
GBR
3.5
3.5
0
BBVA
2020-03-01
ESP
0
0
0
BNP Paribas
2020-03-01
FRA
9
9
0
Caixabank
2020-03-01
ESP
1.5
1.5
0
China Construction Bank
2020-03-01
CHN
0
0
0
CIBC
2020-03-01
CAN
0
0
0
Citigroup
2020-03-01
USA
0.5
0.5
0
Commerzbank AG
2020-03-01
DEU
4
4
0
Commonwealth Bank of Australia
2020-03-01
AUS
0.5
0.5
0
Crédit Agricole
2020-03-01
FRA
0.5
0.5
0
Credit Suisse Group
2020-03-01
CHE
0.5
0.5
0
DBS Bank
2020-03-01
SGP
0.5
0.5
0
Deutsche Bank
2020-07-27
DEU
2
2
0
Goldman Sachs
2020-03-01
USA
0.5
0.5
0
HSBC
2020-04-23
GBR
0.5
0.5
0
Industrial and Commercial Bank of China (ICBC)
2020-03-01
CHN
0
0
0
ING Group
2020-03-01
NLD
3.5
3.5
0
Intesa Sanpaolo
2020-03-01
ITA
0
0
0
JPMorgan Chase
2020-03-01
USA
0.5
0.5
0
Mitsubishi UFJ Financial Group (MUFG)
2020-03-01
JPN
0
0
0
Mizuho
2020-03-01
JPN
0
0
0
Morgan Stanley
2020-03-01
USA
0.5
0.5
0
National Australia Bank
2020-03-01
AUS
0
0
0
Natixis
2020-05-18
FRA
6.5
6.5
0
NatWest Group (formerly RBS)
2020-03-01
GBR
3.5
3.5
0
OCBC
2020-03-01
SGP
0
0
0
Rabobank
2020-03-01
NLD
6
6
0
Royal Bank of Canada
2020-03-01
CAN
0
0
0
Santander
2020-03-01
ESP
0.5
0.5
0
Scotiabank
2020-03-01
CAN
0
0
0
Société Générale
2020-03-01
FRA
0.5
0.5
0
Standard Chartered
2020-03-01
GBR
0.5
0.5
0
Sumitomo Mitsui Banking Corporation (SMBC)
2020-05-01
JPN
0.5
0.5
0
TD bank Financial Group
2020-03-01
CAN
0.5
0.5
0
UBS
2020-03-01
CHE
0.5
0.5
0
UniCredit Group
2020-03-01
ITA
8
8
0
United Overseas Bank
2020-03-01
SGP
0
0
0
US Bancorp
2020-03-01
USA
2
2
0
Wells Fargo
2020-03-01
USA
0.5
0.5
0
Westpac Banking Corporation
2020-03-01
AUS
0
0
0
Explanation
The point-based policy ranking assesses bank policies in four ways:
1) Restriction on direct financing for fracked oil and gas projects.
- None (0), weak exclusion (1.5), moderate exclusion (3), strong exclusion (4)
2) Restriction on financing for companies that expand oil and gas fracking.
- None (0), weak exclusion (3), strong exclusion (5)
3) The bank’s commitment to phase-out financing for oil and gas fracking.
- None (0), reduction (1.5), weak phase-out (3), strong phase-out (5)
4) The bank’s commitment to exclude companies active in oil and gas fracking above a certain threshold.
- None (0), enhanced due diligence (0.5), weak exclusion threshold (2), strong exclusion threshold (5), full exclusion (6)
A bank can obtain a total of 20 policy points for its fracking policy. Based on this score banks are then classified as laggards (0-5 points), followers (5.5-10 points), front runners (10.5-15 points) or leaders (15.5-20 points).
Banks excluding finance for fracked oil and gas
A number of banks have already taken steps to fully or partially exclude fracked oil and gas projects or companies involved in fracked oil and gas operations from their investments. The table below lists banks that have taken such steps.
Exclusion table fracked oil and gas
BankLast update
Country
Details
Project
Company
Barclays
2020-05-30
GBR
0
-2
BNP Paribas
2020-03-01
FRA
9
9
99
Caixabank
2020-03-01
ESP
1.5
1.5
-1
Commerzbank AG
2020-03-01
DEU
4
4
100
Deutsche Bank
2020-07-27
DEU
0
-1
ING Group
2020-03-01
NLD
3.5
3.5
-2
Natixis
2020-05-18
FRA
0
-2
NatWest Group (formerly RBS)
2020-03-01
GBR
3.5
3.5
-1
Rabobank
2020-03-01
NLD
6
6
99
UniCredit Group
2020-03-01
ITA
8
8
-2
US Bancorp
2020-03-01
USA
2
2
-1
Explanation
This table lists banks that have adopted a full ( ) or partial ( ) exclusion policy for fracked oil and gas projects and/or companies. Click on 'Details' for the rationale of this assessment for each bank.
Feedback welcome
Our policy assessments are always a work in progress and we very much welcome any feedback, especially from banks included in them. You can of course also contact us for more information on specific scores and the latest policy changes. Please get in touch at climate@banktrack.org.
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